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Most cartels are about keeping sales prices high for customers. Today, we are talking about a slightly unusual cartel. The companies did not coordinate their sales prices instead they conspired to lower their purchase prices. But unusual or not, the potential harm for the market is just as serious. And what also remains the same is our commitment to fighting cartels, whatever shape they take.
So today we have decided to fine three recycling companies a total of more than 67 million euros for their participation in a cartel. The companies are Campine of Belgium, Eco-Bat Technologies of the UK, and Recylex of France. A fourth company, Johnson Controls of the United States, also took part but avoided a fine because it was the first to tell us about the cartel.
The cartel these companies had organised concerned used automotive batteries. Automotive batteries supply electric power to cars or trucks. What is less well known is that they are also the most recycled consumer product in the European Union. In fact, more than 50 million of them are recycled in the EU every year.
Recycling companies, such as the ones we are fining today, purchase used automotive batteries from scrap dealers or scrap collectors. They then process and treat these used car batteries and sell recycled lead, usually to battery manufacturers, who use it to make new car batteries.
So car batteries are an excellent example of the “circular economy” in action – where the waste from one product becomes the raw material for another. That can help us to use the world's resources more efficiently. This is why a more circular economy is a priority for the Commission.
That calls for an efficient and competitive recycling industry. But this cartel may actually have undermined competition and disrupted the price setting of used automotive car batteries.
What our investigation found is that, from 2009 to 2012, the four companies agreed to lower the prices they paid to buy scrap batteries in Germany, France, Belgium and the Netherlands.
In particular, the companies exchanged information and agreed on target prices, maximum prices and volumes to buy from suppliers. They also tried to limit the bargaining power of suppliers by exchanging information on the prices these suppliers offered or on final prices they had agreed with them.
Therefore, the basic aim was the same as in any cartel. The companies hoped to make higher profits by colluding instead of competing.
The majority of the anti-competitive contacts took place on a bilateral basis, mainly through telephone calls, emails, or text messages exchanged between senior managers. These companies knew that what they were doing was wrong and sometimes made an effort to keep the nature of their contacts secret by using code language.
In one instance, an executive tried to disguise the signalling of price levels as a comment on the weather – but it was pretty clear that the companies weren't really discussing weekly rainfall or a sudden temperature drop.
The direct victims of the cartel are the collectors and traders who sell used automotive batteries - many of which are SMEs. They may have been paid less than they would have if the market had been truly competitive.
But also more broadly, this cartel undermined the circular economy. It meant that prices were set by collusion. As a result, there was no competition on the merits or real competitive price setting for used automotive batteries.
Before I conclude, let me say a few words about the fines in this case.
It is our practice that cartel fines reflect the seriousness of the infringements, the turnover generated by the products affected by the cartels and the duration and degree of each company's participation.
When it comes to working out fines, we usually start with the amount of sales affected by the cartel. Here, since the cartel affected purchase prices, we looked at the companies' purchases instead.
But that figure was presumably lower than it would have been without the cartel holding the prices down through their collusion. So a fine based on the amount of purchases might not have been high enough to discourage future cartels. And it would have allowed the cartelists to benefit from keeping their purchase prices lower.
That's why in this case we used our powers to increase the fines by 10%.
At the same time, we continue to encourage companies to cooperate with us to uncover and investigate cartels. This was also the case in this investigation. That's why, as usual, the individual fines have been adjusted to reflect whether or not a company has chosen to provide evidence to help the Commission prove the infringements.
Preventing and punishing cartels is one of the Commission's top priorities.
All cartels undermine competition, and make our markets work less well. That happens no matter whether they fix selling prices or purchase prices. Today's fines send out a clear message that we will not tolerate cartels or anticompetitive behaviour that could damage the circular economy.