Speech: Introductory remarks on Bearings cartel
European Commission - SPEECH/14/233 19/03/2014
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Vice President of the European Commission responsible for Competition policy
Introductory remarks on Bearings cartel
Brussels, 19 March 2014
Today the Commission has imposed fines totalling more than 953 million euros to companies that operated a cartel in the supply of bearings for cars and trucks. The producers coordinated their pricing strategies for over seven years, from 2004 to 2011, in the whole European Economic Area (EEA). The six companies involved are JTEKT, NSK, NFC and NTN – all of Japan – as well as Schaeffler of Germany and SKF of Sweden.
Bearings are used to reduce friction between the moving parts of a vehicle, such as wheels, transmission or chassis. They are bought by car and truck makers or car parts manufacturers. This is not a component of minor importance: a single car contains on average about 100 to 150 bearings. The European market for these products is worth at least 2 billion euros a year
The six participants to the cartel agreed on a common pricing strategy vis-à-vis their customers – namely, car or truck makers and automotive component manufacturers.
When the prices of steel increased, they agreed to pass on this increase to their customers. When this happened there was a common understanding among the cartelists not to undercut each others' prices, so as to keep existing supply shares stable.
Furthermore, they discussed with each other the replies to requests for quotations and for annual reductions to car and truck makers.
The multilateral meetings in which the cartelists coordinated the pass-on of steel price increases, were also called "steel" or "club" meetings. The multilateral meetings were complemented by bilateral and trilateral contacts.
This was a blatant breach of EU rules that strictly prohibit cartels. Potentially all automotive companies buying bearings and having production sites in Europe were targeted.
The fine imposed in today’s decision is significant as it reflects the economic importance of the cartelised sector as well as the scope and the duration of the infringement.
All parties have agreed to settle the cartel with the Commission. They acknowledged their wrongdoing and received in return a reduction of their fines by 10%. This is the 12th cartel settlement decision since this procedure was introduced in 2008. This decision confirms once more the success and efficiency of this procedure.
Five out of six parties cooperated with the investigation under our leniency programme. JTEKT received full immunity from fines because it was the first to reveal the existence of the cartel to the Commission. Four other parties received fine reductions ranging between 20% and 40% for their cooperation with the Commission.
Again, leniency has proved to be an indispensable tool in the fight against cartels.
Today's decision is part of a much wider investigative effort aiming to uncover and – if their existence is confirmed – sanction any cartels in the automotive sector.
This ongoing probe is in fact one of the largest cartel investigations ever conducted in a particular sector. Overall, more than 100 products and more than 70 companies are or have been investigated by the Commission.
Last July we imposed fines for several cartels in so-called "wire harnesses", which are the electric cables used in cars. In January we found and sanctioned a cartel in the flexible foam which is used in car seats, among other applications.
Today’s decision is a further milestone in this fight.
But we will not stop here. We are still investigating suspected cartels for airbags, safety belts, steering wheels, air conditioning and engine cooling products, as well as lighting systems – to mention a few examples.
It is incredible to see that, if one adds up one by one all the components which might be cartelised, this could almost make a whole car!
If they were left unchallenged, such cartels could impair the competitiveness of our entire automotive industry by artificially increasing input costs.
So here as in other areas, enforcing EU competition rules means preserving or reinforcing the competitiveness of our industry. In fact, competition policy is an important component of any policy towards greater competitiveness.
Moreover, if car parts are cartelised, this could mean that the final consumers – that is to say citizens who buy cars – could end up paying more than they should.
This is why I attach great importance to this investigative work, which is one of our priorities in antitrust enforcement.