Summary of Commission Decision of 5 December 2007 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/38.629 — Chloroprene Rubber) (Text with EEA relevance)
OJ C 251, 3.10.2008, p. 11–13 (BG, ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
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Summary of Commission Decision
of 5 December 2007
relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement
(Case COMP/38.629 — Chloroprene Rubber)
(Text with EEA relevance)
On 5 December 2007, the Commission adopted a decision relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement. On 23 June 2008, the Commission amended this decision. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003 , the Commission herewith publishes the names of the parties and the main content of the decision, including any penalties imposed, having regard to the legitimate interest of undertakings in the protection of their business secrets.
(1) The Decision was addressed to Bayer AG, E.I. DuPont de Nemours and Company, DuPont Performance Elastomers SA, DuPont Performance Elastomers LLC, The Dow Chemical Company, Denki Kagaku Kogyo KK, Denka Chemicals GmbH, Eni SpA, Polimeri Europa SpA, Tosoh Corporation, Tosoh Europe BV.
(2) The above 11 legal entities (belonging to 6 undertakings, with some legal entities held liable as parent companies), committed an infringement of Article 81 of the Treaty and Article 53 of the EEA Agreement by participating in a single and continuous infringement between 13 May 1993 and 13 May 2002 in the chloroprene rubber industry in the EEA.
(3) The infringement's main features included: competitors agreeing upon the allocation and the stabilization of markets, market shares and sales quotas for chloroprene rubber, coordinating and implementing several price increases, agreeing upon minimum prices, allocating customers, exchanging competitively sensitive information, participating in regular meetings and having other contacts to agree to the above restrictions and monitor implementation within the EEA.
2. THE CHLOROPRENE RUBBER INDUSTRY
(4) The product concerned, chloroprene rubber (hereinafter: CR), is a synthetic rubber which is an artificially-made polymer acting as an elastomer. An elastomer has the mechanical property that it can undergo much more elastic deformation under stress than most materials and still return to its previous size without permanent deformation. CR has good mechanical strength, high ozone and weather resistance, good aging resistance, low flammability, good resistance toward chemicals, moderate oil and fuel resistance and adhesion to many substrates. CR is mainly used for the production of technical rubber parts (cables, hoses, v-belts, power transmission belts etc.), for adhesives in the shoe and furniture industry (soles, heels, coated fabrics etc.) and as latex for the production of diving equipment, bitumen modifications and inner soles of shoes.
(5) The value of the EEA market for CR in 2001 was approximately EUR 160 million. The supplies of the producers addressees of the decision amounted to 100 % of the demand of the EEA market.
(6) In December 2002, Bayer informed the Commission of the existence of a cartel in the CR sector and expressed its willingness to cooperate with the Commission under the terms of the 2002 Leniency Notice. Bayer's initial submission was followed by a number of further submissions. By decision of 27 January 2003, Bayer was granted conditional immunity from fines by the Commission.
(7) On 27 March 2003, the Commission carried out an unannounced inspection at the premises of Dow Deutschland Inc. in Schwalbach which concerned the present case as well as the Commission's cases COMP/38542-EPDM, COMP/38637-BR and COMP/38638-ESBR. On 9 July 2003, an unannounced inspection was carried out at the premises of Denka in Düsseldorf.
(8) On 15 July 2003, Tosoh submitted a leniency application which was followed by several further submissions. This leniency application was followed by the one from DDE (the joint venture of DuPont and Dow) in November 2003.
(9) After having received the first request for information, Polimeri and a second subsidiary of Eni submitted leniency applications in April 2005.
(10) On 13 March 2007, the Commission initiated proceedings and adopted a Statement of Objections (SO) concerning an infringement of Article 81 of the EC Treaty and Article 53 of the EEA Agreement. All addressees of the SO submitted written comments in response to the objections raised by the Commission. An Oral Hearing was held on 21 June 2007. All parties exercised their right to be heard.
4. FUNCTIONING OF THE CARTEL
(11) The evidence in the possession of the Commission demonstrates on a solid and lasting basis that Bayer, Denka, DDE (DuPont/Dow joint venture), DuPont, Eni and Tosoh were involved in a single, complex and continuous infringement of Article 81 of the EC Treaty and of Article 53 of the EEA Agreement regarding CR.
(12) The infringement lasted from at least 13 May 1993 to 13 May 2002, covered most of the EEA territory and consisted of agreements and/or concerted practices aimed at agreeing upon the allocation and the stabilization of markets, market shares and sales quotas for chloroprene rubber, coordinating and implementing several price increases, agreeing upon minimum prices, allocating customers and exchanging competitively sensitive information.
(13) The basic objectives of the cartel arrangements were to freeze the competitors' market shares on the CR market, to regionalize production and supply, to eliminate the European price differential between Northern and Southern Europe and to increase prices or prevent a decline in prices for CR products.
(14) The Decision describes in detail the evidence found of several meetings between representatives of the undertakings involved during the period of the infringement, in which they agreed about the market shares for each CR producer in different regions of the world. Further evidence shows detailed discussions about prices and price increases in Europe and the exchange of sensitive commercial information. The agreements on market sharing and pricing were generally implemented and their implementation was closely monitored by the participants of the cartel.
