On February 25, The European Commission announced that it is investigating several auto suppliers on suspicions of anti-competitive practices on electrical distribution sectors. The commission stated that it has "reason to believe that the companies concerned may have violated European Union antitrust rules that prohibit cartels and restrictive business practices."
Subsequently, the commission raided several companies the day before, but did not name any specific companies. However, the German auto supplier Leoni AG confirmed the visitation of the European Commission onto the company's headquarters in Nuremburg.
"The European Union is doing research on a global international level," said Sven Schmidt, spokesman for Leoni. BMW, Peugeot and Daimler are the largest customers of Leoni, which acquired its electronics business from French supplier Valeo in 2008.
US-based Lear also mentioned on February 26, that it is "cooperating fully with the European Commission in their investigation," said Bob Rossiter, Lear's chairman, chief executive officer and President. "I am confident that our Company is not involved in any anticompetitive practices."
This is the statement from the European Commission, released on Thursday: "Antitrust: Commission confirms investigation into suspected cartel in the sector of automotive electrical and electronic components suppliers. The European Commission can confirm that, starting on February 24, 2010, Commission officials carried out unannounced inspections in several Member States at the premises of companies active in the sector of automotive electrical distribution systems (sometimes referred to as wiring harnesses) and of other components for automotive electronic and electrical distribution systems. The Commission has reason to believe that the companies concerned may have violated EU antitrust rules that prohibit cartels and restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union _ TFEU and Article 53 of the Agreement on the European Economic Area). The Commission's investigation is being coordinated with several other competition authorities worldwide."
The commission is particularly interested in wire harnesses that are generally considered the "central nervous system" of a car, serving as a link between the car's computers to the various relevant functions in the vehicle.
As with the investigation of Fair Trade Commission in Korea, the EC's surprise inspection is just a prelude of the suspected anticompetitive practices. The inspection does not imply that concerned companies are automatic guilty of antitrust practices nor does it prejudge the outcome of the investigation. The rights of alleged companies' defense will be respected by the European Commission, particularly the right of companies to be heard in the proceedings. Since no strict deadline to complete such investigation exists, the duration will depend on a number of factors, such as the complexity of the case, cooperation of the suppliers, and exercising the rights of the defense.
