IP/10/790 Brussels, 23 June 2010
Antitrust: Commission fines 17 bathroom equipment manufacturers Euro 622 million in price fixing cartel
The European Commission has fined 17 bathroom equipment manufacturers a total of Euro 622,250,783 for a price fixing cartel covering six EU countries. A large number of household names are among the 17 undertakings fined: Artweger, Cisal, Dornbracht, Duravit, Duscholux, Grohe, Hansa, Ideal Standard, Kludi, Mamoli, Masco, Roca, RAF, Sanitec, Teorema, Villeroy & Boch and Zucchetti. The 12 year cartel covered ceramics such as sinks, baths, taps, and fittings. Masco received full immunity from fines under the Commission's Leniency Programme, as it was the first to provide information about the cartel. The fines of five undertakings were reduced because of their likely inability to pay the fine given their financial situation.
"These 17 companies fixed prices for baths, sinks, taps and other bathroom fittings for 12 years in six countries covering 240 million people. The cartel will have harmed businesses such as builders and plumbers and, ultimately, a large number of families. However, as the objective of anti-cartel enforcement is not to precipitate the fall of companies in financial difficulties, the Commission reduced the fines on five companies to a level they could afford. Companies should be in no doubt that the Commission will continue its fight on cartels and the level of fines will continue to be such that it should dissuade them from engaging in illegal behaviour in the first place," said Joaquín Almunia, Commission Vice President and Competition Commissioner.
The Commission decision shows that between 1992 and 2004, 17 companies coordinated the sales price for bathroom fixtures and fittings in Germany, Austria, Italy, Belgium, France and The Netherlands. The coordination took place during meetings of 13 national trade associations in Germany (over 100 meetings), Austria (over 80), Italy (65), and also Belgium, France and The Netherlands, and in bilateral contacts. It consisted of fixing price increases, minimum prices, and rebates, and exchanging sensitive business information.
The practices are very serious infringements of the EU competition rules and prohibited by Article 101 of the EU Treaty.
In setting the fines, the Commission took into account the affected sales of the companies involved, the very serious nature of the infringement and its long duration.
The fines are as follows:
|Ideal Standard (US)||30%||326,091,196|
(*) Legal entities within the undertaking may be held jointly and severally liable for the whole or part of the fine imposed.
Masco, a US company whose main subsidiaries are Hansgrohe and Hüppe, got full immunity under the Leniency Programme as it was the first to provide information about the cartel to the Commission.
The Commission also took into account the cooperation of Grohe of Germany and Ideal Standard of the US and reduced their fines by 30 %.
exceptionally, the fines of three companies were reduced by
those of another two by 25% given their difficult financial
A total of ten companies claimed they would be unable to pay a fine: to assess their claims, the Commission looked at recent financial statements, provisional current year statements and future projections, several financial ratios that measure a company's solidity, profitability, solvency and liquidity, and relations with banks and shareholders. The Commission also looked at the social and economic context of each company. Finally, the Commission assessed whether the companies' assets would be likely to lose significant value if the companies were to be forced into liquidation as a result of the fine. The analysis is company-specific and aims to be as objective and quantifiable as possible to ensure equal treatment and preserve the deterrence aspect of EU competition rules.
"The objective of anti-cartel enforcement is not to precipitate the fall of companies in financial difficulties," said Almunia.
The overall decision on who could qualify for fine reductions was taken based on several factors. The commission looks at annual financial statements, including the provisional one for the current year, ratios that look at profitability and solvency as well as the company's relationship with its banks and shareholders, Almunia said. Based on the circumstances of this case, "we believe that this fine is excessive," said Wabco's CEO Jacques Esculier. The company has strong grounds to appeal the fine although it is still waiting to see the full judgment before deciding, Esculier added.