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Big fines for heat stabilizer cartel

Antitrust fines galore: The European Commission imposed €173 million in fines on 10 companies for what it says was their participation in a lengthy price-fixing scheme for heat stabilizers. The charges pertain to tin stabilizers during the years 1987-2000, and to ESBO/ester heat stabilizers between 1991-2000. The combined markets for tin stabilizers and ESBO/esters in the EEA was worth about €121 million at the time of the infringement. Two charts (below) detail the level of fines at all of the participants.

Antitrust fines galore: The European Commission imposed €173 million in fines on 10 companies for what it says was their participation in a lengthy price-fixing scheme for heat stabilizers. The charges pertain to tin stabilizers during the years 1987-2000, and to ESBO/ester heat stabilizers between 1991-2000. The combined markets for tin stabilizers and ESBO/esters in the EEA was worth about €121 million at the time of the infringement. Two charts (below) detail the level of fines at all of the participants. Processors and compounds who believe they may have been affected by the price fixing scheme may seek damages.

The charges were on 24 different business units or subsidiaries of 10 suppliers: AkzoNobel, Baerlocher, Ciba, Elementis, the former Elf Aquitaine (now Arkema France), GEA, Chemson, Faci, Reagens and AC Treuhand. The companies are charged with violating the EC Treaty's ban on cartels and restrictive business practices. Chemtura Corp. also participated in the cartel but was not fined the €20+ million fine it would have faced, because it revealed the existence of the cartels to the Commission. The actions of the companies, says the Commission, included price fixing, sharing customers, allocation of markets and exchanging sensitive commercial information. Ciba has since been acquired by BASF; AkzoNobel divested its heat stabilizers business in 2007.

Fines on Arkema France, Baerlocher and Ciba were reduced 30%, 20% and 15%, respectively, for cooperating with the Commission investigation. First, though, Arkema France's fine was increased by 90% as the company has been charged before for participation in cartels regarding polypropylene, PVC and paroxygen. A harsh statement from Neelie Kroes, competition commissioner, announced, "These companies must learn the hard way that breaking the law does not pay and that repeat offenders will face stiffer penalties. The companies' elaborate precautions to cover their tracks did not prevent the Commission from revealing the full extent of their determined efforts to rip-off their customers." The investigation began with unannounced inspections in February 2003, prompted by an immunity application lodged by Chemtura Corporation under a Leniency Notice that offers reduced or no penalty for companies that come forward before they are caught. In Chemtura's case, coming forward led to a 100% reduction and saved it more than €20million in fines it would have faced. According to the Wall Street Journal, Baerlocher's fine was reduced from about €6 million to €1 million after the supplier argued paying the larger fine would be a huge challenge; reducing a fine for such reasoning is almost unheard of.

According to the charges, between 1987 and 2000 Akzo, Baerlocher, Ciba, Elementis, Elf Aquitaine, Chemtura, Reagens and AC Treuhand (for various periods) participated in a Europe-wide tin stabilizer cartel. Between 1991 and 2000, Akzo, Ciba, Elementis, Elf Aquitaine, GEA, Chemson, Chemtura, Faci and AC Treuhand (for various periods) operated a Europe-wide ESBO/ester cartel. The principal decisions for both cartels were taken at meetings organized by AC Treuhand and held at that company's Zurich facility. The meetings took place monthly for tin stabilizers and quarterly for ESBO/esters. In addition, details on prices, customer allocation and markets were negotiated and implemented in country meetings held throughout Europe.

The fines imposed for the tin stabilizer cartel are as follows:

Reduction under the Leniency Notice (%)

Reduction under the Leniency Notice (€)

Fine* (€)

Akzo (NL)

21,800,000

Elementis (UK/US)

16,834,000

Elf Aquitaine (Arkema France) (FR)

30

4,368,000

10,046,400

Baerlocher (DE)

20

5,479,600

1,000,000

Chemtura (US)

100

15,900,000

0

Ciba (CH)

15

10,950,000

61,320,000

Reagens (IT)

10,791,000

AC Treuhand (CH)

174,000

(*) Legal entities within the undertaking may be held jointly and severally liable for the payment of the fine

The fines imposed for the ESBO/ester cartel are as follows:

Reduction under the Leniency Notice (%)

Reduction under the Leniency Notice (€)

Fine* (€)

Akzo (NL)

18,800,000

Elementis (UK/US)

15,741,000

Elf Aquitaine (Arkema France) (FR)

50

18,980,000

18,600,400

Chemson (AUS)

(GEA, ACW (DE))

3,801,600

Chemtura (US)

100

4,700,000

0

Ciba (CH)

25

2,400,000

7,104,000

Faci (IT)

5,940,000

AC Treuhand (CH)

174,000

(*) Legal entities within the undertaking may be held jointly and severally liable for the payment of the fine

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