Glass cartel fined € 486,9 million

11 April 2008

The european commission has handed out total fines of € 486,9 million to four flat glass manufacturers. AGC Flat Glass Europe – a subsidiary of Japan's Asahi Glass Company, Guardian, Pilkington – a subsidiary of Japan's Nippon Sheet Glass (NSG) and Saint-Gobain are said to have operated a cartel for these products, the main market for which is the construction industry, throughout the 30 country European Economic Area (EEA) from early 2004 to early 2005.

The heaviest fine, € 148 million, was given to US-Based Guardian, followed by Pilkington (€ 140 million), Saint-Gobain (€ 133,9 million) and AGC (€ 65 million). The Commission says these four command an 80% share of the EEA – the EU 27 plus Iceland, Liechtenstein and Norway – flat glass market. It found evidence that their managers used a series of meetings and other illicit contacts to agree prices, set the timing of future price rises and exchange commercial information.

Unlike other recent cartels in the construction industry, there was no 'whistle blower' company to come forward from the cartel. The Commission started the investigation under its own initiative based on information form several Member States' national competition authorities. As a result, none of the four companies had their fines reduced under leniency rules.

The Commission says the four companies' sales of flat glass in the EEA were € 1,7 billion in 2004. Under compeition guidelines introduced in June 2006, the Commission can impose fines of up to 30% of each company's turnover within the sector to which the infringement relates. The total fines of € 486,9 billion represent 28,6% of the companies flat glass sales, so are close to the maximum possible.

Commenting on the case, the Competition Commissioner Neelie Kroes said, “The Commission will not tolerate companies cheating consumers and business customers by fixing prices and depriving them of the benefits of the Single Market.”

Responses to the fines from the four companies have so far been low-key. Asahi said it was waiting for the full text of the ruling before considering whether or not to appeal. NSG simply acknowledged the preliminary ruling, while, at the time of going to press, Guardian and Saint-Gobain had not made any comment.

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