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Antitrust: Commission fines aluminium fluoride producers € 4.97 million for price fixing cartel

Commission Européenne - IP/08/1007   25/06/2008

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IP/08/1007

Brussels, 25th June 2008

Antitrust: Commission fines aluminium fluoride producers € 4.97 million for price fixing cartel

The European Commission has imposed fines of €4 970 000 on aluminium fluoride producers for colluding to fix prices in violation of the ban on cartels and restrictive business practices in the EC Treaty (Article 81) and the EEA Agreement (Article 53). Aluminium fluoride is a chemical used to lower the smelting temperature of aluminium. It thereby reduces energy consumption in the smelting process. Fines were imposed on Fluorsid S.p.A. (Italy), Minmet Financing Company S.A. (Switzerland), Société des Industries Chimique du Fluor (Tunisia), Industrial Quimica de Mexico S.A. de C.V. and Q.B. Industrias S.A.B. de C.V. (both Mexico). During the second half of 2000, the companies agreed worldwide target prices and divided markets. The company Boliden Odda (Norway) received full immunity from fines under the Commission’s 2002 Leniency Programme (see IP/02/247 and MEMO/02/23), as they were first to provide information about the cartel.

Competition Commissioner Neelie Kroes said: "This decision shows that the Commission takes all cartels seriously. Whatever the scope of the affected market, the duration of the cartel or the size of the companies involved; there is no safe haven for those who do not play by the rules."

Aluminium fluoride is a chemical compound with the formula AlF3. Adding aluminium fluoride to the production process of primary aluminium considerably lowers the consumption of electricity required in the smelting process and thereby reduces production costs. Energy is a major cost factor in aluminium production. Aluminium producers (smelters) are the main users of aluminium fluoride.

The Commission's investigation was triggered by an application for immunity lodged by Boliden Odda in March 2005.

The cartel

The Commission's decision established that the cartel members organised a meeting that took place on 12 July 2000 in Milan where they agreed on a worldwide target price increase. They looked at various parts of the world, including Europe, to establish a general price level and, in some cases, a market division. They also exchanged commercially sensitive information. In the second half of 2000, the cartel members were in bilateral contacts with a view to monitoring implementation of the cartel arrangements agreed in Milan. The infringement lasted from 12 July 2000 to 31 December 2000.

Fines

The fines are based on the Commission's 2006 Fines Guidelines (see IP/06/857 and MEMO/06/256), in force at the time the Statement of Objections was notified to the parties.

The practices the Commission's investigation uncovered in this case constitute serious infringements of EC Treaty antitrust rules. In setting the fines, the Commission took into account the short duration of the infringement, and the relatively low level of turnover in the aluminium fluoride market as well as the fact that the companies operated on a worldwide market.

This is the first time the Commission has applied point 18 of the 2006 Fines Guidelines, providing a calculation method for cartels that are geographically wider than the European Economic Area (EEA). This is because all members of the cartel, independent of their actual sales in the EEA, contributed to the cartel insofar as it affected the EEA. Point 18 foresees that the relative shares of the cartel members' sales in the geographic area covered by the cartel are used as a basis to calculate a value of sales in the EEA for each cartel member. The purpose of this is to reflect the weight of each member in the cartel.

Boliden Odda received full immunity from fines as it was first to provide information to the Commission about the cartel.

The fines imposed and the leniency reductions granted by the Commission in this case are as follows:

Name and location of undertaking
Fine*
(€)
Reduction under the Leniency Notice
(%)
Reduction under the Leniency Notice
(€)
Boliden Odda (Norway)
0
100%
1 000 000
Fluorsid (Italy) / Minmet Financing Company (Switzerland)
1 600 000
0%
0
Société des Industries Chimique du Fluor (Tunisia)
1 700 000
0%
0
Industrial Quimica de Mexico (Mexico) / QB Industrias (Mexico)
1 670 000
0%
0
TOTAL
4 970 000


(*) 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. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision is binding proof 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 White Paper on antitrust damages actions has been published (see IP/08/515 and MEMO/08/216). More information, including a citizens' summary of the White Paper, is available at:

http://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.html

For more information on the Commission's action against cartels, see MEMO/08/433.


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