The Competition Authority has imposed fines of 470 million euros on four companies in the electrical equipment sector, including 43 million euros against the company Legrand, based in Limoges. It punishes manufacturers and distributors for “agreements” on fixing resale prices. A judicial investigation is open. The Limougeaud group plans to appeal.
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The amount constitutes the fifth largest sanction pronounced since 2011. This Tuesday, October 30, the Competition Authority punished, for a total of 470 million euros, four companies specializing in electrical equipment: on the one hand, the manufacturers Schneider Electric and Legrand; on the other, the distributors Rexel and Sonepar. Among them, the company Legrand, based in Limoges, was fined 43 million euros. The administrative body denounces “vertical agreements on prix”.
These sanctioned agreements concern low-voltage electrical equipment. The Competition Authority criticizes companies for a system of “exemption“, in which manufacturers, such as Schneider Electric and Legrand, compensate distributors, such as Rexel and Sonepar, for the discounts granted to end customers.
In a normal competitive situation, distributors are expected to purchase at a wholesale price from manufacturers and then freely choose their resale prices from customers. However, according to the Competition Authority, with this exemption system, manufacturers had control of the final prices, and maintained them at a level “artificially raised“, by limiting competition between brands, and this, “for the benefit of all participants“.
Headquarters of the Legrand company, in Limoges.
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© Nicolas Chigot / France Télévisions
In a laconic press release published in reaction to this sanction, the Legrand company said:[prendre] knowledge of the decision“, more “categorically refutes the complaint against him“. The company also reserves itself “the right to appeal“.
The cartels in question allegedly spanned a period from 2012 to 2018. Of the four companies, the manufacturer Schneider Electric received the largest fine, with 207 million euros. Distributors Rexel and Sonepar were respectively fined 124 and 96 million euros.
The case also has a criminal component. A judicial investigation was opened by the Paris public prosecutor, after the transmission of a report from the general rapporteur of the Competition Authority. In a press release, it nevertheless specifies that the fine imposed “does not in any way prejudge the outcome of the criminal proceedings“For its part, the Legrand group says it reiterates “its firm commitment to strictly respect the law and in particular competition law“.
Born in Limoges in 1860, the Legrand company, listed on the CAC 40, presents itself as “the global specialist in electrical and digital building infrastructure“. Having become transnational, the group employs a total of nearly 38,000 employees across the planet, including 1,200 employees in Limousin.
