The European Commission has fined lead battery majors Exide, FET (including its predecessor Elettra) and Rombat — along with trade association EUROBAT — a total of around €72 million ($85 million) for breaching EU antitrust rules.
The Commission said on December 15 that the fine related to participation in a “long-running cartel” in respect of automotive starter batteries and also involved Clarios (formerly JC Autobatterie).
However, Clarios was not fined because it received full immunity for revealing the existence of the cartel.
The Commission said it had also closed proceedings against lead manufacturing giant Banner and EUROBAT service provider Kellen.
The largest fine of €30 million was handed down to Exide. Rombat was fined €20.2 million (of which €11.5 million jointly and severally with Metair), while Elettra, FET’s predecessor, was fined €15.6 million.
FET was fined €6.1 million (of which €5.3 million was jointly and severally with Resonac) and EUROBAT was fined €125,000.
Batteries International reported in December 2023 that the Commission had formally launched proceedings under its price-fixing probe, which the Commission said had begun in September 2017.
Now the Commission has revealed that, for more than 12 years, manufacturers, Clarios, Exide, FET and Rombat (owned by Metair Investments), together with EUROBAT, entered into “anticompetitive agreements and engaged in concerted practices related to the sale of automotive starter batteries to automotive original equipment manufacturers (OEMs) in the European Economic Area”.
As lead is the most important input material and cost factor for the batteries concerned, battery producers pay a premium to suppliers to procure lead with the necessary quality, the Commission said.
“This cartel restricted competition and may have led to higher prices for the manufacturing of cars and trucks in Europe.”
The Commission found that the four manufacturers, helped by EUROBAT, agreed to create and publish premiums calculated based on their purchasing price of lead (the so-called EUROBAT premiums) in the industry publication Metal Bulletin.
They also agreed to use such premiums in the price negotiations with their respective OEM customers, such as manufacturers of cars and trucks, to ensure that the resulting surcharge was kept at a level higher than it would have been without such agreement.
In general, a surcharge is a legitimate tool suppliers use to reflect changes in raw material costs in product prices, allowing them to transfer this cost risk to the customers. However, the Commission said it was “clearly illegal for suppliers to secretly coordinate to introduce and use such a surcharge as an industry-wide standard”.
Teresa Ribera, the EU’s executive VP for clean, just and competitive transition, said: “We have zero tolerance for price fixing or any type of cartel. It is our duty to ensure that our citizens and businesses, including European auto manufacturers, can depend on suppliers that play fair and respect competition rules.
“With this decision, we also remind trade associations that they should not use their position as representatives of the industry to facilitate collusion among their members.”
In response to the commission’s announcement, Metair Investments said on December 15 the fine was likely to have serious financial implications on Rombat’s business operations. Metair’s and Rombat’s boards are considering the commission’s findings — including an assessment of all legal options and the extent to which the fine may be enforceable against Metair.
Metair said it refuted the legal presumption that it exercised decisive influence over Rombat in this matter.
Key decisions regarding the implementation of the EUROBAT premium had already been firmly established by the time Metair acquired Rombat in 2012 and were not identified during the due diligence process carried out by external advisers, Metair said.
