On appeal, Düsseldorf court further increases FCO fine

10 June 2013

Dr. Jörg Witting, Fabian von Busse

In appeal proceedings by five members of a liquefied natural gas ("LNG") cartel, the Düsseldorf Higher Regional Court has imposed a total fine of EUR 244 million, increasing the fine originally imposed by the German Federal Cartel Office ("FCO"). The cartel members are now confronted with individual fines which are up to 85% higher than in the original FCO order.

In its original decision of 2007, the FCO held that in the area of tank and bottled LNG the cartelists had established a customer protection system which also comprised elements of price fixing. Within this system, other cartelists’ customers could not be solicited and customers willing to change their LNG supplier received deterring prices or no prices at all. According to the FCO, the cartel members informed each other about customer requests and, if a customer still changed its supplier, arranged for compensatory payments.

The FCO held that between 1997 and 2005 this system led to price differences in the Tank and bottled LNG area of up to 100% and imposed a fine of EUR 180 million against the five cartel members in question.

Upon appeal by the companies, the Düsseldorf court has now even increased the fines imposed by the FCO. According to the court, the duration and the significance of the cartel, as well as LNG being a good of general interest, constituted aggravating aspects in the assessment of the amount of the fine. In addition, the court estimated the cartel profit as being higher than the FCO and thus came to the conclusion that the original fines were to be increased. With more than 130 hearing days, the court proceedings were among the largest cartel proceedings in Germany.

Andreas Mundt, president of the FCO said: “This judgment sends the clear signal that cartelists are prosecuted with high fines. From the oral hearing the Higher Regional Court has gained further insight for the assessment of the significance of the acts and thus even exceeded our fines for some companies.” The judgment of the Düsseldorf court is not final and may yet be appealed to the Federal Supreme Court by the companies. Besides the proceedings in question, the fines against other members of the LNG cartel are dealt with in separate proceedings.

The proceedings show that German courts do not shy away from overruling an FCO decision even to the detriment of the appealing parties if further, prior unconsidered aspects become apparent in the court proceedings.

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