Two Whirlpool Corp. (WHR) units and Panasonic Corp. (6752) are among companies that agreed to pay European Union antitrust fines totaling 161 million euros ($215.6 million) for fixing prices of refrigerator compressors.
The Whirlpool units were fined a total of 54.5 million euros and Panasonic will pay 7.7 million euros after they settled a European Commission cartel probe into agreements that set prices for small compressors used in refrigerators and freezers and in vending machines and ice-cream coolers.
“At a time of economic hardship it is all the more important to promote fair competition and step up the fight against cartels which inflict serious damage on productivity and economic growth,” EU Competition Commissioner Joaquin Almunia said in an e-mailed statement.
The commission has made fighting cartels a priority in recent years, imposing 3.3 billion euros in fines last year. EU investigators raided producers of refrigeration compressors in 2009.
Danfoss A/S, based in Nordborg, Denmark, agreed to pay 90 million euros, the largest fine, and Appliance Components Co. SpA of Italy must pay 9 million euros for coordinating prices and market shares from 2004 to 2007.
Whirlpool will set aside an extra $1.2 million in the fourth quarter on top of the $71.7 million reserve already established to cover the fine, it said in a regulatory filing today. Whirlpool previously set aside as much as $306 million to cover a possible fine and related costs, it said in July.
“It’s a very embarrassing case,” Danfoss Chief Executive Officer Niels Bjorn Christiansen said today in Copenhagen. Employees at Danfoss’s German unit exchanged information, including prices, he said. They no longer work for the company, Christiansen said. The company’s management found out about the cartel after the EU raid in 2009, he said.
“There was nothing in the profit and loss accounts of the German subsidiary that raised our suspicions,” he said in an e-mailed statement. “The business was performing poorly for a number of years and the performance didn’t change in the period during which we now know the violations took place.”
Panasonic’s fine will have “no material effect on the financial outlook for the fiscal year ending March 31, 2012,” Katsuyuki Ito, a spokesman for the company in Wiesbaden, Germany, said in an e-mail. Panasonic “takes this matter seriously and will make every effort to maintain the public’s confidence.”
Tecumseh Avoids Fine
Applied Components Co. declined to immediately comment.
Tecumseh Products Co. (TECUA) of Ann Arbor, Michigan, wasn’t fined because it told the EU about the cartel. Panasonic wasn’t involved in all aspects of the cartel and quit it in 2006, regulators said. One of the companies had its fine reduced because of financial difficulties, the EU said, without naming the business.
Whirlpool’s Embraco unit last year paid $91.8 million to settle a similar U.S. Justice Department probe. Osaka, Japan- based Panasonic also paid a $49.1 million fine under the U.S. settlement.
Whirlpool, Panasonic, Danfoss, Tecumseh and Appliances Components face multiple U.S. lawsuits by customers seeking compensation for alleged price-fixing. Price-fixing convictions in the U.S. can expose companies to fines and triple damages for customers that seek restitution through civil lawsuits.
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