BNR – The European Commission (EC) has fined the German defence company Diehl €1.2 million for involvement in a cartel related to the sale of military hand grenades. This marks the Commission’s first cartel case within the defence sector.

According to the EC’s statement, Diehl collaborated with its competitor RUAG, in a scheme that spanned nearly 14 years.

Together, they divided markets across the European Economic Area (EEA) among themselves.

Under this arrangement, only the designated manufacturer was authorised to sell grenades in a territory unless the other company consented. Both companies have confessed to their roles in the cartel.

RUAG Escapes Fine Through Leniency Programme

RUAG, taking advantage of the leniency programme, escaped without a fine.

It grants businesses full or partial fine immunity if they provide sufficient information about a cartel they were in. Without the disclosure, RUAG would have faced a €2.5 million penalty.

Additionally, Diehl’s cooperation in the subsequent investigation led to a 50% reduction in its fine and an additional 10% reduction for the timeliness of its cooperation.

The investigation revealed that the cartel extended its influence throughout the EEA from 7 November 2007 until 23 November 2021. However, RUAG’s participation concluded slightly earlier in April 2021.

Diehl Case: EC Dedicated to Combating Anti-Competitive Behaviour

European Justice Commissioner Didier Reynders emphasised that this case marks the Commission’s first cartel decision in the defence sector.

He underscored that even in a shifting geopolitical landscape, cartels in any sector, strategic or not, will not be tolerated.

RUAG’s spokesperson reaffirmed that the company swiftly and proactively reported the wrongdoing to antitrust authorities, filing a voluntary report.

Diehl did not provide a response to requests for comment.

Diehl did not make any remarks or respond to comment requests.

This huge decision sends a strong message that the EC is dedicated to fighting anti-competitive efforts, even in strategically important fields.