From temporary price increases and exchanged sensitive information

From 2004 until 2007 Samsung SDI, Sony, Panasonic and Sanyo producers for rechargeable batteries which are used in electronic devices such as laptops and phones colluded in a cartel where they agreed on temporary price increases and exchanged sensitive information in order to avoid the market competition.

This incident mainly took part in Asia and partly in Europe. The temporary price increases where a result of the higher price for the raw material Cobalt, which is used to produce the lithium-ion batteries. After Samsung SDI revealed the existence of the cartel to the European commission all companies admitted their collusion and the case was therefore settled with total fines of 166 million euros. This is not the only successful settled cartel case from the commission.

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(European Commission, 2016)In September 2017 the european commission settled a long on going cartel of the company Scania and five other truck manufacturers which matched their prices and the introduction of new technologies. Scania received with a total of 880 million euros the highest fine for its collusion (European Commission 2017). A more recent settlement occurred in the spring of 2018 when eight producers of capacitors coordinated their supply of aluminium and tantalum between the years 1998 and 2012 (European Commission, 2018).The European Commission approach consists of regulating the domestic market through liberalisation and opening the market up to competition.

What the Commission aims for is that services which are controlled by public authorities are transferred to private companies in order to enable a more competitive market. Such a market would result in companies which constantly look for reducing their production costs to stay competitive. Therefore the consumer could benefit from fairer prices, better quality or a wider range of alternative goods. (European Commission, 2012)The level of punishment of colluding in a cartel depends on three main criteria´s. Firstly, the entry fee that every company has to pay which is part of a cartel.

This fee will be imposed on every cartel case and other antitrust violations. It usually consists of 15 to 25 percent of the annual sales of a company independent from the time period and the committed crime in the cartel. This amount will be added to the final calculations.Secondly, the European commission imposes a fine which is representative of the committed crime.

This penalty is based on the revenue of the company and can be up to 30 percent. On top of that it gets multiplied by the number of years the company colluded in the cartel.Thirdly, there is the penalty for companies which repeatedly took part in a cartel, called the repeat offense penalty. This penalty can be topped up until 100 percent of the current amount. Additionally, an increase can be entitled by every single prior participation.

Besides this, the European commission will not only take their own previous verdicts into account they will evaluate the ones from national competition authorities too. The total fine yields out of the sum from the three single calculations. (European Commission, 2006)The leniency program consists of the strategy that companies voluntarily self-report them and provide the necessary evidence to the commission to condemn them and the other members as guilty. As a result, the company which reveals the cartel can receive total immunity.

Every other firm which sufficiently colludes with the commission can get a reduction in their fine from 20 to 50 percent depending on the order in which the company´s admit their fraud. This concept is not only a help by solving cartels more quickly, it also has an impact on the existing cartels because it destabilizes them and makes them distrustful. (European Commission, 2016)In the rechargeable battery producers case from 2004 to 2007 Samsung SDI revealed the cartel to the commission and fully cooperated with them to convict the others. Consequently, they received total immunity. Afterwards Sony voluntarily provided further information´s which resulted in a reduction of 50 percent on their total fines. Panasonic and Sanyo both agreed on settling the case by confessing their collusion. Hence, they received a reduction of 20 percent on their fines.

(European Commission, 2016)


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