Engineering News

EU court breaks new ground, raises BASF cartel fine
Wed Dec 12, 2007 8:46am EST

LUXEMBOURG, Dec 12 (Reuters) - The EU's second-highest court on Wednesday increased a cartel fine imposed by the European Commission for the first time, leaving Germany's BASF AG with a slightly higher penalty.

The chemicals group was ordered to pay 35.02 million euros ($51.35 million), up marginally from an original fine of 34.97 million euros imposed by the Commission in 2004 for its role in a cartel among producers of animal feed vitamins.

At the same time, the Court of First Instance upheld a fine for Akzo Nobel of the Netherlands of 20.99 million euros but reduced the fine for Belgian pharmaceutical group UCB to 1.87 million euros from 10.38 million euros.

The three companies formed part of a cartel that in the late 1990s controlled four-fifths of the world's 180-million-euro market for vitamin B4, the EU's executive said in 2004.

They agreed on price increases, divided up markets and allocated clients. Vitamin B4, known as choline chloride, is added to chicken and pig food to increase animal growth, reduce mortality and improve meat quality.

"We're very happy about the outcome of this case. What we made was a legal point and the court basically shared the logic of the point," said UCB lawyer Jean-Francois Bellis.

Bellis argued the Commission had erroneously combined the companies' participation in a European cartel and a separate worldwide cartel and called it a single violation.

This was important because the statute of limitations had expired on the worldwide cartel. The court agreed and recalculated the fines based only on the European cartel.

Unfortunately for BASF, the Commission had reduced its fine for co-operating with the worldwide cartel probe but had given it no reduction for the European cartel so when the court re-calculated the figures, the fine went up.

UCB had reported the European cartel to the European Commission and the court gave it credit for doing so.

Akzo's difficulty was altogether different. It never argued the legal point raised by Bellis, so the court did not take that point into consideration.

Instead, Akzo argued that the four Akzo subsidiaries which participated in the collusive arrangements should be considered separate companies with separate infringements.

The court rejected that, noting they were all units of a parent company and the legal fine limit of 10 percent of annual turnover applied to the parent company.

Akzo said its fine is covered by provisions of 177 million euros already made in its accounts, taken for several antitrust cases. It has not decided whether to appeal.

Source: Reuters

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