IP/07/1855

Brussels, 5 December 2007

Antitrust: Commission fines producers of chloroprene rubber € 247.6 million for market sharing and price fixing in the EEA

The European Commission has imposed a total of €  247 635 000  fines on the Bayer, Denka, DuPont, Dow, ENI and Tosoh groups for participating in a cartel for chloroprene rubber in the European Economic Area (EEA) in violation of the EC Treaty’s ban on cartels and restrictive business practices (Article 81). Between 1993 and 2002, these companies shared the market and fixed prices for chloroprene rubber, which is used for rubber components in a range of industrial products, as latex for the production of diving equipment, condoms and the inner soles of shoes and as adhesive. The fine of ENI was increased by 60% as it had been fined previously for similar behaviour. The fine of Bayer would also have been increased for the same reason, but Bayer was the first company to come forward with information about the cartel under the Commission's 2002 Leniency Notice and received full immunity from fines.

Competition Commissioner Neelie Kroes said: “It is particularly disappointing that the rubber industry has still not learned its lessons about avoiding cartels. I find it very difficult to understand how shareholders and board members can tolerate such illegal behaviour"

Chloroprene rubber is a synthetic rubber capable of elastic deformation under stress and returning to its previous size without permanent deformation. It is mainly used in the rubber industry for the production of hoses, v-belts and power transmission belts, as adhesive in the shoe and furniture industry as well as latex for the production of diving equipment, condoms and the inner soles of shoes.

The Commission investigation started with surprise inspections in March and July 2003, prompted by an application for immunity lodged by Bayer under the 2002 Leniency Notice (see IP/02/247 and MEMO/02/23).

The cartel

From at least 1993 to 2002, the producers of chloroprene rubber operated a cartel in which they agreed each other's market shares and set prices. The companies held regular meetings to discuss prices, exchange sensitive commercial information, discuss specific clients and to follow-up the implementation of their illegal agreements.

Fines

These practices constitute very serious infringements of EC Treaty antitrust rules. In setting the fines, the Commission took into account the respective affected sales of the companies involved as well as the combined market share, the geographical scope and the actual implementation of the cartel agreements. The Commission increased the fines for ENI and Bayer by 60% and 50% respectively because they had already been fined several times for cartel activities in previous Commission decisions.

The cooperation of three groups under the Commission's leniency programme was rewarded. Bayer (although a repeat offender) was granted full immunity and Tosoh and DuPont/Dow were granted a reduction of their fines of 50% and 25% respectively.

The fines in this case are based on the 2006 Guidelines on Fines (see IP/06/857 and MEMO/06/256), 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

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 and MEMO/05/489).

For more information on the Commission’s action against cartels, see MEMO/07/544.