Lead battery giants, EUROBAT in EU price-fixing probe

Lead battery giants, EUROBAT in EU price-fixing probe

Lead battery giants, EUROBAT in EU price-fixing probe 1000 667 Batteries International

December 6, 2023: EU competition chiefs have accused Clarios, Exide Technologies, Banner, Rombat, Fiamm Energy Technology and its predecessor Elettra of possible collusion to fix starter battery prices, aided by trade association EUROBAT.

The European Commission said on November 30 it had launched an investigation into the alleged breaches of EU antitrust rules — which could potentially see the firms face substantial fines of up to 10% of their annual global turnover if the Commission concludes there is sufficient evidence rules were broken.

The Commission said it was “concerned EUROBAT and its service provider, Kellen, were aware of the alleged conduct and actively contributed to it by assisting the battery manufacturers in creating and running the so-called EUROBAT premium system”.

The Commission’s probe is focused on the period between 2004 up to 2017. It is alleged the firms published and agreed to use new indices in their price negotiations with car producers, the aim of which was — allegedly — to fix an important element of the final battery prices.

According to the Commission, the conduct concerns automotive starter batteries sold to car producers in the European Economic Area for use in new cars and as replacements — but only if sold via the car producers’ service network of authorized repairers.

All of the companies named have been sent a ‘statement of objections’ — a formal step in the Commission’s investigations.

Next steps

The companies now have an opportunity to examine documents in the Commission’s investigation file, reply in writing and ask for a hearing with competition chiefs.

There is no legal deadline for the completion of such an investigation, the duration depends on factors including cooperation by companies in the investigation, the Commission said.

“If the Commission’s preliminary view is confirmed, this conduct would infringe Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’) and Article 53 of the EEA Agreement, which prohibit cartels and other restrictive business practices.

“This prohibition includes anticompetitive conduct by associations of companies. The sending of a statement of objections does not prejudge the outcome of an investigation.”

EU commissioner in charge of competition policy, Didier Reynders (pictured), said: “To be effective, competition requires economic operators to act and to determine their prices independently of each other.

“We are concerned that battery suppliers limited price competition, thus harming their customers, in this case car producers, and, ultimately, European consumers.”

Initial responses

Of the battery manufacturers named by the Commission, only Clarios had responded to Batteries International as of December 6.

Director of external global communication and communications for the EMEA region, Christian Riedel, said: “We do not comment on pending investigations and legal proceedings, but we don’t believe we have any material exposure. We are cooperating with authorities in their investigation.”

A EUROBAT spokesperson told Batteries International on December 4 the association had received its statement of objections and “will start looking into it, but at this point we cannot make any comments”.

The spokesman declined to give details about the so-called EUROBAT premium system.

An industry insider told Batteries International on condition of anonymity today that potential fines of up to 10% of global turnover could be “hefty” — noting that Clarios’s turnover alone was around $8 billion in 2020.

On EUROBAT, the insider said they “couldn’t understand” why the trade body did not issue a fuller statement. “Their silence looks bad, but I can’t believe they had any commercial gain in supporting something that would jeopardize their reputation.”

Background

This is not the first time the European Commission has investigated suspected breaches of antitrust rules relating to the battery sector.

In February 2017 the European Commission fined lead recycling firms Recyclex, Campine and Ecobat Technologies a combined total of €67.6 million (then the equivalent of more than $72 million) for forming a cartel to fix the prices of scrap car batteries, in breach of EU antitrust rules.

The collusion was carried out via telephone calls, emails and text messages, and coded language was used to signal different price levels, the Commission said.

All of the fines imposed were subsequently reduced.

Photo credit: Claudio Centonze / EC Audiovisual Service