Italian Steel Firms Dodge $99M Cartel Fine on Technicality

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By Eleanor Tyler

Italian steel company Ferriere Nord SpA Sept. 21 won a battle against an 83 million euro ($99 million) fine that Europe’s competition watchdog had levied against it and 10 other competitors for rigging the market on reinforcing bars.

In the most recent development in the 15-year case, Europe’s highest court overturned the fine for all the companies because it said the commission violated Ferriere Nord’s procedural rights. The European Competition Commission has charged the companies twice, and Ferriere Nord has appealed twice.

The European Court of Justice’s Sept. 21 opinion sends the competition commission back to the starting line on a decades-old cartel. The offending conduct occurred from around 1989 to 2000. The commission must now decide whether to expend the resources to start over with years of litigation and possible appeals.

The commission alleged in 2002 that Ferriere Nord and Riva Fire S.p.A.,Valsabbia Investimenti S.p.A., Ferriera Valsabbia S.p.A. Lucchini S.p.A., S.P. S.p.A., Leali S.p.A., Acciaierie e Ferriere Leali Luigi S.p.A., IRO Industrie Riunite Odolesi S.p.A., Feralpi Holding S.p.A., and Alfa Acciai S.p.A. formed a cartel in the late 1980s.

By 2000 the companies, which by then formed only eight corporate families, had garnered more than 80 percent of the market share and reduced the market from 40 competitors to the surviving cartel members. The EC fined each according to its market position in 2002.

A lower court threw out that complaint in 2007 because it was based on the wrong law. The EC had charged the companies under the expired World War II-era treaty establishing the European Coal and Steel Community. It was replaced by a treaty forming the European Union.

The commission then issued a new fine under the correct law in 2009, but that time it didn’t grant the companies a new hearing. Ferriere Nord appealed again, and the Court of Justice said the commission was obligated to offer a hearing. The court ordered the commission to pay Ferriere Nord’s costs for the whole legal battle, which is standard when it upholds an appeal.

To contact the reporter on this story: Eleanor Tyler in Washington at etyler@bna.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bna.com

For More Information

The court's opinion is http://src.bna.com/sKr

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