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Antitrust: Commission action against cartels – Questions and answers

Commission Européenne - MEMO/09/323   08/07/2009

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MEMO/09/323

Brussels, 8 th July 2009

Antitrust: Commission action against cartels – Questions and answers

The most recent version of this MEMO is available at:

http://ec.europa.eu/ comm/ competition/cartels/overview/faqs_en.html

What is a cartel?

It is an illegal secret agreement concluded between competitors to fix prices, restrict supply and/or divide up markets. The agreement may take a wide variety of forms but often relates to sales prices or increases in such prices, restrictions on sales or production capacities, sharing out of product or geographic markets or customers, and collusion on the other commercial conditions for the sale of products or services.

Why are cartels harmful to consumers, businesses and to the economy in general?

Cartels shield participants from competition allowing them to charge higher prices and removing the pressure on them to improve the products they sell or find more efficient ways in which to produce them. It is the customers (companies and consumers) who foot the bill in terms of paying higher prices for lower quality and narrower choice. This not only makes consumers and businesses suffer but also adversely affects the competitiveness of the economy as a whole.

What legal basis underpins the Commission’s action to combat cartels?

Article 81 of the Treaty establishing the European Community prohibits agreements and concerted practices between firms that distort competition within the Single Market. Fines of up to 10% of their worldwide turnover may be imposed on the guilty parties.

What happens to the proceeds from fines?

The amount of the fines is paid into the Community budget. The fines therefore help to finance the European Union and reduce the tax burden on individuals.

Does the Commission have the last word?

All cartel decisions by the Commission may be appealed against before the Court of First Instance (CFI) and then before the Court of Justice of the European Communities in Luxembourg. They can, therefore, be closely scrutinised by these two courts, which are empowered to annul decisions in whole or in part and to reduce or increase fines, where this is deemed appropriate.

What is the European Commission’s leniency programme?

It encourages firms to provide the Commission with insider information on cartels. The first firm to do so is granted total immunity from fines. Other firms that follow suit may be granted a reduction in the amount of the fine. This policy is very effective in uncovering cartels but does not prevent the Commission from conducting investigations on its own initiative. For further information, see IP/06/1705 , MEMO/06/469 and MEMO/06/470 . Companies wishing to approach the Commission in order to benefit from the Commission notice on immunity from fines and reduction of fines in cartel cases should consult:

http://ec.europa.eu/comm/competition/cartels/leniency/leniency.cfm

What practical steps has the Commission taken to step up action against cartels?

Since June 2005 an entire Directorate composed of six units (Directorate G, with a staff of around 70) in the Competition Directorate General has been involved exclusively in helping the Commission to detect and punish cartels.

What action is open to consumers and companies who feel that they have been victims of such illegal agreements?

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

What are the ten largest fines imposed by the Commission in cartel cases?

By company:

Firm

Fine (euros)

Year

Saint Gobain 1 ( IP/08/1685 )

896 000 000

2008

E.ON jointly and severally with E.ON Ruhrgas ( IP/09/1099 )

553 000 000

2009

GDF Suez ( IP/09/1099 )

553 000 000

2009

ThyssenKrupp 1 ( IP/07/209 )

479 669 850

2007

Hoffmann-La Roche AG ( IP/01/1625 )

462 000 000

2001

Siemens AG 1 ( IP/07/80 )

396 562 500

2007

Pilkington 1 ( IP/08/1685 )

370 000 000

2008

Sasol Limited 1 ( IP/08/1434 )

318 200 000

2008

ENI SpA 1 ( IP/06/1647)

272 250 000

2006

Lafarge SA 3 ( IP/02/1744 )

249 600 000

2002

By sector:

Sector

Year

Total (euros)

