Shocking - maximum fines for electronic component suppliers

The fines on three of the cartel participants were capped at the maximum 10 per cent of their total annual worldwide turnover. By contrast, Sanyo Electric, the ninth supplier in the cartel, received full immunity for "whistle-blowing" (i.e. informing the Commission of the existence of the cartel).

Capacitors are an essential component in the circuits of almost all electronic products. The Commission's investigation related specifically to the supply of tantalum and aluminium electrolytic capacitors. 

The Commission's investigation began in early 2014, following receipt of an application for immunity from Panasonic Corporation and its subsidiaries. Panasonic acquired a majority stake in Sanyo Electric in 2009, and Sanyo Electric became a wholly-owned subsidiary of Panasonic in 2011. Besides Sanyo's receipt of full immunity, four other firms (Hitachi Chemical, Rubycon, ELNA and NEC Tokin) also benefitted from reductions in the amount of their fines (of between 15 and 35 per cent) under the Commission's leniency programme for co-operating with the Commission's investigation. Despite the co-operation of five firms to the cartel, this was clearly still a challenging case for the Commission, as its investigation took four years, and it took nearly two and a half years from the Statement of Objections in November 2015 until the Decision.

The cartel was found to have lasted from 1998 to 2012, and involved multi-lateral meetings and other contacts through which commercially sensitive information was exchanged to co-ordinate market behaviour and avoid price competition. The Commission also found that on certain occasions the participants agreed to, and monitored, the implementation of price agreements. Although the meetings and contacts took place mainly in Japan, the Commission found that the cartel had a global reach and affected the EEA. However, the EU Commission is not the only regulator to have taken action: there have been parallel proceedings in the US, China, Japan, Taiwan, Korea and Singapore. 

The parties' internal documents helped the Commission to conclude that the participants were aware that their conduct was anti-competitive, through comments such as, "Please destroy after reading". The involvement of senior management in the cartel was considered an aggravating factor.

Interestingly, because Rubycon was the first party to provide evidence of the cartel in respect of the period from 1998 to 2003, the Commission effectively gave it immunity in respect of that period, by not taking those years into account when calculating Rubycon's penalty. Nevertheless, despite receiving this immunity and a further 30 per cent reduction for leniency, Rubycon was fined the maximum 10 per cent of its total worldwide turnover.   

This case illustrates that the Commission is prepared to take action against cartel arrangements concluded anywhere in the world if they have an impact on markets in the EEA. Most importantly of all, it demonstrates how being the first to identify and tackle potentially anti-competitive behaviour can save a business substantial sums of money: in this case Sanyo and Panasonic avoided a fine of more than €32 million.