Price-Fixing Scandal

The fine was imposed despite E.ON's frantic attempts to explain why a seal EU antitrust investigators had used to close a room full of evidence had been broken the very same night the room was closed.

The scandal broke in May, 2006, when the EU Commission launched a surprise inspection of Germany's energy firms, suspecting that they were colluding to fix prices and stifle competition.

During the operation, investigators collected "highly-sensitive documents," which they placed in a room on E.ON's premises for overnight storage.

Broken tape, bits of glue

They sealed the room with a special, commission-issue plastic strip which would show the word "void" if it were removed.

When they returned next day, they found that one seal was covered in the word "void" and was surrounded by pieces of glue -- as if someone had tried to stick it back on again.

"As the documents were not yet listed, the commission was unable to ascertain whether and which documents were taken by E.ON," a European Commission press release said.

E.ON officials initially claimed that the EU's executive arm had held the only key to the room -- an argument which fell apart when it was revealed that 20 keys were in circulation among E.ON employees.

Then the company suggested that the seal could have fallen off because of vibrations caused by conference preparations in an adjoining room, the use of chemical cleaners, the age of the seal or the level of humidity in the building.

E.ON added that the seals had only been marked by "minor modifications" and that the door in question had been manipulated by commission officials.

Commission rejects E.ON's excuses

The European Commission, however, "came to the conclusion that the arguments are not valid," the statement said.

The breaking of the seal -- the first such incident in EU history -- was a "serious infringement against competition law" and liable to a fine of up to 1 percent of E.ON's total turnover, the statement said.

However, the commission settled on the relatively mild sum of 38 million euros as a sufficiently "clear message" to all companies that hindering competition probes would not be tolerated.

E.ON officials said they were preparing a legal response to the EU's fine. In a statement, the company said it "resolutely rejects the European Commission accusation."

Apart from the dominant position it holds in its home market, Germany, E.ON is also present in the EU in Britain and Sweden. In addition it has interests in the United States and Russia.

The company posted turnover of almost 68 billion euros in 2006.