The French Competition Authority announced a substantial €470 million fine on Wednesday against Schneider Electric, Legrand, Rexel, and Sonepar. This unprecedented penalty stems from findings of vertical agreements in the low-voltage electrical equipment market that involved fixing resale prices to benefit both manufacturers and distributors, effectively harming competition and customer pricing.
Largest Penalty in Recent Years
This fine surpasses the combined penalties levied by the Competition Authority over the past two years, with Schneider Electric facing the heaviest charge of €207 million. The company “firmly contests the conclusion” and is considering an appeal. Other penalties include €124 million for Rexel, €96 million for Sonepar, and €43 million for Legrand, with Rexel and Legrand also expressing intentions to challenge the ruling.
Investigation Uncovered Anti-Competitive Practices
The investigation into these companies began in 2018 following a report by the French Anti-Corruption Agency and subsequent media coverage. The inquiry led to search warrants being executed across the companies involved. The authority found that between 2012 and 2018, the companies engaged in price-fixing under the guise of a "non-illegal" exemption system, maintaining artificially high prices in France by restricting competition between brands.
Legal Proceedings and Potential Appeals
In late 2022, Schneider Electric, Rexel, and Legrand were formally charged with “conspiracy” and corruption-related offenses. While the exemption framework itself is legal, the Competition Authority emphasized that it was used here to protect high price standards to the detriment of the end customer.
