On June 14, 2012, the Competition Tribunal ruled in favor of the National Economic Prosecutor Office’s lawsuit against Tecumseh Do Brasil and Whirlpool S.A., who were accused of having violated article 3 of D.L. N° 211, by adopting and implementing an agreement with the objective of artificially raising the price of low potency hermetic compressors in the Chilean market, which are an essential inputs for manufacturing refrigeration equipment.
The defendant Whirlpool S.A. was fined with 10.500 UTA (approximately US $ 6 million), in consideration of the illicit economic benefits that the sanctioned conduct generated, and its severity. The Tribunal rejected the company’s exceptions of lack of jurisdiction, exceeding the statute of limitations, and res judicata.
Regarding the defendant Tecumseh Do Brasil, it was exempted from paying a fine, in accordance to the National Economic Prosecutor’s Office’s request, under article 39 bis of D.L. N° 211, which establishes leniency benefits in collusion cases. During the National Economic Prosecutor’s Office’s investigation, Tecumseh confessed to have taken part –at least since 2004- in an international cartel with Whirlpool, Danfoss, ACC and Matsushita, with the object of artificially and illicitly raising the price of refrigeration hermetic compressors.
The Tribunal analyzed Tecumseh’s confession, as well as statements from that company’s high executives and personnel, in their own merits, and also abundant written evidence –interchanges of e-mails between the cartel’s members- that accounted for contact between competitors, and for the operating mechanism of the cartel.
The analysis of that evidence proved the existence of the agreement between the world’s main compressor manufacturers, including Whirlpool and Tecumseh, at least since mid 2004, as well as permanent communication between executives of both companies, with the objective of coordinating price increases by geographic region on a worldwide level. This coordination would have had effects in Chile –at least- starting in January 2005, and until December 2008.
The decision analyzed the level of price increases of compressors imported into Chile, determined by the collusive coordination between the defendants, and its effect on the increase in production costs of importing firms in Chile was proven. For the two companies participating in the agreement, this translated into higher profits than what they would have obtained without colluding.