Brussels, 3rd October 2007
Antitrust: Commission fines bitumen suppliers € 183 million for market sharing and price coordination in Spain
The European Commission has imposed fines totalling € 183 651 000 on the groups BP, Repsol, Cepsa, Nynäs and Galp for participating in a cartel for bitumen in Spain in violation of the EC Treaty’s ban on restrictive business practices (Article 81). Between 1991 and 2002, these companies shared the market for bitumen, used for road construction, and coordinated bitumen prices. BP was the first company to come forward with information about the cartel under the Commission's 2002 Leniency Notice and received immunity from fines.
Competition Commissioner Neelie Kroes said “It is unacceptable that these companies cheated customers, public authorities and tax payers in Spain for almost 12 years by carving up the market for road-building bitumen amongst them. The Commission will not tolerate such illegal activity by companies to swindle clients and we will continue to impose stiff penalties on offenders”.
Bitumen is a by-product produced during the distillation of oil. It is mainly used for the production of asphalt, where it serves as an adhesive to bind stones together. The decision concerns bitumen used for road construction not subject to further processing, so-called penetration bitumen.
The value of the Spanish market for penetration bitumen in 2001, the last full year of the almost 12 year infringement, was approximately €286 million.
From at least 1991 to 2002, cartel members established market quotas, allocated sales volumes and customers between them, monitored the implementation of the market sharing agreements by exchanging sensitive market information, compensated each other for deviations from the market sharing agreements and agreed on the variation of bitumen prices and the moment from which the new prices would apply.
Market sharing discussions were held annually to estimate and distribute the market for the following year. Discussions on market sharing and price variations were held around a so-called "asphalt table" where cartel members participated on a bilateral or multilateral basis. Meetings were held at hotels or the companies' premises. The voluminous document which, at the end of the annual negotiations at the “asphalt table”, reflected the market sharing agreement with an allocation of volumes and customers to each participant was given the coded title “Petete” or "PTT” (named after a children's television programme).
These practices are very serious infringements of the competition rules of the EC Treaty. In setting the fines, the Commission took into account the size of the Spanish market for bitumen, the duration of the cartel and the size of the firms involved. The Commission increased the fines by 30% for Repsol and Proas (a subsidiary of Cepsa) for being leaders of the cartel.
Repsol and Cepsa were granted a reduction of their fines of 40% and 25% respectively for their cooperation under the Commission's leniency programme.
The fines in this case are based on the 1998 Guidelines on Fines, in force at the time the Statement of Objections was notified.
The fines imposed and the leniency reductions granted by the Commission in this case are as follows:
(*) Legal entities within the undertaking may be held jointly and severally liable for the whole or part of the fine imposed.
Action for damages
For more information on the Commission’s action against cartels, see MEMO/07/393.