The case is the European Commission's first cartel decision in the defence sector.
The European Commission has slapped German defence company Diehl with a €1.2 million fine for participating in a cartel linked to the sale of military hand grenades – the Commission's first cartel case in the defence sector.
The Commission said in a statement that Diehl teamed up with its rival RUAG, a Swiss aerospace and defence company, to split markets in countries across the European Economic Area (EEA) between themselves for almost 14 years.
Under the scheme, only the designated manufacturer was allowed to sell grenades in a given territory unless the other company gave its consent.
The Commission said on Thursday that both companies had admitted to their role in the cartel and that RUAG avoided a fine under its leniency programme, which enables businesses that provide sufficient information about a cartel they have participated in to receive full or partial immunity from fines.
Had RUAG not revealed the scheme, it would have faced a €2.5 million penalty, the Commission said, adding that Riehl qualified for a 50% fine reduction thanks to its cooperation in the ensuing investigation, and a further 10% reduction for the timeliness of its cooperation.
The probe found that the cartel covered countries throughout the EEA and spanned from 7 November 2007 until 23 November 2021, according to the Commission. RUAG’s participation ended slightly earlier in April 2021.
European Justice Commissioner Didier Reynders noted in a statement that the case is the Commission’s first cartel decision in the defence sector.
“At a time of evolving geopolitical realities, it is also a reminder that we will not tolerate any cartels in any sectors, strategic ones or not,” he said.
A spokesperson for RUAG reiterated that the company “promptly and proactively” reported the misconduct to the antitrust authorities, filing a voluntary report.
Diehl did not respond to a request for comment.