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CHEMICALS : FIVE ACRYLIC GLASS MANUFACTURERS FINED FOR RUNNING CARTEL.

The European Commission cracked down on chemicals groups Arkema, Degussa, ICI, Lucite and Quinn Barlo for cartel activity between 1997 and 2002 in the acrylic glass sector, fining the companies a total of 344,562,500 on 31 May. But repeat offenders Arkema (formerly Atofina) and ICI both had their fines doubled to 219,131,250 and 91,406,250 respectively to account for the fact that they are repeat offenders.

Arkema's steep fine accounted for a reduction given under the Commission's leniency programme because it provided useful information about the cartel. Lucite's fine was also cut (to 9,000,000) under the leniency scheme, whilst Degussa avoided a fine altogether receiving full immunity for being the first company to confess to Brussels.

Acrylic glass (polymethyl-methacrylate) is used to make car headlamps, tail-lights, dashboards and household appliances such as DVDs and bath tubs.

Degussa applied to the Commission for leniency in December 2002 and the Commission then carried out a series of raids on the companies which revealed that they had fixed and monitored prices between 1997 and 2002.

The Commission uncovered evidence that the firms' representatives had met in a Dublin hotel room in October 1999 where they fixed the European price level for acrylic glass moulding compounds. The different companies dealt with the price-fixing in their own markets: Atofina announced the price rise in France, Italy and Benelux, Degussa in Germany and Spain and ICI applied it in the UK and Scandinavia.

As they are all part of the same legal entity, French companies Total, Elf Aquitaine, Altuglas and Altumax are all jointly and severally liable for Arkema's fine.

The variety in the distribution of the fines to the different companies depending on the amount and timing of information volunteered to the EU anti-trust authorities will be scrutinised by other sectors currently under the Commission's spotlight for potential cartel activity. Most notably the energy sector is currently the subject of a huge investigatory effort. In May, the Commission carried out dawn raids on 20 sites in six member states in connection with alleged anti-competitive behaviour, and did not rule out the possibility that it suspected cartel activity. Subsequently further follow up raids were carried out in Germany this week.

The Commission is currently internally reviewing the basis on which it can offer reductions of fines to companies volunteering information under the leniency programme. At the moment, the system is relatively rigid, with the first company coming forward being the only one with the chance of obtaining full indemnity from fines in respect of the cartel. Firms in the US have more scope to barter information in exchange for indemnity.

Describing cartels as "a scourge", Competition Commissioner Neelie Kroes said she was "shocked that companies like ICI and Arkema have been fined once again".

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Publication:Europe Environment
Date:Jun 9, 2006
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