MacRoberts Competition Law e-update 25/06/10

COMMISSION FLUSH OUT BATHROOM CARTEL

The European Commission has fined 17 manufacturers of bathroom equipment a total of 622 million euros for engaging in an illegal price fixing cartel.

Over a twelve year period, the seventeen companies (Artweger, Cisal, Dornbracht, Duravit, Duscholux, Grohe, Hansa, Ideal Standard, Kludi, Mamoli, Masco, RAF, Roca, Sanitec, Teorema, Villeroy & Boch and Zucchetti) fixed the prices of baths, sinks, taps, and other bathroom equipment across Austria, Belgium, France, Germany, Italy and the Netherlands, harming businesses such as builders and plumbers and ultimately also consumers.

US company Ideal Standard was hit with the highest fine (326 million euros), with German company Villeroy & Boch subject to the second highest fine (71.5 million euros), whilst US company Masco was awarded financial immunity because it was the first of the seventeen companies to "blow the whistle" on the cartel.

Although the fines imposed are significant, the Commission actually reduced the fines it imposed on five of the companies involved due to their "likely inability to pay the fine given their financial situation". The EU Competition Commissioner, Joaquin Almunia, stressed that the objective of anti-cartel enforcement was not to force companies in financial difficulty out of business. Other fines, including that imposed on Ideal Standard, were reduced because of the co-operation of the companies during the investigations.

So whilst the Commission continues its crusade against anti-competitive agreements in the EU, it is perhaps showing its softer side by affording a degree of leniency to those companies hit by the financial difficulties of a global recession. That said, a fine of 326 million euros is by no means insignificant!

MacRoberts has extensive experience in dealing with cartel investigations and leniency applications. Immediate specialist help is imperative when dealing with the competition authorities to ensure that your interests are fully protected. We also offer full competition law training, compliance and audit services to help you educate your staff and comply with the rules. Compliance training is regarded favourably by the competition authorities and its cost is significantly less than any potential penalty!

For further information, please contact David Flint or John Reid on 0141 303 1100.

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