Ten European and Japanese engineering groups were hit yesterday with the second-largest penalty yet imposed under European antitrust laws after being convicted of running a cartel to control the manufacture and supply of electricity network equipment.

The European Commission imposed fines of e750.7m (£494.6m) against the worldwide cartel, which began operating in 1988 and lasted until 2004, when commission antitrust officials raided cartel members' offices in May of that year, in the middle of a price-fixing meeting.

The probe focused on the market for gas-insulated high-tension electric switch-gear, used to control flow in electricity grids. Customers included state-owned public utilities, municipalities and private companies.

Siemens, the largest engineering company in Europe, received the biggest fine, e396.6m. Other European firms included Alstom and Schneider Electric. Japan's Fuji Electric Holdings, Hitachi, Mitsubishi Electric and Toshiba were also fined.

Competition Commissioner Neelie Kroes has been cracking down on cartels since taking over for Mario Monti in 2004. The commission has fined seven cartels a record e1.84bn in the last year.

Kroes said: "The commission has put an end to a cartel which has cheated public utility companies and consumers for more than 16 years. The commission has once more shown it will not tolerate cartels in Europe and the damage they do in any area of business."

The highest fine imposed by the commission in a cartel case was a record e790.5m for fixing vitamin prices in 2001. The companies have a right to appeal the decision to the European Court of First Instance in Luxembourg.

So far, only Munich-based Siemens has said it would appeal, calling the penalties "completely exaggerated."

ABB, the world's largest builder of electricity networks, tipped off the EU and avoided a e215.2m fine.