Commission Fines Auto Glass Manufacturers for Price-Fixing
The European Commission has imposed fines, totaling 1.7 billion
U.S. dollars (1.4 billion Euros), on Asahi, Pilkington, Saint-Gobain
and Soliver for illegal market sharing and exchange of commercially
sensitive information regarding deliveries of auto glass in the
European Economic Area (EEA).
According to a statement released by the commission this morning,
between early 1998 and early 2003 these companies allegedly "discussed
target prices, market sharing and customer allocation in a series
of meetings and other illicit contacts."
Belgium-based Soliver also took part in some of these discussions,
according to the statement.
"These four companies controlled about 90 percent of the glass
used in the EEA in new cars and for original branded replacement
glass for cars at that time, a market worth about [$2.5 billion
U.S. dollars] in the last full year of the infringement," writes
Commission officials say it started the cartel investigation on
its own initiative following a tip-off from an anonymous source.
The Commission increased the fines to St. Gobain by 60 percent because
it was a repeat offender, according to the statement, and Asahi
provided additional information to help expose the infringement
and its fine was reduced by 50 percent under the Leniency Notice.
The Commission reports that these are the highest cartel fines it
has ever imposed, both for an individual company ($1.1 billion U.S.
dollars on Saint Gobain) and for a cartel as a whole.
"These companies cheated the car industry and car buyers for
five years in a market worth two billion euros in the last year
of the cartel," says competition commissioner Neelie Kroes.
"The overall fines are high because of the large market, the
seriousness of the case, and Saint-Gobain's earlier offences. The
Commission has imposed such high fines because it cannot and will
not tolerate such illegal behavior. Management and shareholders
of companies that damage consumers and European industry by running
cartels must learn their lessons the hard way-if you cheat, you
will get a heavy fine."
The Commission started this investigation on its own initiative
on the basis of reliable information provided by an anonymous informant,
officials report. The information prompted the Commission to carry
out surprise inspections in 2005 at several sites of auto glass
manufacturers in Europe.
After the inspections, Asahi Glass Co. and its European subsidiary,
AGC Flat Glass Europe (formerly 'Glaverbel), filed an application
under the 2002 Leniency Notice. Under the Leniency Notice, companies
can benefit from a reduction of up to 100 percent if they enhance
the Commission's ability to discover secret cartels. Asahi/Glaverbel
cooperated fully with the Commission and provided additional information
to help to expose the infringement and its fine was reduced by 50
Asahi, Pilkington, Saint-Gobain and Soliver had regular discussions
"with a view to allocating between themselves car glass supplies
to car manufacturers in response to their tenders and to keeping
the market shares of each individual car glass supplier as stable
as possible at the European level," the Commission reports.
The evidence uncovered by the Commission revealed several meetings
at airports and hotels in different European cities (for example
in Frankfurt, Paris and at Charles de Gaulle (Paris) and Zaventem
(Brussels) airport hotels) during which Asahi, Pilkington, Saint-Gobain
and Soliver discussed the allocation of car glass to be supplied
for upcoming car models to be produced and renegotiations of on-going
contracts, and exchanged commercially lucrative and confidential
information, according to the press release issued by the Commission.
The fines in this case are based on the "2006 Guidelines on
Fines." Under these Guidelines, fines reflect the overall economic
significance of the infringement as well as the share of each company
involved. In setting the fines, the Commission took into account
the respective affected sales of the companies involved as well
as the combined market share and the geographical scope of the cartel
The Commission increased the fines for Saint-Gobain by 60 percent
because it was a repeat offender, having already been fined for
cartel activities in previous Commission decisions in 1988 for Flat
Glass Benelux and 1984 for Flat Glass Italy.
The fines are as follows:
||Reduction under the Leniency
||Reduction under the Leniency
Notice (U.S. dollars)
||Approx. Fine (U.S. dollars)
|Asahi/AGC Flat Glass (Japan)
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