Brussels, 16 December 2003
Commission fines three companies in industrial copper tubes cartel
In the fifth decision against hard-core cartels adopted this year, the European Commission has imposed a total of € 79 million in fines on Outokumpu, KME-group and Wieland Werke, the main copper tube producers in Europe. The companies have operated a cartel in the market for tubes used mainly in the air-conditioning and refrigeration (ACR) industry to the detriment of their customers and, ultimately, European businesses and households.
The Commission has conducted an investigation, started in March 2001, which shows that Outokumpu of Finland, Wieland Werke of Germany and the KME-group operated a secret cartel between May 1988 and March 2001 in the industrial copper tubes sector. The decision is addressed to the German parent company KM Europa Metal and its wholly-owned subsidiaries Tréfimétaux of France and Europa Metalli of Italy.
The tubes at stake are used mainly in the air-conditioning and refrigeration (ACR) industries. The market is worth around €290 million a year in the European Economic Area and the companies concerned account for 75-85% of the total output.
The cartel was organised within the framework of Cuproclima Quality Association for ACR Tubes established in 1985, in Switzerland, with the primary purpose of promoting a quality standard for these industrial tubes. The companies held regular price-fixing and market-sharing talks under the cover of official trade meetings organised by the Swiss-based association.
None of the companies seriously disputed the facts ascertained by the Commission and they have all co-operated in the investigation.
The cartel agreement constitutes a very serious violation of Article 81 of the EU treaty. In view of the gravity of the facts, the duration of the infringement and the relative size of the companies, the Commission has imposed the following fines:
The fine imposed on Outokumpu reflects a 50 % reduction to reward it for its early and extensive co-operation in the investigation, according to Section D of the 1996 Leniency Notice1.
Outokumpu was also rewarded for disclosing the whole duration of the cartel. However, the final fine also reflects an increase for repeated illegal behaviour: Outokumpu was already caught violating competition law in 1990 in the stainless steel cartel (see IP/90/584).
The KME-group and Wieland Werke also benefited from a reduction in their fines, but the reduction was smaller as their co-operation came late and was not entirely spontaneous.
Today's cartel decision takes the total amount of fines imposed this year to € 407.3 million. In the last three years the Commission has adopted 25 cartel decisions and imposed about € 3.2 billion in fines.
Total fines for Art 81 violations in 2003
1 A new leniency policy was adopted in February 2002, but it only applies for applications after this date (see http://ec.europa.eu/competition/antitrust/legislation/entente3_en.html#nature)