Reference:  IP/08/78    Date:  2008/1/23

Antitrust: Commission fines synthetic rubber producers Euro 34.2 million for price fixing cartel

The European Commission has imposed fines totalling Euro 34 230 000 on the Bayer and Zeon groups for fixing prices for Nitrile Butadiene Rubber (NBR) in violation of the EC Treaty's and the EEA Agreement's ban on cartels and restrictive business practices (Article 81 of the EC Treaty and Article 53 of the EEA Agreement). NBR is used mainly in car manufacturing for fuel and oil handling hoses, seals, o-rings and water handling applications. Between late 2000 and 2002, Bayer and Zeon managed to raise or otherwise stabilise prices through a series of meetings and other illicit contacts. Bayer's and Zeon's fines are reduced by 30% and 20%, respectively, because they co-operated with the investigation under the Commission's 2002 Leniency Notice (see IP/02/247 and MEMO/02/23). However Bayer's fine was increased by 50% because it had been fined for cartel activity in a previous Commission decision.

Competition Commissioner Neelie Kroes said: "This is the fourth cartel decision in the synthetic rubber industry in just over 3 years. I hope that this is the last. Buyers of synthetic rubber should be concerned about how much these cartels have cost them. And shareholders should be concerned about how much the fines have cost them."

NBR is a type of synthetic rubber consisting of a complex family of unsaturated copolymers of acrylonitrile and butadiene. Resistance to petroleum fluids, good physical properties and useful temperature range make NBR a widely used rubber, used predominantly in the motor industry.

The Commission's investigation started with surprise inspections in March 2003, prompted by an application for immunity lodged by a third company under the 2002 Leniency Notice (see IP/02/247 and MEMO/02/23). Both Bayer and Zeon co-operated with the Commission and submitted additional evidence.

The cartel

From at least 2000 to 2002, the producers of NBR operated a cartel in which they fixed prices. The companies held regular meetings to discuss prices and to coordinate price increases, to exchange sensitive commercial information and to follow-up the implementation of their illegal plans.

Fines

These practices constitute very serious infringements of EC Treaty antitrust rules. In setting the fines, the Commission took into account the respective affected sales of the companies involved as well as the combined market share, the geographical scope and the implementation of the cartel agreements. The Commission increased the fines for Bayer by 50% because it had already been fined for cartel activities in a previous Commission decision. However, the decisions adopted in recent years concerning other infringements of competition rules perpetrated by Bayer in the synthetic rubber industry did not lead to a further increase of this fine as they took place in a similar period of time and therefore are parallel infringements. The three decisions adopted by the Commission in this sector and the corresponding fines were:

The cooperation of both undertakings under the Commission's leniency programme was rewarded. Bayer and Zeon were granted a reduction of their fines of 30% and 20% respectively. In addition, Zeon benefited from a further reduction as it was the first to disclose the first period of the cartel to the Commission.

The fines in this case are based on the 2006 Guidelines on Fines (see IP/06/857 and IP/06/256), in force at the time the Statement of Objections was notified.

The fines imposed and the leniency reductions granted by the Commission in this case are as follows:

(*) Legal entities within the undertaking may be held jointly and severally liable for the whole or part of the fine imposed.

Action for damages

Any person or firm affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages, submitting elements of the published decision as evidence that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without these being reduced on account of the Commission fine. A Green Paper on private enforcement has been published (see IP/05/1634 and MEMO/05/489).

"This is the fourth cartel decision in the synthetic rubber industry in just over 3 years.

Rubber Chemicals in December 2004: Euro 75.86 million (IP/05/1656)

Synthetic Rubber BR/ESBR in November 2006: ? 519 million (IP/06/1647)

Chloroprene Rubber in December 2007: ? 243.2 million (IP/07/1855)

ゼオン/NBR/米国　刑事・民事

JANUARY 12, 2005　US　DOJ

ZEON CHEMICALS AGREES TO PLEAD GUILTY TO PRICE FIXING
IN SYNTHETIC RUBBER CONSPIRACY
Company Also Agrees To Pay A $10.5 Million Criminal Fine

Zeon Chemicals L.P., a Kentucky-based wholly owned subsidiary of Zeon Corporation of Tokyo, Japan, has agreed to plead guilty and to pay a $10.5 million criminal fine for participating in a conspiracy to fix prices of synthetic rubber used to manufacture a variety of products including automotive parts, the Department of Justice announced today.

