The FCCA proposes a EUR 35 million fine on power line builder Eltel for participating in a cartel

The Finnish Competition and Consumer Authority (FCCA) today submitted a proposal to the Market Court to impose a fine of EUR 35 million on Eltel Networks Oy and Eltel Group Oy (hereinafter Eltel). The FCCA’s investigations show that Eltel and Empower Oy have engaged in illegal cooperation in the design and construction market of power lines in Finland. These prohibited actions began in October 2004 at the latest, and continued without interruption until March 2011 or longer. Empower was exempted from the fine on the basis of the Competition Act for revealing the existence of the cartel.

The FCCA initiated its investigation after Empower, the other party to the prohibited actions, provided the FCCA with information and evidence on the cartel’s operations in order to be exempted from paying any fines. The FCCA’s investigation shows that Eltel and Empower had agreed among themselves the prices, margins and distribution of contracts pertaining to future power line projects.

The FCCA considers the actions of Eltel and Empower to be a serious violation of Finnish antitrust legislation and EU’s antitrust regulations. The companies colluding in these actions were the two most significant power line contracting companies operating in Finland, and their harmful cooperation covered the entire country.

The FCCA granted an exemption from the fine for Empower, which revealed the violation. The FCCA proposes that a EUR 35 million fine be imposed on Eltel. The nature, scope and duration of the violation as well as Eltel’s substantial net sales, amounting to around EUR 1.1 billion in 2013, were considered when determining the amount of this fine.

Cartels result in the elimination of customers’ ability to choose and forces them to pay higher prices than under real competitive conditions. Cartel activities should be penalized severly enough to prevent these activities from becoming profitable. Fines must cancel out any benefits gained through unlawful activities, while also penalising the participants. Fines should also act as a deterrent to engaging in similar activities, or continuing or renewing them.

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