The Competition Authority's second settlement agreement brings to a close an investigation into a lead surcharge case involving manufacturers and distributors of industrial batteries.
On 23 February 2016, the Belgian Competition Authority imposed fines amounting to €3.8m on several producers and distributors of industrial batteries. The six undertakings involved (Battery Supplies, Celectric, Emrol, Enersys, Exide and Hoppecke) were sanctioned for applying an agreed surcharge for lead to the prices of motive power batteries from 2004 until 2014 in Belgium.
The infringements relate to the market for the delivery and maintenance of industrial batteries and more in particular "motive power batteries". Motive power batteries are leaded batteries that serve as an energy source for rolling stock, and are primarily used in forklifts, locomotives and floor cleaning devices. Lead is one of the most important components and cost factors in motive power batteries and is consequently a key cost factor. At the end of 2003 and the beginning of 2004, the lead price increased significantly in a very short time span. In response to this sudden price increase, the undertakings involved met in a series of multilateral meetings and eventually agreed to introduce a common lead surcharge. The surcharge was the amount to be added to the net price of a motive power battery in order to adjust the price to the evolution of the lead price. The practices lasted from 2004 to 2014.
The Belgian Competition Authority decided that the behaviour of the parties constituted a complex infringement existing of different elements that could be qualified as an agreement and/or concerted practice by means of which the parties knowingly replaced the risks of competition with practical cooperation. The Authority also treated the practices as a single and continuous infringement, and established that they were contrary to Article IV.1 of the Belgian Competition Act and to Article 101 TFEU.
The existence of the cartel was detected after a leniency application by Exide, following which the Belgian Competition Authority initiated investigations and inspections in 2014 at the premises of the five other parties involved. Exide benefited from full immunity for acting as the whistle blower. Hoppecke, Battery Supplies and Enersys also applied for leniency and were granted a reduction. The decision also mentions that an executive of Enersys filed and obtained immunity as an individual. Executives from Hoppecke also obtained personal immunity.
All the parties to the cartel decided to settle and consequently acknowledged their involvement in the infringements and accepted the sanction imposed on them. This decision is the second settlement procedure before the Belgian Competition Authority, following the decision of 22 June 2015 where retailers and manufacturers of drugstore, perfumery and hygiene products were fined an amount of €174m for coordinating prices between 2002 and 2007. Under Belgian law, settlement decisions cannot be appealed.
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