Is There Engine Price Fixing in the EU?

Posted on May 31, 2011

According to a variety of press reports in Europe, a number of industrial engine manufacturers including Caterpillar Inc., General Electric Co. and MAN SE received visits last week from European Commission antitrust officials looking for possible collusion among producers of reciprocating industrial engines.

Caterpillar said the offices of its Perkins engine group were visited by EU regulators and the company is “cooperating fully with the officials,” Eric Amstutz, a spokesman for Caterpillar in Geneva, was quoted as saying. GE and MAN said they are also cooperating with the commission after company offices were raided by the EU’s antitrust agency.

European Union regulators were quoted as saying they had “reason to believe” that the companies may have violated the region’s price-fixing rules. The dawn raids, which took place on May 25th, are a first step in antitrust probes that may lead to fines of up to 10 percent of yearly revenue. Such inspections are a “preliminary step” and don’t necessarily mean the companies are guilty, the commission said.

GE’s Jenbacher diesel and gas engine group was visited by EU regulators at its facilities in Jenbach, Austria, said Greg Farrett, a spokesman for GE in Brussels. “GE is offering its full assistance to the commission and is cooperating with the investigation,” Farrett said.

MAN’s offices were visited last week and the company “decided to cooperate with the authorities,” Stefan Straub, a spokesman for the company in Munich. Tognum AG, was not raided, but received a written request for information from regulators last week, the company was quoted as saying.

Meanwhile, MAN separately announced that it was investigating possible irregularities during the handover of 4-stroke marine diesel engines produced by MAN Diesel & Turbo SE. The company said the management board of MAN SE has launched an investigation to be carried out by the compliance department of MAN SE, together with external consultants. This investigation is still ongoing.

In a press release dated May 25th, the management board of MAN SE said it had been informed about interim results. According to that report, it was possible to externally influence the fuel consumption values for 4-stroke marine diesel engines obtained on test stands at MAN Diesel & Turbo SE to display results that deviated from those actually measured. The extent to which this influence possibility has been made use of in the context of handover to customers and the potential financial consequences for the MAN Group will be examined in the course of further investigations. MAN SE will continue to investigate the matter and will contact the customers concerned.

MAN SE said it has informed the public prosecutor's office Munich I of the ongoing investigation and will co-operate closely with it in establishing the facts.

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