EU fines German firm for botched inspection

30th January 2008, Comments 0 comments

E.ON is charged with trying to impede an anti-trust investigation.

Brussels -- The European Commission announced Wednesday it was fining German energy concern E.ON 38 million euros ($56 million for breaking into a room sealed by investigators in 2006.

The fine was imposed despite E.ON's frantic attempts to explain why a seal which Commission anti-trust investigators had used to close a room full of evidence had been broken the very same night.

The scandal, and the seal, broke in May 2006 when the Commission launched a surprise inspection of Germany's energy firms, suspecting that they were colluding to fix prices and stifle competition.

During the operation, investigators collected "highly-sensitive documents," which they placed in a room on E.ON's premises for overnight storage.

They sealed the room with a special, Commission-issue plastic strip, which would show the word "Void" if it were removed.

When they returned next day, they found that one seal was covered in the word "Void" and was surrounded by pieces of glue, as if someone had tried to stick it back on again.

"As the documents were not yet listed, the Commission was unable to ascertain whether and which documents were taken by E.ON," a Commission press release said.

E.ON officials initially claimed that the Commission had held the only key to the room - an argument, which fell apart when it was revealed that 20 keys were in circulation among E.ON employees.

They then suggested that the seal could have fallen off because of vibrations caused by conference preparations in an adjoining room, the use of chemical cleaners, the age of the seal or the level of humidity in the building.

The Commission "came to the conclusion that the arguments are not valid," the statement said laconically.

The breaking of the seal - the first such incident in EU history -- was a "serious infringement against competition law," and liable to a fine of up to 1 percent of E.ON's total turnover, it said.

However, the Commission settled on the relatively mild sum of 38 million euros as a sufficiently "clear message" to all companies that hindering competition probes would not be tolerated.

Apart from the dominant position it holds in its home market, Germany, E.ON is also present within the EU in Britain and Sweden. In addition it has interests in the United States and Russia. The company posted turnover of almost 68 billion euros in 2006.

DPA with Expatica

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