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Record Fines for Car Glass Cartel 

Published: February, 2009

Submission: April, 2009

 



The European Commission has once again showed that violations of the competition rules can be very expensive for companies. On 12 November, the European Commission fined four car glass manufacturers over SEK 13 billion for a market partitioning cartel.


The European Commission ordered Asahi, Pilkington, Saint-Gobain and Soliver to pay a total of EUR 1 383 896 000 for prohibited market partitioning and exchange of commercially sensitive information concerning the supply of car glass within the EEA in conflict with Article 81 EC and Article 53 in the EEA Agreement. Asahi, Pilkington and Saint-Gobain are the three largest car glass manufacturers in Europe. Between 1998 and 2003, these companies discussed target prices, market partitioning and customer partitioning at a number of meetings and other prohibited contacts. The Belgian company Soliver also participated in some of these discussions. Together, the four companies controlled approx. 90 per cent. of the glass used within the EEA for new cars and for branded replacement glass; a market worth approx. EUR 2 billion in 2002.


At its own initiative, the European Commission commenced the cartel investigation after a tip from an anonymous source. The tip led to the European Commission carrying out dawn raids in 2005 at several car glass manufacturers in Europe. After the dawn raid, the Japanese company Asahi Glass Co. and its European subsidiary AGC Flat Glass Europe (formerly Glaverbel) submitted an application for a reduction of the administrative fine to the European Commission. Thereafter, Asahi/Glaverbel co-operated fully with the European Commission and assisted with additional information in order to help prove the violation.


The European Commission found that Asahi, Pilkington, Saint-Gobain and Soliver met on a regular basis to divide the supply of car glass based on the car manufactures’ procurements and to maintain their respective market shares on a European level. Among the evidence which the European Commission identified were documents showing that the companies had held a number of meetings at airports and hotels in various cities around Europe. In these meetings, the companies discussed how they would allocate the supply of car glass for forthcoming car models and when renegotiating on-going contracts. It was also deemed to have been shown that other commercially sensitive information had been exchanged at these meetings.


The fines in question are the highest ever ordered by the European Commission, both regarding a cartel as such and for an individual cartel member; Saint-Gobain was ordered to pay the grand sum of EUR 896 000 000.


In determining the fines, the European Commission deemed that the cartel constituted a serious violation of the EC competition rules. The European Commission considered the sales figures of the different companies as well as the companies’ joint market share and the geographic scope of the cartel.


Saint-Gobain was fined 60 per cent. higher fines because the company had been found guilty in "flat glass cartels" several times previously – 2007 (see Delphi News, December 2007), 1988 and 1984. Asahi/AGC Flat Glass was ordered to pay EUR 113 500 000 which was a reduction of 50 per cent. while the British company Pilkington had to pay EUR 370 000 000 and the Belgian company Soliver was ordered to pay EUR 4 396 000.


Companies which consider they have suffered a loss due to the cartel at hand may initiate damages actions against the companies in question, which thus may be ordered to pay damages in addition to the fines.


Elisabeth Legnerfält, competition law specialist


 


 

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