12/12/2007
A European court has adjusted fines levied by Europe's competition authority against two companies and upheld a fine on Dutch firm Akzo Nobel NV (00913.AE) for participating in an animal feed additive cartel.
The Court of First Instance reduced a fine on Belgian drugs company UCB SA (UCB.BT) by EUR8.51 million to EUR1.87 million; and raised a fine on Germany's BASF AG (BASFY: BASFY ) by EUR54,000 to EUR35 million, the first time the court has ever raised a cartel fine.
The court upheld a EUR20.99 million fine on Akzo Nobel.
The European Commission imposed fines amounting to EUR66.34 million on the three companies in 2004 for taking part in price-fixing, market sharing and other anti-competitive practices in the choline chloride market.
The court's decision not just to upheld BASF's fine but to actually increase it, is very interesting, said the commission's antitrust spokesman Jonathan Todd. "Obviously the commission will take this into account very carefully in setting future fines," he added.
The additive, choline chloride, often referred to as vitamin B4, is mixed with feed for poultry and pigs, to increase growth, health and meat quality.
The commission found four North American producers had also participated in the cartel but these had ended their participation five years before the commission launched its investigation and so were not fined.
The commission said the cartel controlled 80% of the EUR180 million worldwide market and the EUR50 million European Economic Area market for choline choride.
The firms appealed the fines to the Court of First Instance, Europe's second-highest court.
Lawyers for BASF and UCB argued that the commission should have treated the cartel as two separate cartels: one involving the North Americans from 1992 to 1994, the second from 1994 to 1998. This would mean that the European firms couldn't be fined for their pre-1994 behavior.
The court accepted the arguments and recalculated the fines accordingly.
It reduced UCB's fine to reflect the fact that UCB reported the European cartel, but recalculated BASF's fine at a slightly higher level.
It threw out an appeal by Akzo Nobel to have the commission's decision against it annulled. Akzo Nobel had argued the commission should not have fined Akzo's corporate holding group, but instead should have considered the four subsidiaries involved in the cartel separately.
