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Commission fines defence company €1.2 million in cartel settlement

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The European Commission has fined defence company Diehl €1.2 million for participating in a cartel concerning the sale of military hand grenades together with its rival RUAG. Both companies admitted their involvement in the cartel and agreed to settle the case. RUAG was not fined as it revealed the cartel to the Commission under the leniency programme. The product concerned by the cartel is military hand grenades.

The Commission investigation revealed that the two manufacturers split national markets across the European Economic Area (‘EEA') between themselves during almost 14 years. Following this allocation, only the designated manufacturer was entitled to sell military hand grenades in its allocated territory unless the other party gave its consent.

Both companies cooperated with the Commission under the leniency programme (2006 Leniency Notice): RUAG received full immunity for revealing the cartel, thereby avoiding a fine of ca. € 2.5 million, while and Diehl benefited from a 50% reduction of the fine for its cooperation with the Commission's investigation.

Commissioner Didier Reynders (pictured), in charge of competition policy, said: "We fine today Diehl for participating in a cartel for the sale of hand grenades together with its rival RUAG. This is the 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."

A press release is available online.

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