The European Commission (the Commission) has this week issued a statement of objections (SO) against a number of Asian electrolytic capacitor manufacturers. An SO is a formal charge sheet that is sent by the Commission to addressees. In the document the Commission officially sets out its case against the addressees and stipulates a timetable by which any response must be made.
Electrolytic capacitors are common hardware components used to store and distribute power output, for example to smooth out variations in power supplies and to activate camera flashes. They are pervasive across the entire technological sector and are found in everything from TVs to mobile phones and even kitchen appliances.
The Commission has alleged that 10 Asian capacitor manufacturers held regular meetings between 1997 and 2014 to discuss a range of commercially sensitive topics including market trends, pricing and specific customer information. As such, the Commission is seeking to establish that the parties have colluded in a manner which is in breach of Article 101 of TFEU. Although the addressees to the decision have not been named, it is understood that NEC Tokin, Panasonic and Nippon Chemi-Con amongst others have been under investigation by a number of competition authorities for this type of behaviour.
The issue of an SO is not surprising, with the capacitor market having been under increased international scrutiny with investigations launched by the US and China in April this year and the Commission formally announcing its investigation on 31 May.
If the parties are unsuccessful in rebutting the Commission’s arguments in the SO then the Commission has the ability to fine the manufacturers up to 10% of worldwide turnover and the parties could be vulnerable to substantial civil damages actions brought by affected customers.