Car Glass 1

2008

1 383 896 000

Gas

2009

1 106 000 000

Elevators and escalators 1

2007

992 312 200

Vitamins 2

2001

790 515 000

Gas insulated switchgear 1

2007

750 712 500

Paraffin waxes 1

2008

676 011 400

Synthetic rubber (BR/ESBR) 1

2006

519 050 000

Flat Glass 1

2007

486 900 000

Plasterboard 3

2002

458 520 000

Hydrogen peroxide 1

2006

388 128 000

Fines imposed on cartels by the Commission since 2003:

Year

Sector covered by cartel

Number of under-takings subject to decision

Total fine (euros)

2009

Gas ( IP/09/1099 )

2

1 106 000 000

2009

Marine Hoses 1 ( IP/09/137 )

6

131 510 000

2008

Car Glass 1 ( IP/08/1685 )

4

1 383 896 000

2008

Bananas 1 ( IP/08/1509 )

3

60 300 000

2008

Paraffin Waxes 1 ( IP/08/1434 )

10

676 011 400

2008

Aluminium fluoride 1 ( IP/08/1007 )

4

4 970 000

2008

Sodium chlorate 1 ( IP/08/917 )

4

79 070 000

2008

International Removal Services 1 ( IP/08/415 )

10

32 755 500

2008

Nitrile Butadiene Rubber ( IP/08/78 )

2

34 230 000

2007

Chloroprene Rubber 1 (IP/07/1855 )

6

247 635 000

2007

Flat glass 1 ( IP/07/1781 )

4

486 900 000

2007

Professional videotape ( IP/07/1725 )

3

74 790 000

2007

Bitumen Spain 1 ( IP/07/1438 )

5

183 651 000

2007

Hard Haberdashery: Fasteners 1 ( IP/07/1362 )

7

328 644 000

2007

Dutch beer market 1 ( IP/07/509 )

4

273 783 000

2007

Elevators and escalators 1 ( IP/07/209 )

5

992 312 200

2007

Gas insulated switchgear 1 ( IP/07/80 )

11

750 712 500

2006

Alloy surcharge (re-adoption) 2 ( IP/06/1851 )

1

3 168 000

2006

Synthetic rubber (BR/ESBR) 1 ( IP/06/1647 )

6

519 050 000

2006

Steel beams (re-adoption) 3 ( IP/06/1527 )

1

10 000 000

2006

Copper fittings 1 ( IP/06/1222 )

11

314 760 000

2006

Bitumen Netherlands 1 ( IP/06/1179 )

14

266 717 000

2006

Acrylic Glass 1 ( IP/06/698 )

5

344 562 500

2006

Hydrogen Peroxide 1 ( IP/06/560 )

9

388 128 000

2005

Rubber chemicals 2 ( IP/05/1656 )

4

75 860 000

2005

Industrial bags 1 ( IP/05/1508 )

16

290 710 000

2005

Italian tobacco 1 ( IP/05/1315 )

6

56 052 000

2005

Industrial thread 1 ( IP/05/1140 )

11

43 497 000

2005

Monochloroacetic acid 1 ( IP/05/61 )

4

216 910 000

2004

Choline chloride 3 ( IP/04/1454 )

6

57 884 000

2004

Haberdashery products: needles 3 ( IP/04/1313 )

3

47 000 000

2004

Spanish tobacco 1 ( IP/04/1256 )

9

20 038 000

2004

French beer ( IP/04/ 1153 )

2

2 500 000

2004

Sodium gluconate ( IP/01/1355 )

1

19 040 000

2004

Copper plumbing tubes 1 ( IP/04/1065 )

9

222 291 100

2003

Industrial pipes 1 ( IP/03/1746 )

3

78 730 000

2003

Organic peroxides 2 ( IP/03/1700 )

6

69 531 000

2003

Carbon and graphite products 3 ( IP/03/1651 )

6

101 440 000

2003

Sorbates 2 ( IP/03/1330 )

5

113 650 000

2003

Viandes bovines 4 ( IP/03/479 )

6

12 690 000

1 Appeal lodged before the CFI

2 Following judgment by the CFI

3 Appeal lodged before the CoJ

4 Following judgment by CoJ


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