Romania fines electricity meter cartels

Romania’s Competition Council has imposed €15.8 million in fines against a pair of cartels for anti-competitive behaviour that rigged bids for the supply of electricity meters.

Six electricity meter providers were found responsible of setting up a cartel-like deal in which they agreed not to compete against each other in public procurement tenders organized by electricity providers.

This led to higher prices for electricity meters and higher electricity costs for end-consumers, according to the Competition Council.

The six companies that participated to the agreement were AEM, Energobit, Elster Rometrics, Landis+Gyr AG, ECRO SRL, and Electromagnetica.

AEM cooperated with the Competition Council and provided evidence of the agreements, therefore gaining lenancy and therefore had its fines waived.  Meanwhile, the other companies received fines  of between €114,000 and €5.9 million.

Electromagnetica was fined €2.15 million, representing 4.23% of the company’s 2016 turnover. The company said it would challenge the sanction in court.  The company was previously fined €1.93 million by the Competition Council in early 2016 in connection with a separate investigation that targeted the bilateral contracts between power producer Hidroelectrica and ten electricity traders.

State-controlled electricity firm Electrica was also fined €2.32 million, representing almost 3% of its non-consolidated turnover, for allegedly breaking public procurement law in several tenders for the purchase of electric meters and auxiliary equipment.

The company cooperated with the Competition Council’s investigation and said the irregularities were caused by lower-level employees without the knowledge of senior management, according to a report Electrica sent to the Bucharest Stock Exchange.

The company also said it would judicially challenge the Competition Council’s fine. Electrica is one of Romania’s most important electric power distribution companies with over 3.6 million customers.

Sources: Global Competition Review, 8th January 2018; and, Romania