EU fines rubber cartel firms 243 mln euros
Wed Dec 5, 2007 11:25am EST
BRUSSELS, Dec 5 (Reuters) - Makers of chloroprene rubber on three continents were fined 243.2 million euros ($359 million) by European regulators on Wednesday for carving up markets and fixing prices over a decade, the European Commission said.
The EU executive said it imposed the fines on Italy's ENI, DuPont Co and Dow Chemical Co of the United States, and Tosoh Corp and Kanto Denka Kogyo Co of Japan for participating in a cartel.
Between 1993 and 2002 the companies shared the market and fixed prices for chloroprene rubber, used in a range of industrial products including hoses, condoms and the inner soles of shoes, a Commission statement said.
ENI had its fine hiked by 60 percent for repeat offending. It will have to pay 132.16 million euros.
Germany's Bayer AG would have faced a 201 million euro fine but instead received full immunity because it blew the whistle on the cartel, the Commission said.
DuPont was fined 59.25 million euros, of which the Commission said Dow would have to pay 48.68 million euros.
However, Dow said in a statement that DuPont had agreed three years ago to pay any such costs relating to their former joint venture, DuPont Dow Elastomers (DDE), which manufactured chloroprene rubber.
"As announced between DuPont and Dow in 2004, DuPont agreed to fund 100 percent of any potential DDE antitrust liabilities and costs up to $150 million, with DuPont also funding more than 75 percent of the excess, if any. Consequently, Dow's share of this fine against DuPont is not material as to Dow," it said.
DuPont criticised the EU executive's decision and said it would consider its options after studying the details.
"We are disappointed with today's European Commission announcement relative to fining the parent company, DuPont, in the ongoing investigation into alleged violations of EU competition law ... We feel this matter has been wrongly decided," a company statement said.
Denka was fined 47 million euros and Tosoh 4.8 million euros.
The Commission said Tosoh and DuPont/Dow were granted a reduction of their fines for providing useful information under its leniency programme.
"It is particularly disappointing that the rubber industry has still not learned its lessons about avoiding cartels. I find it very difficult to understand how shareholders and board members can tolerate such illegal behaviour," EU Competition Commissioner Neelie Kroes said.
Bayer said it regretted the violations of the past and had taken steps to change course, introducing globally binding policies in 1999, which it tightened in 2004.
"Violations of this corporate compliance programme will not be tolerated," the company said in a statement.
Chloroprene rubber is a synthetic rubber capable of elastic deformation under stress and returning to its previous size without permanent deformation.
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