The Times, November 29, 2006
Rubber barons' fine bounces EU to record antitrust take
The European Commission has taken a record 1.843 billion (£1.24 billion) in antitrust fines so far this year after imposing a 519 million penalty yesterday on five groups of companies for operating a synthetic rubber cartel.
With at least one more major anti-competition decision to be taken this year, the Commission's clampdown on illegal cartels looks set to top 2 billion for 2006, overtaking the previous record of 1.837 billion set in 2001. The total does not include separate action for abuses of dominant position - the Commission's charge against Microsoft over its Windows operating system.
The penalties, which are paid into the European Union budget, demonstrate the determination of Neelie Kroes, the Competition Commissioner, to tackle illegal behaviour. "Cartels strike at the heart of healthy economic activity," Ms Kroes said. "They undermine competition, raise prices for consumers and reduce the diversity, quality and innovation of European companies."
The fines are the second-highest that the Commission has levied in a cartel case. They were imposed on Bayer, of Germany, Dow, of the United States, Eni, of Italy, Shell, of the Netherlands, Unipetrol, of the Czech Republic, and Trade-Stomil, of Poland, for price- fixing and sharing customers between 1996 and 2002 in a synthetic rubber market worth 550 million a year. Their products are used by customers such as Michelin, Pirelli and Goodyear to make tyres, shoe soles and golf balls. The inquiry was launched after Bayer contacted the Commission at the end of 2002, applying for leniency and offering information on the arrangements. Inspectors found that cartel agreements were made after meetings of the European Synthetic Rubber Association.
"During these meetings the participants agreed prices and exchanged information on key customers and the amounts of synthetic rubber supplied to them," the Commission said. It also noted that any person or firm affected by the anti-competitive behaviour could apply to national courts for damages.
Under the Commission's leniency programme, Bayer received full immunity from the 204,187,500 fine that it would have had to pay. Dow also co-operated, cutting its fine by 40 per cent. Penalties on Eni and Shell were increased by 50 per cent because they were repeat offenders.