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Brussels, 19th January 2005

Antitrust: Commission imposes € 216.91 million in fines on MCAA chemicals cartel

The European Commission has fined Akzo Nobel, Atofina (now known as Arkema) and Hoechst a total of € 216.91 for operating a cartel in the market for Monochloroacetic Acid (MCAA). MCAA is a chemical intermediate used in the manufacture of detergents, adhesives, textile auxiliaries and thickeners used in foods, pharmaceuticals and cosmetics. The level of fines confirms the Commission’s determination to crack down on companies entering into cartel arrangements. The fines on Atofina and Hoechst were increased substantially as both had previously been fined for similar illegal behaviour.

Competition Commissioner Neelie Kroes commented, “The Commission cannot and will not tolerate price fixing and market sharing. I will not allow companies to carve up the Single Market amongst themselves and so deny customers the benefits to which they are entitled. The fight against cartels is one of my top priorities and companies that engage in cartels will be fined heavily. Where companies have repeatedly violated the EU’s antitrust rules, I will keep increasing the fines as a deterrent.”

The Commission’s investigation was triggered by information brought to its attention by one of the cartel’s participants, in return for immunity under the Commission’s antitrust leniency programme The Commission found that Akzo Nobel of the Netherlands, Atofina (now Arkema) of France, Hoechst of Germany and Clariant (after it took over Hoechst’s MCAA business in 1997) of Germany and Switzerland had colluded in secret to share the market and fix prices for MCAA in the European Economic Area (EEA) in violation of EC Treaty rules that outlaw cartels and other restrictive business practices (Article 81).

Together the companies involved controlled over 90% of the EEA market for MCAA. In 1998, the last full year of the infringement, the EEA market was worth approximately €125 million.

From at least 1984 to 1999, the producers of MCAA allocated volume quotas and customers, agreed price increases, exchanged information on sales volumes and prices to monitor the cartel and agreed on a compensation mechanism to ensure implementation of the cartel arrangements. The participants met regularly and engaged in other contacts to agree and implement the activities of the cartel.

The Commission considered the infringement to be a very serious one due to its nature. In fixing the amount of the fine the Commission took account of the value of the EEA market for the product, the duration of the infringement, the individual weight of the companies in the infringement, their overall size and the fact that Atofina and Hoechst had previously been sanctioned for similar infringements.

The Commission also had regard to the cooperation given under the Commission’s Leniency Notice by some of the companies involved. Clariant received full immunity for being the first to provide evidence of the existence of the cartel to the Commission. Atofina and Akzo were granted reductions of 40% and 25% respectively for the information they provided. As a result, the Commission imposed the following fines:

-- Akzo Nobel € 84.38 m

-- Atofina € 58.5 m

-- Hoechst € 74.03 m

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