First ‘hybrid’ decision by the European Commission in a cartel case
On July 20th 2010, the European Commission has concluded its first settlement of a cartel case in a hybrid scenario, where both the settlement and ordinary procedures were followed. It has fined producers of animal feed phosphates a total of €175 647 000 for operating a cartel that lasted over thirty years. Animal feed phosphates are chemical compounds used in feed for animals such as cattle, pigs, poultry, fish and pets. All companies except one settled the case with the Commission and received a 10% reduction each over their fine.
Today the Commission imposed a fine totalling €175 647 000 in its first “hybrid” cartel case. It, therefore, adopted two decisions: a streamlined settlement decision for those undertakings which have agreed to settle and admitted their participation in the cartel and, on the other hand, a standard decision for one company which decided not to settle and for which the ordinary procedure was followed.
The Commission was first informed about the cartel in 2003 by Kemira, one of the participants that applied for leniency. Its’ decision of 20/7/10 establishes that the cartel existed from as early as March 1969 until February 2004, although not all producers were involved for the entire period. The cartel members operated a market-sharing and price-fixing cartel covering most of the EU and subsequently also a great part of the EEA territory. To this end, they allocated market shares, feed phosphates sales quotas and customers among themselves, and coordinated prices and sales conditions when necessary. Such coordination is by its very nature one of the most serious violations of Article 101 of the Treaty on the Functioning of the EU.
The cartel arrangements, known as the ‘Club’, CEPA (Centre d’Etude des Phosphates Alimentaires) or later Super CEPA, proved to be resilient and able to adapt to different industry and market conditions over the years. Throughout the whole period, the undertakings had frequent contacts and met regularly to coordinate through price monitoring and market sharing agreements at both European and country levels. Settlement proceedings, based on Commission Regulation (EC) No 622/2008 of 30 June 2008, were initiated with all undertakings. After the Commission had informed the parties of the fines ranges, one company, Timab Industries S.A./Compagnie Financière et de Participation Roullier, decided to discontinue the settlement proceedings, becoming the only party in the ordinary procedure. As foreseen in point 32 of the Commission Settlement Notice of 2 July 2008, the fine for all addressees of the settlement decision is reduced by 10%.
Source: European Commission
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