Brussels, 19 March 2002
Commission fines five companies in sodium gluconate cartel*(1)
The European Commission today fined Archer Daniels Midland Company Inc., Akzo Nobel N.V, Avebe B.A., Fujisawa Pharmaceutical Company Ltd. and Roquette Frères S.A. a total of € 37,13 million for fixing the price and sharing the market for sodium gluconate, a chemical mainly used to clean metal and glass, with applications such as bottle washing, utensil cleaning and paint removal. The decision comes after a thorough investigation, which established that the five companies, which together accounted for the quasi totality of the production world-wide, operated a secret cartel from 1987 until 1995.
Following an investigation which started in 1997, the European Commission has established that US company Archer Daniels Midland, Akzo Nobel and Avebe (both of the Netherlands), Fujisawa Pharmaceutical (Japan) and Roquette (France) participated in a worldwide cartel between 1987 and 1995, through which they fixed the price and shared out the market for sodium gluconate.
Sodium gluconate is a chemical mainly used to clean metal and glass, with applications such as bottle washing, utensil cleaning and surface treatment. During the infringement period, the market was worth €18 million annually in the European Economic Area the 15 EU member states plus Norway, Iceland and Liechtenstein.
The cartel started in 1987 and continued until June 1995. The companies held regular meetings, where they agreed on individual sales quotas, fixed "minimum" and "target" prices and shared out specific customers. The Commission gathered evidence on over 25 cartel meetings, held in places like Amsterdam, London, Paris, but also Hakone (Japan), Chicago, Vancouver or Zürich. Compliance with agreed sales quotas was carefully monitored, and the rule was that if a company had over-sold at the end of a given year, its sales quota for the next year would be reduced accordingly.
Part of the evidence on the cartel was provided to the Commission by the companies involved, under European Union rules providing for full or partial immunity from fines for companies that cooperate with the Commission in cartel cases. See Leniency Notice on http://ec.europa.eu/competition/antitrust/legislation/96c207_en.html.
Fujisawa got a reduction of 80% of its fine for being the first to supply decisive evidence of the cartel, before the Commission had carried out "surprise" investigations. It is the first time that the Commission grants such a large reduction. Whilst the Commission could have granted total immunity to Fujisawa in this respect, it did not do so given that Fujisawa started to cooperate only after it received a request for information from the Commission. Fujisawa's cooperation was therefore not entirely spontaneous.
The Commission characterised the companies' conduct as a very serious infringement of the competition rules and adopted a Decision under Article 81 of the EC-Treaty and Article 53 of the EEA-Agreement, imposing fines totalling €37,13 million.
Following is a list of the individual fines in million Euro:
Competition Commissioner Mario Monti said:
"This Decision is again the proof that the Commission is determined to uncover and punish hard-core cartels, which are the worst kind of violation of competition rules. The unprecedented reduction in fine for one of the companies shows that the Commission adequately rewards firms for confessing and, therefore, playing a key role in unearthing price-fixing cartels".
The Commission takes into account the gravity of antitrust violations, their duration and the existence or not of aggravating/mitigating circumstances to calculate fines. It also bears in mind the companies' share of the market concerned and their overall size. The calculation of the fines is therefore not made only in reference to the companies turnover even though the final figure cannot be higher that 10 percent of a company's total annual sales.
In the sodium gluconate cartel, the infringement was very serious, and most of the cartel participants infringed the law for more than five years. In defining the starting amounts for the fines, the Commission took into account the limited size of the sodium gluconate market.
The Commission started to investigate the case in 1997, when it learnt that some of the addressees of the present decision had been charged by the US authorities with international conspiracy in the US and elsewhere. Most of the parties to the cartel pleaded guilty and paid fines in the US and in Canada.
During Spring 1998, shortly after the Commission sent out requests for information, Fujisawa filed an application under the Leniency Notice and provided the Commission with decisive evidence of the cartel. In September 1998, « surprise » investigations were carried out. All involved companies subsequently filed an application under the Leniency Notice.
The Commission granted a reduction of 40% to both ADM and Roquette, in view of the value added of their cooperation. As for Akzo and Avebe, they did not provide to the Commission any information above and beyond that was already in its possession, but they corroborated some of that information before the Commission issued its Statement of Objections. The Commission therefore considered that only a reduction of 20% was appropriate.
(1)* This is a revised version of the original press release following the adoption of a new Commission decision on 19 March 2002 withdrawing the decision of 2 October 2001 to the extent that it was addressed and notified to one of the addressees of that earlier decision.