The rubber, acrylonitrile-butadiene, which is also known as NBR, is also used to manufacture hoses, belting, cable, o-rings, seals, adhesives, and sealants.

According to the one-count felony charge filed in the U.S. District Court in San Francisco, Zeon conspired from May 2002 through December 2002 with unnamed co-conspirators to suppress and eliminate competition in the market for NBR in the United States and elsewhere. Under the plea agreement, which must be approved by the court, Zeon has agreed to assist the government in its ongoing investigation.

“Today’s charge is part of our continuing effort to eliminate illegal cartel activity among chemical manufacturers,” said Scott D. Hammond, the Antitrust Division’s Acting Deputy Assistant Attorney General for Criminal Enforcement.

The Department charged that Zeon and unnamed co-conspirators carried out the conspiracy by:
・Participating in conversations and meetings to discuss prices of NBR to be sold in the United States and elsewhere;
・Agreeing, during those conversations and meetings, to raise and maintain prices of NBR to be sold in the United States and elsewhere; and
・Issuing price announcements and price quotations in accordance with the agreements reached.

Zeon was charged with violating Section 1 of the Sherman Act, which carries a maximum fine of $10 million for corporations and a maximum penalty of three years imprisonment and a fine of $350,000 for individuals for violations occurring before June 22, 2004. The maximum statutory fine may be increased to twice the gain the conspirators derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is the result of an ongoing investigation being conducted by the Antitrust Division’s San Francisco Field Office and the Federal Bureau of Investigation in San Francisco.

2005年9月7日　日本ゼオン

NBR（アクリロニトリル・ブタジエン・ラバー）に関する損害賠償請求訴訟の和解について
http://www.zeon.co.jp/press/050907.html

　日本ゼオン（社長：古河　直純）及び当社の米国子会社ゼオン・ケミカルズ・リミテッド・パートナーシップ（米国；ケンタッキー州。以下ZCLP社）は、他の企業グループとともに、NBR（アクリロニトリル・ブタジエン・ラバー）に関する価格操作があったとして、米国においてNBRの直接購買者から損害賠償請求訴訟（民事集団訴訟）を提起されておりました。

　米国時間9月6日（日本時間9月7日）、原告側弁護団とZCLP社は、ZCLP社が原告に対して16百万米ドル（約17億円）を支払うことを内容とする和解契約に合意致しました。今後、連邦地方裁判所が和解を承認することにより、原告団から離脱（オプト･アウト opt out）手続を行わなかった原告団構成員全てとの関係において、直接購買者による損害賠償請求訴訟（民事集団訴訟）が解決されることになります。

日本ゼオンの耐油性特殊ゴムの製品別世界シェア

AP 2008/7/10

Germany's cartel watchdog to fine cosmetics, fragrance firms for price-fixing, collusion

The German antitrust watchdog said Thursday that it would fine a number of cosmetics and perfume companies for collusion and price-fixing.

The Federal Cartel Office said it would impose fines totaling nearly Euro 10 million (US$15.7 million) against companies including the German subsidiaries of Chanel, Clarins, Coty Prestige Lancaster, Estee Lauder, L'Oreal, LVMH Perfumes and cosmetics, Shiseido and YSL Beaute.

The agency said in a statement that it had found the companies shared a variety of information with each other since 1995, including on sales figures, advertising expenditures, planned product launches, prices and product returns.

The cartel office called the actions a systematic exchange between the manufacturers that restricted competition and violated German and European antitrust laws.

L'Oreal signaled that it would appeal the cartel office's decision, rejecting the office's claims that it had participated in the collusion.

Martin Ruppmann, the director of the VKE-Cosmetics Association industry group, called for more "legal certainty" regarding the language on what sort of communication between competing companies is permissible.

2008/7/11 Office of Fair Trading

OFT reaches early resolution agreements in tobacco case

Six companies have today reached early resolution agreements with the OFT in which they have admitted engaging in unlawful practices in relation to retail prices for tobacco products in the UK, and have agreed to pay individual penalties which come to a combined maximum of £173.3m before discounts.

The companies are Asda, First Quench, Gallaher, One Stop Stores (formerly named T&S Stores), Somerfield, and TM Retail.
 
Today's agreements result from a process following the OFT's Statement of Objections issued in April 2008. This set out the OFT's proposed findings that two tobacco manufacturers and eleven retailers had variously engaged in one or more unlawful practices in relation to the retail prices of a number of tobacco products in breach of the Competition Act 1998. More details of the allegations are set out in the OFT's press statement dated 25 April 2008.

