German arms maker Diehl fined €1.2 million over hand grenade cartel

German defence company Diehl was slapped with a €1.2 million ($1.28 million) fine by the European Commission on Thursday for participating in a cartel for the sale of hand grenades together with Swiss arms maker RUAG.

Both companies admitted to being involved in the cartel, but RUAG escaped a fine because it disclosed the cartel to the commission, a press release said.

Between 2007 and 2021 the two arms makers split national markets in Europe between themselves with only one manufacturer being entitled to sell its grenades in the allocated countries, the commission said.

Diehl's fine would have amounted to €2.5 million under European Commission rules, but the German company received a significant reduction because it cooperated with the investigation and admitted its involvement.

"This is the first cartel decision in the defence sector," said Didier Reynders, EU Commissioner in charge of competition policy, in a statement.

"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," he added.