BRUSSELS (Reuters) - The EU is investigating a German company it used to help make its case in a solar panel dumping dispute with China, following complaints from firms that install the panels that Brussels was misled by erroneous data, a letter reviewed by Reuters showed.
The data, supplied by the Bonn-based consultancy firm Europressedienst, helped to build the Commission's case that Chinese companies were dumping solar panels at below cost in Europe, a dispute defused at the weekend when Beijing and Brussels agreed to curb Chinese imports and avoid tariffs.
The data is disputed by EU firms that install solar power systems, who believe it may have been used to exaggerate Europe's capacity to produce its own solar panels.
The installers benefit from cheap Chinese imports, putting them at odds in the trade dispute with European firms that make panels, which accused China of dumping. For the manufacturers, it was important to show Europe had the capacity to meet demand.
Any doubts about the handling of the case could be damaging to the Commission's standing as it seeks to manage a tense relationship with China. A majority of EU governments were against duties on China's solar panel imports.
China denies dumping. Other trade disputes with China are still outstanding, including one involving EU wine.
A July 2 letter to Europressedienst seen by Reuters reveals for the first time that the Commission, the EU's executive, has started its own investigation into the data firm, seeking to double check information it provided about the solar market.
The installers say Europressedienst gave the Commission data that had earlier been used by European solar panel makers to make their case that Chinese rivals were dumping.
They also say Europressedienst had previously done work for Germany's main solar panel maker SolarWorld SWVG.DE and manufacturers' lobby group EU ProSun, a suggestion that could imply a conflict of interest.
Europressedienst declined to comment on the matter.
"Unfortunately, as consultant of the European Commission with a specific work order, we cannot comment on any point towards the press," the firm said in an e-mail. It declined to elaborate further and referred questions to the Commission.
Milan Nitzschke, president of EU ProSun and vice president of SolarWorld, confirmed on Monday that the lobby group used Europressedienst data in its initial complaint about dumping to the Commission last year, but denied any alliance with the research firm to inflate the size of EU solar capacity.
He also confirmed that SolarWorld had employed Europressedienst's director to help on marketing and publication projects, but said it had not paid him to produce data or work on the anti-dumping case.
The Commission denied on Monday that the figures provided by Europressedienst could have influenced the outcome of the solar panels case and said it was standard procedure for it to check into data supplied by consultants. The Commission also said it relied on its own data for main details in the case.
At the heart of the data dispute is whether Europressedienst's numbers exaggerate the European Union's ability to meet its own solar panel needs, which could serve those who wish to show Chinese imports are not needed.
Europressedienst is cited 23 times as a source for data in the Commission's ruling of June 4, which found Chinese exporters guilty of dumping and ordered penalties.
A Commission spokesman said on Monday that the Commission relied on Europressedienst only for general data, such as Europe's overall solar panel sales volumes, production and the number of employees, which would not have affected its conclusions in the case.
For more detailed figures, such as industry sales prices, the cost of production and profits, the Commission used data produced from its own questionnaires that were sent to solar companies, the spokesman said.
Nevertheless, the Commission wrote to Europressedienst on July 2 to schedule an "on-the-spot verification" for July 15-16 at Europressedienst offices to "check the macroeconomic statistics ... provided".
People with knowledge of the matter said the inspection went ahead as scheduled. One of the three officials who carried out the inspection confirmed to Reuters that an investigation was under way, but declined to give details.
In the Commission's letter reviewed by Reuters, Europressedienst was told to have all original documents available, be ready to work late and prepared to submit any errors with explanations of why they occurred.
"The purpose of the verification is to check the macroeconomic statistics that you provided on 23 April 2013, the related methodology submitted on 6 May 2013 and any other information relevant to this proceeding," said the Commission in its letter to Europressedienst.
EU Trade Commissioner Karel De Gucht resolved the solar panel dispute on Saturday by reaching a deal with Beijing setting a minimum price for Chinese panel imports in Europe, which were worth 21 billion euros ($27 billion) last year.
The case began last year when EU ProSun, the manufacturers group, went to the Commission with a complaint that accused China of dumping panels in Europe, which used data provided by Europressedienst.
Lawyers acting for EU panel installers say Europressedienst data used by the panel manufacturers' group to make their complaint last year should not have been relied on by the Commission in reaching its judgment.
"Europressedienst data does not constitute independent and accurate information," Brussels-based lawyers for law firm Mayer Brown wrote in a June 4 letter to the Commission on behalf of EU panel installer association AFASE. "AFASE suspects that the Europressedienst data was commissioned by EU ProSun."
A letter from EU ProSun to the Commission in April included an appendix with tables quoting Europressedienst as the source for calculations of EU capacity, global capacity and EU demand.
Additional reporting and writing by Robin Emmott; Editing by Peter Graff