Bundeskartellamt imposes fines on steel forging companies

The Bundeskartellamt has imposed fines totalling approx. 35 million euros on three steel forging companies and two senior staff members for their involvement in an anti-competitive exchange of information. The companies concerned are CDP Bharat Forge GmbH (now: Bharat Forge Global Holding GmbH) and Bharat Forge CDP GmbH, both based in Ennepetal and part of the Indian Bharat Forge Group, and the former Johann Hay GmbH & Co. KG Automobiltechnik (now: Musashi Bockenau GmbH & Co. KG), Bad Sobernheim.

The Bundeskartellamt’s investigations were triggered by a leniency application filed by the forging company Hirschvogel Umformtechnik GmbH based in Denklingen. In accordance with the Authority’s leniency programme no fine was imposed on this company.

Andreas Mundt, President of the Bundeskartellamt: “For many years leading German steel forging companies participated in various antitrust infringements. On the occasion of working group meetings which took place up to three times a year, senior staff of the companies exchanged competition-sensitive information with other forging companies from other European countries. This included information in particular about the respective cost situation of the companies, their pricing strategies and concrete negotiations with suppliers and customers. The aim of the participating steel forging companies was to pass on cost increases to the fullest extent possible to their customers without having to fear being undercut by their competitors. The working group was set up within Euroforge, the umbrella organization of the European national associations for the forging industry.”

The exchange of information, which regularly took place at least from October 2002 to December 2016, was aimed at passing on the companies’ own costs for manufacturing forged steel products and any changes in costs in full to their customers. The company representatives involved also pursued this aim in numerous bilateral and multilateral contacts outside the meetings of the working group.

Among the principal customers of the steel forging companies are the large car manufacturers and the automotive supply industry.

In calculating the fines the Bundeskartellamt took account of the fact that each of the companies had cooperated extensively with the authority throughout the proceedings. Furthermore, settlements could be reached with the companies involved, which also helped to reduce the level of their fines.

The fines imposed are not yet final and can be appealed to the Düsseldorf Higher Regional Court. The Bundeskartellamt did not initiate a proceeding against the foreign forging companies for discretionary reasons.

A case summary in accordance with Section 53(5) of the German Competition Act (GWB) will be published shortly on the Bundeskartellamt's website