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Following the recent judgment of the Court of Justice of 15 June annulling,
for procedural reasons, the Commission decision of 21 December 1988 imposing
fines on PVC producers (see IP/94/538), the Commission today decided, on a
proposal from Mr Van Miert, to readopt the same decision.

The decision concerns a secret market-sharing and price-fixing cartel in the
PVC industry during the early 1980s. All European PVC producers were involved
in a highly institutionalized scheme for increasing prices through a series of
planned initiatives.  The cartel operated a system of controlling volumes by
allocating a quota to each producer.

On 21 December 1988 the Commission imposed fines totalling ECU 23.5 million.
It has decided that the fine imposed on each firm will remain unchanged. The
decision concerns the twelve firms in respect of which the original decision
was annulled.  In the case of two firms, Solvay and Norsk Hydro, the 1988
decision is still valid inasmuch as Solvay did not bring any action and the
action brought by Norsk Hydro was held to be inadmissible as it was
time-barred.

The fines are as follows (million ecu):

1.5              BASF
0.6              DSM NV
3.2              Elf Atochem SA
2.5              Enichem SpA
1.5              Hoechst AG
2.2              Huels AG
2.5              Imperial Chemical Industries plc
0.75             Limburgse Vinyl Maatschappij NV
1.75             Montedison SpA
0.4              Société artésienne de vinyl SA
0.85             Shell International Chemical Company Ltd
1.5              Wacker Chemie GmbH

Solvay and Norsk Hydro were fined ECU 3.5 million and ECU 0.75 million
respectively.

THE PVC CARTEL

The PVC cartel is one of a number of serious infringements brought to light
and punished  by the Commission  in the 1980s in  the petrochemicals
(polypropylene, PVC and LdPE) sector.  Most of the firms covered by the
present decision (Atochem, BASF, DSM, Enichem, Hoechst, ICI, Montedison and
Shell) were also members of the other two cartels. Solvay, for its part, was
also a member of the polypropylene cartel.

The PVC cartel was set up at the end of 1980 as a "new framework" to replace
an existing market-sharing arrangement. Like other cartels uncovered by the
Commission, it was to feature (as is clear from planning documents which the
Commission's inspectors found at ICI) two levels of representation:  a
restricted "planning" group and a larger "operating" group of all producers.
Secret meetings were held each month, as a rule in Zurich, to discuss such
matters as the monitoring of quotas, arrangements for exchanging monthly data
on sales in each country, the fixing of a common "European" price, and the
price initiative machinery.

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