Competition: Commission imposes fines of €344.5 million on producers of acrylic glass for price fixing

Competition: Commission imposes fines of €344.5 million on producers of acrylic glass for price fixing
The European Commission has decided that Arkema (formerly Atofina), Degussa, ICI, Lucite and Quinn Barlo (formerly Barlo) have violated the EC Treaty rules' ban on restrictive business practices (Article 81) by participating in a cartel on the market for acrylic glass. Four of these companies (Total/Elf Aquitaine/Arkema, Lucite, ICI and Quinn Barlo) were therefore fined a total of €344,562,500. Arkema and ICI had their fines increased by 50% as they are repeat offenders. Degussa, also a repeat offender, would have been fined had it not received full immunity from fines under the Commission's leniency regime for being first to provide information about the cartel. The five companies agreed, fixed and monitored (target) prices for acrylic glass and exchanged commercially important and confidential information in the European Economic Area (EEA) between 1997 and 2002. Acrylic glass is widely used inter alia in cars, DVDs, lenses, household appliances, electronics, baths and showers.

Competition Commissioner Neelie Kroes said “Cartels are a scourge. I will ensure that cartels will continue to be tracked down, and punished. I am shocked that companies like ICI and Arkema have been fined once again. These fines will serve as a cold shower for the management and shareholders of all these companies, who have to realise that cartels cannot and will not be tolerated.”

Acrylic glass - or Polymethyl-methacrylate (PMMA) - is used for a range of applications. PMMA-moulding compounds are mainly used in the car industry for the production of headlamps, tail-lights and glass for dashboards as well as household appliances, optical media (DVDs, lenses) and electronics. PMMA-solid sheet is mainly used for illuminated advertising applications and shop interior displays. PMMA-sanitary ware is mainly used in the production of bath tubs and shower trays. These products are commonly also called acrylic glass and are best known under the trade names Plexiglas, Perspex, Acrylite, Acrylplast and Lucite.

In December 2002, Degussa applied to the Commission for immunity from fines both in this case and in the hydrogen peroxide case (see IP/06/560). Subsequently, the Commission carried out unannounced inspections which triggered applications for reduction of fines by several undertakings.

As the Quinn group only purchased Barlo after the end of the infringement, the ultimate parent company of the group (Quinn Group Ltd) is not an addressee of today's decision.

Explicit evidence

In October 1999 competitors met in a hotel room in Dublin to co-ordinate an increase in the European price level for PMMA-moulding compounds. Handwritten notes show that the participants agreed on a price increase for PMMA as of January 2000 with an announcement of the increase in November for the European market. It was agreed that Atofina would announce the increase in France, Italy and Benelux, ICI in UK and Scandinavia and Degussa in Germany and Spain.

Records of a meeting at a hotel in Germany in August 2000 reveal that the meeting focussed on a coordinated price increase for November 2000. The competitors, after exchanging details of their prices, agreed to raise the prices per kg sheets by € 0.10 and also discussed the charges for extra services like the cutting and dying of sheets.

Fines

The practices uncovered are a very serious infringement of EC Treaty rules outlawing restrictive business practices. In fixing the fines, the Commission took account of the size of the EEA market (around €665 million), the duration of the cartel and the size of the firms involved. The Commission increased the fines by 50% for Arkema and ICI as they are repeat cartel offenders.

The cooperation offered by some companies that provided important information for the exposure of the infringement was rewarded in line with the Commission's Leniency Notice (see IP/02/247 and MEMO/02/23). Degussa was granted full immunity from a fine which would otherwise have been € 264,468,750. Total/Elf Aquitaine/Arkema/Altuglas/Altumax and Lucite had their fines reduced in return for information provided to the Commission. The granting of fine reductions depends not only on the value of the information provided but also on how early it is disclosed.

The total of the fines imposed in this case of € 344,562,500 makes this the fourth largest fine ever imposed on a given cartel.

Action for damages

Any person or firm affected by anti-competitive behaviour as described in this case may seek damages before Member States' courts, submitting elements of the published Commission decision as evidence that the behaviour took place and was illegal. Damages may be awarded without being reduced on account of the Commission fine.

For more information on the Commission action against cartels, see MEMO/06/224.

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