Nexans to appeal cable cartel fine

FRANCE: Nexans is to appeal against the European Commission's (EC) decision to issue the company with a fine for its alleged involvement in a price-fixing cartel.

Nexans has been fined for alleged involvement in a price-fixing cartel
Nexans has been fined for alleged involvement in a price-fixing cartel

The offshore cable specialist was ordered to pay EUR 70.7 million for activities that the EC says involved collaborating with competitors to push up the price of offshore wind cable networks.

Nexans declined to comment on the reasoning behind the appeal, but at the time of EC's ruling, the company's chairman, Frederic Vincent, said: "The commission regrettably did not take into account the lack of effect on customers, which is not required in order to apply sanctions.

"The group is fully committed to compliance with competition laws and operates a strong dedicated competition compliance programme across its subsidiaries worldwide, which we reinforced in 2009 to ensure that our business activities are conducted in compliance with the highest ethical and legal standards."

The EC alleges that Nexans was part of a cartel that would share markets and allocate customers in order to undermine competition and push prices up.

The firms are said to have struck agreements such as that European and Asian producers would stay out of each other's home territories. European companies apparently also agreed to allocate projects within the European Economic Area.

The EC said that a Nexans employee tried to delete several thousand documents related to the activities , but the investigators were able to retrieve them with forensic IT technology.

Since payment must be made within three months even if an appeal is filed, the company said that its net debt will be impacted in 2014.

Nexans also said that it is being investigated by regulators in the US, Canada, Brazil, Australia and South Korea for similar activities, and that this may also affect the company's results. In 2011 the company was fined by South Korea's Fair Trade Commission for apparent involvement in a cable cartel in the country.

All together, ten firms, including J-Power Systems and Prysmian, were ordered by the EC to pay a total of EUR 302 million in fines for the illegal activities between 1999 and 2009. While ABB took part in the practices, it has been granted full immunity from a suggested EUR 33 million fine as it was the first company to reveal the practices to the commission.

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