5.1. Basic amount of the fine
(15) The basic amount of the fine was determined as a proportion of the value of the sales of CR made by each undertaking in the relevant geographic area during the last full business year of the infringement ("variable amount"), multiplied by the number of years of infringement, plus an additional amount, also calculated as a proportion of the value of sales, in order to deter horizontal price fixing agreements ("entry fee").
(16) The criteria that were considered in order to set out the proportions were the nature of the infringement (in this case market sharing and horizontal price-fixing), the combined market share of the undertakings participating in the infringement (100 % in this case), the geographic scope (the EEA) and implementation.
(17) Taking into account that the infringement lasted for 9 years, the variable amount was multiplied by 9 (with the exception of Dow, which entered in the agreements with the formation of the joint venture DDE in April 1996).
5.2. Adjustments to the basic amount
5.2.1. Aggravating circumstances: Recidivism
(18) At the time the infringement took place, Bayer and Eni had already been the addressees of previous Commission decisions concerning cartel activities. The fact that these undertakings have repeated the same type of conduct either in the same industry or in different sectors from that, in which they had previously incurred penalties, showed that the first penalties did not prompt these undertakings to change their conduct. This justified an increase in the basic amount to be imposed on Bayer and Eni on account of recidivism.
5.2.2. Mitigating circumstances
(19) The parties have argued for the application of a series of mitigating circumstances such as a passive or minor role in the cartel, early termination of the infringement, limited involvement in the infringement, effective co-operation outside the Leniency Notice, non-implementation of cartel agreements and coercion. These claims were all rejected in the Decision.
5.2.3. Specific increase for deterrence
(20) Accordingly and in line with previous decisions, in order to set the amount of the fine at a level which ensures that it has sufficient deterrent effect the Commission considered it appropriate to apply a multiplication factor to the fine imposed on Eni and Dow. In 2005, the most recent financial year preceding the Decision, the total turnover of Eni was EUR 86,10 billion, the total turnover of Dow was EUR 39,12 billion.
5.3. Application of the 10 % turnover limit
(21) The final individual amounts of the fines calculated prior to the application of the Leniency Notice were below 10 % of the worldwide turnovers of the addressed undertakings.
5.4. Application of the 2002 Leniency Notice: immunity and reduction of fines
(22) Bayer, Tosoh, DuPont/DDE, Polimeri and a further subsidiary of Eni co-operated with the Commission at different stages of the investigation with a view to receiving the favourable treatment set out in the 2002 Leniency Notice, applicable to the present case.
(23) Bayer was the first undertaking to inform the Commission about the existence of a cartel in the CR sector affecting the EEA market. Bayer therefore qualified for immunity.
5.4.2. Reduction of fines
(24) Tosoh was the second company to approach the Commission. Tosoh's cooperation was rewarded with a 50 % reduction of the fine.
(25) DDE (DuPont/Dow) offered its cooperation to the Commission in November 2003. Its cooperation was rewarded with a 25 % reduction of the fine.
(26) Regarding Polimeri and a second subsidiary of Eni, which submitted an application under the Leniency Notice in April 2005, the decision came to the conclusion that none of them provided significant added value within the meaning of point 21 of the 2002 Leniency Notice. Therefore the Commission did not grant these two companies a reduction of the fine.
(27) The addressees of the Decision and the duration of their involvement were as follows:
(a) Bayer AG: from 13 May 1993 to 13 May 2002;
(b) E.I. DuPont de Nemours and Company: from 13 May 1993 to 13 May 2002; DuPont Performance Elastomers SA, DuPont Performance Elastomers LLC and The Dow Chemical Company: from 1 April 1996 to 13 May 2002;
(c) Denki Kagaku Kogyo KK and Denka Chemicals GmbH: from 13 May 1993 to 13 May 2002;
(d) Eni SpA and Polimeri Europa SpA: from 13 May 1993 to 13 May 2002;
(e) Tosoh Corporation and Tosoh Europe BV: from 13 May 1993 to 13 May 2002.
(28) Following the above recitals, the following fines were imposed:
(a)Bayer AG | EUR 0 |
(b)E.I. DuPont de Nemours and Company | EUR 59250000 |
of which jointly and severally with: | |
(i)DuPont Performance Elastomers SA | EUR 44250000 |
(ii)DuPont Performance Elastomers LLC | EUR 44250000 |
(iii)The Dow Chemical Company | EUR 44250000 |
(c)Denki Kagaku Kogyo KK and Denka Chemicals GmbH, jointly and severally | EUR 47000000 |
(d)Eni SpA and Polimeri Europa SpA, jointly and severally | EUR 132160000 |
(e)Tosoh Corporation and Tosoh Europe BV, jointly and severally | EUR 4800000 |
(f)The Dow Chemical Company | EUR 4425000 |
(29) The undertakings listed in recital (27) were ordered to bring to an end immediately the infringement referred to in recital (3), in so far as they had not already done so and to refrain from repeating any act or conduct described in recital (3), and from any act or conduct having an identical or similar object or effect.
 OJ L 1, 4.1.2003, p. 1.