Manufacturers Fined For Price-Fixing
The European Commission (EC) announced its decision to fine four
glass manufacturing companies a total of EUR 486.9 million (approximately
USD 719.2 million) for price-fixing today.
According to a statement issued by Neelie Kroes, the European Commissioner
for Competition Policy, at a press conference held in Brussels today,
Japan-based Asahi Glass Co.ís subsidiary AGC Flat Glass Europe in
Belgium has been fined EUR 65 million (USD $96 million); Auburn
Hills, Mich.-based Guardian Industries will be fined EUR 148 million
(USD $218.6 million); Pilkington, a member of NSG Group headquartered
in the United Kingdom, is fined EUR 140 million (USD $206.8 million);
and Saint-Gobain in France is fined EUR 133.9 million (USD $197.7
"The Commission has established that in 2004 and 2005 representatives
of these companies met covertly at hotels and restaurants around
Europe. At these meetings they conspired to increase prices for
flat glass, discussing both the amount and the timing of price increases,"
Kroes said in his statement. "The companies profited from selling
flat glass at artificially inflated prices."
Peter Walters, Group vice president, notes that the company has
not yet received the full report of the EC's findings.
"We were shocked by the Commission's decision and we feel rather
strongly that the facts don't justify the outcome, at least as it
pertains to Guardian," Walters says. "When we get the findings we're
going to take some time and examine what our options are, including
According to a statement issued by AGC Flat Glass Europe, neither
that company nor its parent company has yet received the full text
of the EC decision either. Upon receipt, the companies will examine
the decision and determine accordingly their future course of action.
The company was aware of the decision prior to today's announcement.
"The European Commission conducted on-site inspections at the premises
of AGC Flat Glass Europe on February 22 and 23, 2005, and issued
a Statement of Objections to AGC Flat Glass Europe and Asahi Glass
early March, 2007. Both companies have cooperated with the Commission
during the investigation," said the statement released by the company.
Today's announcement was not a surprise to Sophie Chevallon, exterior
communications director of Saint Gobain, either.
"We knew that we would have a fine," she says. "We recognize the
facts in the case."
According to Kroes, "The fine is based on a variety of factors
set out in the Commission's 2006 Notice on Fines. The factors include
the turnover of the companies on the affected market, as well as
the duration and gravity of the infringements."
Guardian received the highest of the fines issued. Walters explains
that the EC does a "complex mathematical analysis" to determine
the amounts of the fines. "We're the smallest of the companies in
Europe, but we're the largest supplier of independent customers,"
he says. Walters says he expects that is the reason the calculation
ended up the way it did.
According to the statement from the EC, Asahi's fine was most lenient
due to "substantial cooperation under the Leniency Notice."
Chevallon notes that Saint Gobain expects another fine from the
EC either at the end of the first quarter or beginning of second
quarter 2008 regarding its auto glass division.
"The sanction could be a lot higher than this one," Chevallon says,
explaining that the period of time being investigated is longer
for the automotive glass case than it was for flat glass.
According to Walters, Guardian will not be a part of the auto glass
Pilkington has not been able to be reached for comment.
HERE to read more about this story.
HERE to read the press statement issued by the EC.
Need more info and analysis about the issues?
HERE to subscribe to AGRR magazine.