October 19, 2006, All Headline News (USA)
Bayer Has Agreed to Settle Price Fixing Case
Bayer AG agreed to pay $18 million to settle a price fixing scheme involving pumping up the price of plastic polymers. It was the second multi-million dollar settlement that Bayer has made this year.
Plastic polymers are used to make the foam rubber found in many consumer products.
This settlement, in the U.S. district court in Kansas City, was for polyester polyol based products. It came on the heels of a $55.3 million, in August in the same court, for conspiring to jack up prices of polyether polyol.
In addition to the settlements the judge required Bayer officials to cooperate in ongoing class action suits against other defendants. Those include Uniroyal Chemical Co. and Chemtura Corp., formerly known as CromptonCorp.
AP reported that court documents state that Bayer, Dow, BASF, Huntsman and Lyondell control all the markets and 75 percent of the manufacturing of polyether polyol. Polyurethane is mixed into other substances to make foam for such widely used products as furniture and automobile seats. Two years ago, federal authorities consolidated 16 cases, that had been filed across the country, against the polymer manufacturers. The cases had been brought by customers who complained that the companies had fixed the price urethane and urethane chemicals.
The problem caused one group to call for extreme measures.
In June a spokesman for a group called Coalition Against Bayer Danger (CBG) had called for jailing the executives responsible for rigging prices.
"We are talking about sums of several hundreds of millions in these cartel arrangements. It is unthinkable that decisions of this magnitude were taken without the knowledge of the Chairman. Only when the responsible directors fear custodial sentences can a deterrent effect be assumed", Philipp Mimkes of CBG said in June. Linda Young
October 18, 2006
Bayer agrees to $18 million settlement in price-fixing case
Bayer AG has agreed to pay $18 million (14.3 million) to settle claims it conspired with other manufacturers to inflate the price of certain plastics, the second multi-million-dollar settlement the company has made this year regarding its polymer operation. On Tuesday, U.S. District Judge John Lungstrum in Kansas City, Kansas, approved the settlement, which covers the company's sales of polyester polyol-based products between Jan. 1, 1998 and Dec. 31, 2004.
The agreement also requires Bayer, headquartered in Germany, to cooperate with plaintiff attorneys as they continue their class-action lawsuit against former co-defendants Uniroyal Chemical Co. and Chemtura Corp., formerly known as Crompton Corp. Lungstrum also agreed to dismiss defendants Rhein Chemie Corp. and Rhein Chemie Rheinau GmbH, subsidiaries of Lanxess Corp., which was spun off from Bayer last year.
In August, Lungstrum approved a $55.3 million (44 million) settlement by Bayer in a separate case involving the sale of polyether polyol. Bayer also agreed to help attorneys against former co-defendants BASF Corp., BASF AG, The Dow Chemical Co., Huntsman International Holdings LLC and Lyondell Chemical Co.
A Bayer spokesman provided a company statement Wednesday confirming the two settlements but declined to comment further. An attorney for the polyester plaintiffs didn't immediately return a phone call for comment.
Bayer disclosed in March that it had been subpoenaed by the Justice Department seeking information about its manufacture and sale of polyurethane products called MDI and TDI, along with other products.
Court documents say Bayer, Dow, BASF, Huntsman and Lyondell control the entire MDI and TDI markets and 75 percent of production of polyether polyol, a polyurethane material that is mixed with other substances to make foams used in furniture, automobile seats and other products.
Federal authorities two years ago consolidated 16 cases filed across the country against polymer manufacturers by customers who alleged the companies had gotten together to fix the price of urethane and urethane chemicals.
Recent cartels involving Bayer