The OFT has now concluded early resolution agreements with these six parties, each of which has admitted liability in respect of all of the infringements alleged against it, and each of these parties will receive a significant reduction in the financial penalty that might have otherwise been imposed on condition that it continues to provide full co-operation with the OFT.

A number of the six parties had previously applied to the OFT for leniency, and the total penalties the parties have agreed to pay if all leniency and early resolution discounts are given is £132.3m, rather than the pre-discount penalties total of £173.3m.

John Fingleton, OFT Chief Executive, said:

'The OFT's objective is to make markets work well for consumers and the economy alike. A cornerstone of this is the principle that companies should set their prices independently.

'The OFT is very pleased that the early co-operation of these parties has enabled the swift resolution of some of this case, which will significantly reduce the costs of pursuing the investigation for the OFT and the businesses concerned. This demonstrates the flexible approach the OFT is prepared to take to reduce the burden of investigations, while maintaining strong and effective competition law enforcement.'

A further company, Sainsbury's, was the first to apply to the OFT for leniency and will receive complete immunity from financial penalty if it continues to co-operate fully.

The investigation against The Co-operative Group, Imperial Tobacco, Morrisons, Safeway, Shell and Tesco is continuing. These parties have an opportunity to make representations to the OFT on its proposed findings. The OFT will consider these carefully, along with the evidence in the case as a whole, before reaching any final decision as to whether the law has been breached.

NOTES

1. Having signed the agreements today, Friday 11 July 2008, the OFT has made an announcement at the earliest opportunity following the close of the London Stock Exchange.

2. The Competition Act 1998 prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK. The Chapter I prohibition covers anti-competitive agreements and concerted practices that have the object or effect of preventing, restricting or distorting competition in the UK or a part of it and which may affect trade in the UK or a part of it.

3. In April 2008, the OFT issued a Statement of Objections, setting out its proposed findings to: Asda Stores Limited, Co-operative Group Limited, First Quench Retailing Limited (which trades under several retail brands, including Threshers), Gallaher Limited, Imperial Tobacco Limited, Wm Morrison Supermarkets plc, Safeway Stores Limited, Sainsbury's Supermarkets Limited, Shell UK Limited, Somerfield Stores Limited, T&S Stores Limited, Tesco Stores Limited and TM Retail Limited. The Statement of Objections was also sent to other companies, such as parent companies, within the same corporate group of some of the above companies where it proposed to attribute liability to them, as well as the above companies. See press release 56/08.

Imperial Tobacco owns brands such as Embassy, John Player Special and Lambert & Butler while Gallaher's best-selling products include Benson & Hedges and Silk Cut.

The Guardian, July 12, 2008

OFT fines six firms £173m for tobacco plotDavid Teather

Six companies, including the supermarket chains Asda and Somerfield and tobacco firm Gallaher, have agreed to pay a combined penalty of £173m after admitting that they colluded to set the retail price of cigarettes.

The penalties are the result of a five-year investigation by the Office of Fair Trading, which concluded in April that two manufacturers and 11 retailers had worked together to set the prices of cigarettes and rolling tobacco. It emerged yesterday that Sainsbury's brought the matter to the OFT's attention and as a result has escaped fines.

The other three to reach a settlement under the deal announced last night are First Quench, which owns the Threshers off-licence chain, convenience store group One Stop Stores and TM Retail, which owns the newsagents Martin's and McColl's.

Investigation of the Co-op, Imperial Tobacco, Morrisons, Safeway, Shell and Tesco is continuing.

The OFT alleges that the manufacturers had instructed retailers to move the prices of their products in parallel. It also alleges that the retailers were sharing information on future pricing via the suppliers.

Gallaher and Imperial together account for nine out of every 10 cigarettes sold in the UK.

A Sainsbury's spokesman said: "We are committed to acting responsibly and within the law, which is why when we identified practices on the part of a number of tobacco companies that we considered to be unlawful, we passed all relevant information to the OFT."

Japan Tobacco, which now owns Gallaher, is paying the largest fine, £93m. The company said regard for local laws was of the "utmost importance".

Oct 1, 2008　Reuters

EU fines "paraffin mafia" wax makers' cartel

The European Commission fined nine petrochemicals companies a total of 676 million euros ($955 million) on Wednesday for forming a "paraffin mafia" to fix prices and carve up markets for paraffin wax.

