Belgian Competition Authority Adopts Second Settlement Decision in Industrial Battery Cartel Case

On 23 February 2016, the College of Competition Prosecutors (Auditoraat / Auditorat – the “Competition College”) of the Belgian Competition Authority (Belgische Mededingingsautoriteit / Autorité belge de la Concurrence) adopted its second settlement decision involving six battery manufacturers (Battery Supplies, Celectric, Emrol, Enersys, Exide Technologies and Hoppecke) on account of their involvement in a price fixing cartel between 2004 and 2014. The total fines imposed amount to EUR 3,857,000.

The infringement concerned the motive power battery segment of the Belgian industrial batteries market, as well as maintenance contracts related to such batteries. Motive power batteries are mainly used as an energy source in forklifts, locomotives and floor cleaning devices. In its decision, the Competition College found that the battery manufacturers had agreed to apply a lead surcharge to the selling prices of motive power batteries, in breach of Article 101 of the Treaty on the Functioning of the European Union and its Belgian equivalent, Article IV.1 of the Code of Economic Law. A lead surcharge is a fee charged on top of the net price of a motive power battery. The battery manufacturers had added the surcharge to adjust their prices to the sudden price increase of lead in 2003, an important component in the production cost of batteries.

The Competition College considered that the cartel could be divided into two periods. During the first period, i.e., 2004 to 2007, the companies involved held meetings during which they discussed the amount of the lead surcharge to be charged per battery type for each quarter. During the second period, i.e., after 2007, Enersys, in discussions with Hoppecke, calculated the lead surcharge for each quarter based on a fixed formula, i.e., on the capacity (ampère-hour) of a battery, and then communicated it to the other cartel participants. The investigation did not reveal the existence of a penalty mechanism to ensure compliance.

The Competition College considered that this conduct constituted a single and continuous infringement, given that all companies involved were aware, or should reasonably have been aware, that their behaviour contributed to the common objective of lessening competitive constraints between them. In addition, the Competition College found that competition in Belgium and trade between Member States were affected by these practices, given that the participants represented around 70% of the Belgian market. Finally, the Competition College also considered that there was no element in this case suggesting that the practices contributed to any efficiency.

The Competition College’s investigation was triggered by a leniency application submitted by Exide Technologies which obtained full immunity from fines in return. Battery Supplies, Enersys and Hoppecke also applied for leniency and obtained reductions of their fines of 20%, 30% and 40%, respectively.

All the undertakings involved agreed to settle and thus benefited from an additional 10% fine reduction. The settlement procedure is a new mechanism provided for by the Belgian Code of Economic Law, intended to simplify and accelerate the procedure leading to the adoption of an infringement decision.  This is the second settlement decision adopted by the Belgian Competition Authority after its decision of 22 June 2015 in the Supermarkets cartel case (See, VBB on Competition Law, Volume 2015, No. 6, p. 4, available at www.vbb.com).