Vice President of the European Commission responsible for Competition Policy
Statement by Commissioner Almunia on the detergent powder cartel settlement
Statement in Berlaymont press room
Brussels, 13 April 2011
Today the European Commission adopted a cartel settlement decision finding that Henkel, Procter & Gamble and Unilever operated a cartel in the market for powder detergent in Europe between 2002 and 2005. Procter and Gamble and Unilever were fined € 211.2 and € 104 million respectively. Henkel received full immunity for revealing the existence of the cartel to the Commission.
The cartel affected consumers in eight European countries that use the products regularly in their washing machines. I will not name the brands because I'm not here to advertise the companies' products, but they all feature prominently on the shelves of supermarkets and other shops.
According to our evidence, the cartel was in operation from January 2002 until March 2005 and covered Belgium, France, Germany, Greece, Italy, Portugal, Spain and the Netherlands.
The cartel came about in the context of an initiative launched by the companies through their trade association called "AISE" (the Association for soaps, detergents and other similar products in Europe) designed to reduce the weight of detergent powders as well as their boxes and bags in order to reduce packaging waste.
It is important to know, however, that the initiative at stake did not foresee or necessitate any price discussions. Henkel, Procter & Gamble and Unilever engaged in the anticompetitive practices on their own initiative and at their own risk.
They did so to ensure that none of them would use this initiative to gain competitive advantage over the others by decreasing prices and to ensure their market positions would remain the same as prior to the environmental initiative.
This is a cartel settlement because the parties acknowledged their participation in the cartel, thereby enabling the Commission to conclude the investigation from start to finish in less than three years. The fines on Procter & Gamble and Unilever include a 10% settlement reduction to reward them for this.
On top of this, the fines include a reduction of 50% for Procter and Gamble and 25% for Unilever for cooperating with the Commission at the beginning of the investigation under the Leniency programme.
This is the third cartel settlement since the settlement procedure was introduced in 2008. The previous two were in the DRAMS and animal feed cases of 2010.
The procedure enables the Commission to deal with cartel investigations more expediently whenever the companies cooperate and the case lends itself to such a procedure, freeing up resources for other investigations and increasing the deterrence of our antitrust rules.
Companies should be under no illusion, however, that the Commission will pursue its relentless fight against cartels, which are the worst violation of competition rules by extracting higher prices from consumers than they would pay when companies compete fairly and on the merits.