Brussels, 19th September 2007
CORRECTED1 Antitrust: Commission fines members of fasteners cartels over €303 million
The European Commission has fined YKK, Prym and Coats and four others a total of € 303 644 000 for operating cartels on the markets for fasteners and attaching machines in Europe and worldwide, in clear violation of EC Treaty rules that outlaw restrictive business practices (Article 81). The decision names five subsidiaries of the above groups, together with Scovill group, A. Raymond, Berning & Söhne and the German trade association Fachverband Verbindungs- und Befestigungstechnik, which also participated in one of the infringements. Fasteners such as zips are used, for example, in clothes and footwear, and are also used in industry. The Commission has found four separate infringements in which these companies agreed on coordinated price increases, fixed minimum prices, allocated customers, shared markets and exchanged other commercially important and confidential information. Prym group received full immunity from fines under the Commission's leniency programme in respect of the worldwide cartel on the markets for other fasteners and attaching machines, as it was the first to provide information about this cartel. In addition, the fines imposed on Prym group for its involvement in the other infringements discovered were also lowered as a result of the company's cooperation. Smaller reductions of the fines were also granted to the YKK group and the Coats group as a result of their cooperation under the Commission's leniency programme.
Competition Commissioner Neelie Kroes said: "It is unacceptable that the major fastening technology producers colluded for such a long time to maintain artificial price levels and to share customers and markets for products which are used every day by a lot of consumers. The highest management of these companies was well aware that this conduct was illegal, but decided to continue anyway."
The Commission began the investigation on its own initiative after certain information had been brought to its attention. This led to surprise inspections in November 2001 at the premises of several Community producers of hard and soft haberdashery. In turn, these inspections triggered applications from Prym group, Coats group and YKK group for immunity or reduction of fines under the Commission's leniency programme.
The evidence uncovered in the inspections showed that the companies ran illegal cartels on the markets for zip fasteners, other fasteners (e.g. snap buttons, rivets.) and their attaching machines. This was further confirmed and complemented by numerous documents and statements provided by the leniency applicants.
The first cartel, involving the YKK group, the Prym group, the Scovill group, A. Raymond, Berning & Söhne and the association VBT), ran from 1991 until at least 2001. During this period the above companies agreed among other things on coordinated price increases in annual "price rounds" with respect to 'other fasteners' and their attaching machines, in the framework of the work circles organised by the trade association VBT.
The second cartel, involving the Prym group and the YKK group, ran from 1999 until at least 2003. During this period the two leading manufacturers of fastening products in Europe fixed prices on a product-by-product and country-by-country basis and allocated customers on a worldwide level with respect to 'other fasteners' and their attaching machines.
The third cartel, involving the YKK group, the Coats group and the Prym group, ran from April 1998 to at least November 1999. During this period, the three leading manufacturers of zip fasteners met on a number of occasions to exchange price information and to discuss price increases. The three undertakings also agreed on a methodology to set minimum prices for zip fasteners in Europe.
The fourth cartel, involving the Prym group and the Coats group, was the longest infringement discovered by the Commission during this investigation and lasted for more than 21 years, from 1977 until at least 1998. During this period, the two companies agreed to share the whole haberdashery market between themselves.
The Commission has evidence that in all four cartels high-ranking management (such as managing directors, sales directors, and board members) participated in regular meetings and discussions. There is also evidence that the companies were aware that their behaviour was illegal.
These practices are very serious infringements of EC Treaty anti-trust rules. The fines take account of the size of the relevant product markets, the duration of the cartels and the size of the firms involved.
It is the Commission's practice to address its decisions to all the legal entities responsible for the illegal behaviour. In line with established case law, if the parent company within a group exercises decisive influence over the commercial behaviour of its subsidiaries, then they both form part of the same economic entity. There is a presumption that a parent company exercises decisive influence over its wholly owned subsidiary. Legal responsibility for the infringement and the related fine can be attributed to both, the subsidiary that actually participated in the cartel and the parent company or companies that exercised decisive influence over the commercial behaviour of that subsidiary at the relevant time.
Fines imposed by the Commission:
Action for damages
Any person or firm affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member State and seek damages, submitting elements of the published decision as evidence that the behaviour took place and was illegal even though the Commission has fined the companies concerned, damages may be awarded without these being reduced on account of the Commission fine. A Green Paper on private enforcement has been published (see IP/05/1634 and MEMO/05/489).
For more information on the Commission's action against cartels, see MEMO/07/364.
By decision of 31 March 2011 the Commission amended the fines for the Prym group