"There is probably not a household or company in Europe that has not bought products affected by this 'paraffin mafia' cartel, with all that implies in terms of paying over the odds, higher costs and economic damage," EU Competition Commissioner Neelie Kroes said.

Paraffin waxes are used in a wide range of products from candles to paper cups and plates, the wax coating of cheese, chemicals, tyres and chewing gum.

The biggest individual fine of 318.2 million euros was imposed on Sasol of South Africa and Germany, which the European Union executive described as the leader of the illegal cartel, an official statement said.

Anglo-Dutch oil major Shell escaped a potential fine of 96 million euros because it blew the whistle first to the EU competition authorities.

Kroes said the cartel was known inside Shell as the "paraffin mafia" and in Sasol as "Blauer Saloon" (Blue Saloon) after the hotel bar in Hamburg, Germany, where the first meetings of executives from the companies were held.

It was a very serious infringement of EU treaty antitrust rules, compounded by the duration of the cartel, she said.

It was the fourth-highest fine ever imposed by EU regulators on a sector, topped only by the record 992.3 million euros on elevator companies last year, 790.5 million on makers of vitamins in 2001 and 750.5 million on manufacturers of gas insulated switchgear in 2007.

SASOL APPEAL
Sasol, the world's biggest maker of motor fuel from coal, said it would likely appeal the ruling.

"Sasol is surprised by and does not understand the reasons for the magnitude of this fine and will be studying the reasons for the finding with a view to lodge an appeal against it," the company said in a statement.

The other companies fined were Total (128.1 million), Exxon Mobil (83.6 million euros), RWE (37.4 million), ENI (29 million), Hansen & Rosenthal (24 million), MOL (23.7 million), Repsol (19.8 million), and Tudapetrol (12 million).

Mol Nyrt., Hungary's largest oil producer
H&R Group in Germany and its sister companies are forming a worldwide sales network with refineries and specialty product plants at the service of our customers to cover their needs in products like white oils, wax emulsions, paraffin, plasticizing oils and many more.

Eni said it would appeal, adding it noted "the Commission has estimated the company's involvement ... as marginal and limited in time (2002-2005)."

The Commission said the cartel activity took place between 1992 and 2005, when it began investigating with raids on petrochemicals companies prompted by an application from Shell for leniency in return for information provided.

The companies were well aware their activity was illegal, Kroes added.

"I sincerely hope... that these high fines will encourage the management of these companies and others to look very carefully at what their staff are doing, and I hope that in turn the shareholders... will look very carefully at the management," she said.

THe Commission said individuals or companies that were victims of the cartel were entitled to seek damages in national courts of EU member states.

Sasol's penalty was increased by 50 percent because it was the cartel's leader. The fine for ENI was increased by 60 percent to 29.1 million euros because it previously took part in cartels, according to the commission.

Sasol said that as a result of its ``cooperation and support'' of the EU cartel investigations, the commission reduced the base amount of the fine by 50 percent.

2008/10/1 Sasol

Sasol Limited's response to finding by European Commission

Statement issued by Sasol Limited in response to an announcement by the European Commission regarding a finding of anti-competitive behaviour by Sasol Wax GmbH and other members of the European paraffin wax industry.

As anticipated in several previous announcements made by Sasol Limited, the European Union found that members of the European paraffin wax industry, including Sasol Wax GmbH, formed a cartel and violated antitrust laws. A fine of EUR 318 200 000 was imposed by the European Commission on Sasol Wax GmbH (of which Sasol Wax International AG, Sasol Holding in Germany GmbH and Sasol Limited would be jointly and severally be liable for EUR 250 million). The fine is payable within three months.

As a result of Sasol's co-operation and support in the investigations, the European Commission reduced the base amount of the fine by 50% to the net amount stated above.

Sasol is surprised by and does not understand the reasons for the magnitude of this fine and will be studying the reasons for the finding with a view to lodge an appeal against it.

According to the statement of objections of the European Commission an infringement of antitrust laws commenced in 1992 or even earlier. In 1995 Sasol became a co-shareholder in an existing wax business located in Hamburg, Germany owned by the Schümann group. In July 2002 Sasol acquired the remaining shares in the joint venture and became the sole shareholder of the business. Sasol Limited was unaware of these infringements before the European Commission commenced their investigation at the wax business in Hamburg in April 2005.

Sasol views this matter in a serious light and has intensified its competition and anti-trust law compliance programmes in all its businesses including joint ventures. It is Sasol's policy to comply with all applicable laws, including competition laws.