Brussels, 4 April 2011
CORRECTED1 Antitrust: Commission fines prestressing steel producers € 269 million for two-decades long price-fixing and market-sharing cartel
The European Commission has fined 17 producers of prestressing steel a total of € 269.872.350 for operating a cartel that lasted 18 years until 2002 and covered all but three of the then European Union Member States. The Commission decision concludes that the producers violated the European Union's ban on cartels and restrictive business practices. Prestressing steel comprises long, curled steel wires used with concrete in construction sites to make foundations, balconies or bridges.
"It is amazing how such a significant number of companies abused nearly the entire European construction market for such a long time and for such a vital product. This was almost as if they were acting in a planned economy, " said Joaquín Almunia, Commission Vice-President in charge of Competition, adding: "the Commission will have no sympathy for cartelists; recidivists will be fined more and inability-to-pay claims will be accepted only when it is clear the fine would send a company into bankruptcy, which is rare even in the current difficult times".
Today the Commission fined 17 prestressing steel producers a total of €269.872.350 for operating a price-fixing and market-sharing cartel between January 1984 and September 2002 in all the countries that then formed the EU except the United Kingdom, Ireland and Greece. It also affected Norway. The cartel stopped in 2002, when DWK/Saarstahl revealed its existence under the EU Leniency Programme introduced that year, and the Commission carried out surprise inspections at the premises of the suspected members.
During 18 years, the companies fixed individual quotas and prices, allocated clients and exchanged sensitive commercial information. In addition, they monitored price, client and quota arrangements through a system of national co-ordinators and bilateral contacts. This is in breach of Article 101 of the Treaty on the Functioning of the European Union.
The first pan-European cartel meetings were held in Zurich, Switzerland, hence the "Club Zurich" name it was initially referred to. Later it became "Club Europe". But there were also two regional branches, in Italy ("Club Italia") and in Spain/Portugal (“Club España”). The different branches were interconnected by overlapping territory, membership and common goals. The companies involved usually met in the margin of official trade meetings in hotels all over Europe. The Commission has evidence of over 550 cartel meetings.
The following table lists the total maximum amounts that each group has to pay. Within each group there may be individual companies that are each liable for part or the total amount. In total, there are 36 companies concerned.
(*) Legal entities within the undertaking may be held jointly and severally liable for the whole or part of the fine imposed.
In setting the fines, the Commission takes into account the sales of the companies involved in the market concerned in the last year prior to the end of the cartel (2001), the very serious nature of the infringement, the geographic scope of the cartel and its long duration. The Commission increased the fines for ArcelorMittal Fontaine and ArcelorMittal Wire France by 60% because they had already been fined twice for cartels in the steel sector (see IP/89/627 on wedded steel mesh and IP/94/134 on steel beams). Saarstahl was also previously fined in the steel beams cartel, but received full immunity in the present cartel because it was the first to come forward with information under the Commission's 2002 Leniency Notice.
The Commission recognised the more limited participation of Proderac and Emme Holding by reducing their fine by 5%.
Because of the very long duration of the cartel, the fines on several companies would have exceeded the legal maximum of 10% of the 2009 turnover, and was therefore reduced to this level.
In addition, the Commission granted reductions of fines for cooperation under the 2002 Leniency Notice (see IP/02/247 and MEMO 02/23) to Italcables/Antonini (50%), Nedri (25%), Emesa and Galycas (5%), ArcelorMittal and its subsidiaries (20%) and WDI/Pampus (5%). The fine for ArcelorMittal España was reduced by 15% for its co-operation outside the Leniency Notice. Redaelli and SLM did not meet the requirements for co-operation and therefore received no reduction of the fine.
Finally, the Commission accepted three inability-to-pay applications and granted reductions of respectively 25%, 50% and 75% of the fine that would otherwise have been imposed. It had received 13 such applications, under the Commission's 2006 Fines Guidelines.
When assessing a company's claim that it is unable to pay, the Commission looks at the financial statements for recent years and projections for the current and coming years; at ratios measuring the financial strength, profitability, solvency and liquidity and their relations with outside financial partners and with shareholders. The Commission also examines the social and economic context of each company and assesses whether a company's assets would be likely to lose significant value if it were to be liquidated as a result of the fine.
The Commission's investigation started with unannounced inspections in September 2002 and June 2006. A statement of objections was sent to the companies involved in October 2008 (see MEMO 09/53). Following the parties' replies to the statement of objections, the Commission dropped its investigation against one group of companies. The fines are based on the 2006 Fines Guidelines.
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:
For more information on the Commission’s action against cartels, see MEMO/10/290.
By decision of 4 April 2011 the Commission amended the fines for ArcelorMittal and OriMartin/Siderurgica Latina Martin. By decision of 30 September 2010 the Commission had already corrected errors in the calculation of the fines of ArcelorMittal, Emesa/Galycas/ArcelorMittal (Espaňa), WDI/Pampus and Rautaruukki/Ovako.