MacRoberts Competition Law e-update 01/07/10
CARTEL FINED FOR "STEELING" FROM CUSTOMERS
The European Commission ("the Commission") has fined 17 steel producers across Europe a total of €518 million for their involvement in a price fixing cartel.
The Commission found that cartel members had conspired to fix the level of prices of prestressing steel and had allocated customers across the EU amongst themselves. The staggering fact however, is that the cartel had been in operation for nearly 20 years! Indeed, it only came to light when one of the companies involved approached the Commission for immunity.
Prestressing steel is a key product in the construction industry which is used to reinforce concrete for foundations, beams etc. Accordingly, the effects of this cartel will have been felt right across the EU construction industry. Its control of the market cannot be understated - indeed the Competition Commissioner, Joaquin Almunia, described the cartel as being "as if they were acting in a planned economy".
The severity and duration of the cartel is reflected in the level of the fine. Whilst the UK, Ireland and Greece appear to fall out with the cartel's direct clutches, it will no doubt have impacted on businesses based in these jurisdictions. The Commission have had cause to consider the EU steel industry in the past and this is another example of entrenched anti competitive practices in the industry.
The key point to take from this case is that the offer of immunity is a very attractive proposition for cartel members and a key weapon in the fight against cartels. This cartel of 17 members was clearly a tight group which had operated beneath the surface for almost 20 years. The promise of full immunity for the first to confess however was clearly sufficient incentive for one member to break ranks and expose the cartel. If this incentive was not available, perhaps the cartel may have continued to operate quite happily for another 20 years!
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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