01/30/2014

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EU Commission fines Vita, Carpenter, Recticel, and Eurofoam EUR 114 million in cartel settlement

The cartel covered comfort foam and specific types of flexible foam. The companies colluded to coordinate the sales prices of various types of foam for nearly five years, from October 2005 until July 2010, in ten EU member states (Austria, Belgium, Estonia, France, Germany, Hungary, the Netherlands, Poland, Romania and the UK). Vita was not fined as it benefited from immunity under the Commission's 2006 Leniency Notice for revealing the existence of the cartel to the Commission. Eurofoam (a joint venture between Recticel and Greiner Holding AG), Recticel and Greiner received reductions of their fines for their cooperation in the investigation under the Commission's leniency programme. Since all companies agreed to settle the case with the Commission, their fines were further reduced by 10 %. European Commission Vice President in charge of competition policy, Joaquín Almunia, said: "Cartels harm our entire economy and cannot be tolerated. This case illustrates how essential it is to keep fighting and sanctioning such illegal behaviour: here the cartelised product is both a key component of the furniture bought by all citizens, such as mattresses and sofas, and a significant input for certain businesses, for example car makers". The aim of the cartel was to pass on raw material price increases of bulk chemicals to customers and avoid aggressive price competition between the four producers. In order to achieve this goal, the cartelists organised price coordination meetings at all levels of European management. The participants met on the margins of European and national associations and had numerous telephone and other bilateral contacts. The cartel operated for almost five years, from October 2005 until July 2010. Fines The total fines imposed are as follows:   Reduction under the Leniency Notice Reduction under the Settlement Notice Fine / EUR Vita 100 % 10 % 0 Carpenter   10 % 75,009,000 Recticel (for its own participation) 50 % 10 % 7,442,000 For the conduct of Eurofoam: - Eurofoam, Recticel and Greiner - Greiner and Recticel - Recticel       50 %       10 %     14,819,000   9,364,000 7,443,000 Total 114,077,000 This means that in total Eurofoam is liable for up to EUR 14,819,000, Greiner for up to EUR 24,183,000, and Recticel (both for its own involvement and that of Eurofoam) for up to EUR 39,068,000. Vita received full immunity for revealing the existence of the cartel and thereby avoided a fine of EUR 61.7 million for its participation in the infringement. Recticel, Eurofoam and Greiner benefited from reductions of fines of 50 % under the 2006 Leniency Notice for their cooperation. The reductions reflect the timing of their cooperation and the extent to which the evidence they provided helped the Commission to prove the existence of the cartel. Moreover, under the Commission's 2008 Settlement Notice, the Commission reduced the fines imposed on all the companies by 10 % as they acknowledged their participation in the cartel and their liability in this respect. The responsibility of Carpenter was established by the direct participation in the conduct of Carpenter's European subsidiaries while Carpenter Co was considered liable only as their parent company.According to the Commission, any person or firm affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision is binding proof that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without these being reduced on account of the Commission fine.

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