Siemens, Toshiba Czech Fines Were Legal, EU Court Aide Says

Siemens AG (SIE), Hitachi Ltd., Toshiba Corp. (6502) and other electric-equipment makers should have more than 900 million koruna ($52 million) in Czech fines upheld, an adviser to the European Union’s highest court said.

“The Czech competition authority was entitled to impose penalties under national law,” even though EU antitrust authorities had also punished the cartel members, Advocate General Juliane Kokott of the EU Court of Justice, said in a non-binding opinion today. The Luxembourg-based EU court follows such legal advice most of the time.

The Czech antitrust regulator fined at least 10 companies a record 979 million koruna in 2007, a month after the EU regulator had levied a 750.7 million-euro penalty ($1.05 billion) on them for colluding on prices of electric equipment. The companies, also including Areva SA (CEI) and Alstom SA (ALO), are challenging the legality of the Czech fine, which was later cut to 942 million koruna.

A Czech regional court in 2008 overturned the national penalty, ruling that the companies couldn’t be fined twice, once by the European Commission and once by Czech regulator. On appeal by the Czech antitrust watchdog, a high court in 2009 annulled that ruling and said the regional court had to re- examine the case.

The regional court referred the case to the EU tribunal questioning whether EU or Czech law applied for the period during which the cartel took place in the Czech Republic before the country became part of the 27-nation bloc in May 2004.

‘Same Offense’

The EU decision and the decision of the Czech competition authority “do not relate to the same material acts, which means that the Czech competition authority did not infringe the prohibition against punishing the same offense twice,” the court said in a statement on Kokott’s advice.

Mitsubishi Electric Corp. (6503) and Toshiba in July won an appeal to overturn their EU fines of 118.6 million euros and 90.9 million euros, respectively. Fuji Electric Co. won a fine reduction from 2.4 million euros to 2.2 million euros. Siemens, Europe’s largest engineering company, lost an appeal in March against its 396.6 million-euro fine, the highest in the EU cartel.

“We’re disappointed with the conclusion that’s been reached and we’ll now wait for the court’s decision,” said Anthony Dawes, a lawyer in the Brussels office of law firm White & Case LLP, who represented Toshiba.

Siemens spokesman Alexander Becker declined to comment as did Mitsubishi. Spokespeople for Areva and Alstom didn’t immediately respond to e-mails seeking comment. Toshiba, Hitachi and Fuji Electric didn’t immediately respond to e-mails seeking comment outside normal office hours.

The case is: C-17/10, Toshiba Corporation, Areva, Mitsubishi Electric Corp., Alstom, Fuji Electric, VA TECH Transmission & Distribution GmbH & Co. KEG, Siemens AG, Hitachi Ltd (6501), Japan AE Power Systems Corp., Nuova Magrini Galileo SpA v. Urad pro ochranu hospodarske souteze.

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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