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Commission fines seven companies in specialty graphites cartels

Commission Européenne - IP/02/1906   17/12/2002

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IP/02/1906

Brussels, 17 December 2002

Commission fines seven companies in specialty graphites cartels

The European Commission today fined seven companies a total of € 60.6 million for participating in two price-fixing cartels in the market for specialty graphites, which are used to make industrial tools for the aerospace, electronics and other industries.

The investigation begun in the spring of 1999 during the graphite electrodes cartel probe (see IP/01/1010), when GraphTech (formerly known as UCAR) revealed information about anti-competitive practices also in the neighbour market of specialty graphite products in return for immunity under the Commission's 1996 Leniency policy.

On the basis of this information, the Commission opened a new investigation in March 2000, which was concluded today with the finding that eight companies participated in a worldwide cartel between 1993 and 1998, through which they fixed the price for isostatic specialty graphite products, exchanged sensitive commercial information and occasionally shared out the market.

The eight are : SGL Carbon AG of Germany, Carbone-Lorraine S.A. of France, Japanese firms Ibiden Co. Ltd., Tokai Carbon Co. Ltd, Toyo Tanso Co. Ltd. and Nippon Steel Chemical Co. Ltd, US company GrafTech International, Ltd. and Dutch company Intech EDM B.V.

SGL and GrafTech were also found to have participated in a parallel price-fixing cartel for extruded graphite products.

"Specialty graphites" describe a group of graphite products for diverse applications. Isostatic graphite (produced through isostatic moulding), is used in EDM electrodes, continuous casting dies, hot press moulds and semiconductor applications; extruded graphite (produced through extrusion), is used in electrolytic anodes and cathodes, boats, sintering trays, crucibles.

During the infringement period, the companies concerned accounted for most of the EEA-wide market for both products.

The isostatic cartel began with a "Top Level meeting" in Gotenba (near Tokyo) in Japan, on 23 July 1993, where the major producers agreed the basic operating principles of the worldwide market. A monitoring and enforcement scheme was set up, which entailed the holding of regular multilateral meetings from top-executive level (always in Japan) to regional and national executive's level. The cartel functioned for a period of more than four and a half years until 1998.

A meeting in Paris on 24-25 February 1993 also marked the beginning of the price collusion behaviour between UCAR and SGL in the market of unmachined extruded specialty. Throughout the duration of the cartel, the parties regularly discussed prices, including who would announce what price on which date. These arrangements went on for more than three and a half years.

In each case the companies' conduct was a very serious infringement of the competition rules, as set out in Article 81 of the European Union Treaty.

Individual amounts of the fines (in € million):

  • SGL: 27.75 (18.94 for isostatic graphite and 8.81 for extruded graphite)

  • Toyo Tanso: 10.79

  • Carbone-Lorraine: 6.97

  • Tokai Carbon: 6.97

  • Ibiden: 3.58

  • Nippon Steel Chemical: 3.58

  • Intech: 0.98

For three of the companies: SGL, Tokai Carbon and GraphTech this was the second infringement to be uncovered by the Commission after the graphite electrodes decision of 2001. However, as the infringements were contemporaneous the Commission took the view that this did not qualify as recidivist behaviour and did not increase the fine for SGL and Tokai Carbon. GraphTech was granted full immunity because it revealed the cartel to the Commission.

The fine on SGL, however, reflects an increase of 50% on the basic amount calculated by the Commission because it was the ringleader in the isostatic cartel. But it also includes a 35% reduction for co-operating in the investigation before the Statement of Objections (SO) was sent.

LCL, Ibiden, Tokai, Toyo Tanso and Nippon Steel Chemical also got a reduction of 35 % as they provided additional information before the SO was sent.

In the case of Intech, the Commission established that it had acted to a considerable extend under instructions from Ibiden, for which it is the main distributor in Europe, and this justified a reduction of 40% in its basic amount. It benefited of a further reduction of 10% for not contesting the facts.

The companies have three months in which to pay the fines.

Background

To calculate the fines in cartel decisions, the Commission takes account of the gravity of the infringement, its duration and the existence of any aggravating or mitigating circumstances. It also takes account of a company's share of the market concerned and of its overall size to ensure that the punishment is proportional and is sufficiently deterrent. The calculation is therefore not made solely with reference to a company's turnover, although the fine can never go beyond 10 percent of a company's total annual turnover, as set out in Regulation 17/62.

Once the amount has been determined, the fines may be reduced to take account of the companies' cooperation in the investigation, in line with the Commission's policy regarding the non-imposition or reduction of fines in cartel cases ('Leniency policy'). Although a new leniency notice was adopted in February 2002, the 1996 notice is applicable because the cooperation took place before February 2002. For further details on the new 2002 notice, see

http://europa.eu.int/comm/competition/antitrust/leniency


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