Antitrust: Commission fines flat glass producers € 486.9 million for price fixing cartel
European Commission - IP/07/1781 28/11/2007
Brussels, 28 November 2007
The European Commission has imposed fines, totalling € 486 900 000 on Asahi, Guardian, Pilkington and Saint-Gobain for coordinating price increases and other commercial conditions for deliveries of flat glass in the EEA, in violation of the EC Treaty’s and the EEA Agreement’s ban on cartels and restrictive business practices (Article 81 of the EC Treaty and Article 53 of the EEA Agreement). Flat glass is used for windows, glass doors and mirrors. Between early 2004 and early 2005, Asahi, Guardian, Pilkington and Saint-Gobain managed to raise or otherwise stabilise prices through a series of meetings and other illicit contacts. The case began on the Commission's own initiative. This is the second case in which the Commission has applied its new 2006 Guidelines (see IP/06/857 and MEMO/06/256) for the calculation of the fine (for the first case, see IP/07/1725).
Competition Commissioner Neelie Kroes said: "The Commission will not tolerate companies cheating consumers and business customers by fixing prices and depriving them of the benefits of the Single Market. Fortunately this cartel was discovered by the Commission with the help of the Member States' National Competition Authorities, in the context of the European Competition Network. This case demonstrates clearly the benefits of enhanced co-operation between the Commission and the National Competition Authorities ".
The Commission started this investigation on its own initiative on the basis of market information provided by several Member States' National Competition Authorities, showing excellent cooperation within the European Competition Network. Surprise inspections were carried out in February and March 2005 at the premises of Asahi's and Guardian’s European subsidiaries, as well as at the premises of Pilkington, Saint-Gobain and the European Association of Flat Glass Producers. In between the two rounds of inspections, Asahi and its European subsidiary Glaverbel (recently renamed “AGC Flat Glass Europe”) made an application under the 2002 Leniency Notice. They co-operated with the Commission and provided additional evidence.
The cartel concerned flat glass for use in the construction sector, which includes basic float glass, low emissivity glass (i.e. glass coated with microscopically thin metal or metallic oxide layers to improve its insulating qualities), laminated glass and unprocessed mirror glass. In 2004 these undertakings' sales to independent customers in the EEA totalled €1 700 million. The main customers of flat glass for use in the construction sector are processors, which transform this glass into finished products, such as double-glazing windows, fire-resistant glass and mirrors, all of which are commonly used in large buildings but also in private houses and apartments.
Asahi, Guardian, Pilkington and Saint-Gobain, with a combined share of at least 80% of the flat glass market in the EEA, organised several rounds of price increases, fixed minimum prices and other commercial conditions in an endeavour to raise or otherwise stabilise prices. They also monitored the implementation of the price increase agreements.
The evidence uncovered describes in detail several meetings in restaurants and hotels in different European countries during which Asahi, Guardian, Pilkington and Saint-Gobain discussed and agreed the level and timing of price increases (including which undertaking was to lead the price increase), target prices, minimum prices and/or exchanged sensitive commercial information.
This is the second Commission antitrust decision applying the 2006 Guidelines on Fines (see IP/06/857 and MEMO/06/256). Under the new method, fines better reflect the overall economic significance of the infringement as well as the share of each company involved.
(*) Legal entities within the undertaking may be held jointly and severally liable for the whole or part of the fine imposed.
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 States 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