US antitrust enforcers subpoenaed documents from the world“s five largest paint makers as part of a criminal probe into alleged price fixing in the automotive-refinishing industry.
The investigation…
US antitrust enforcers subpoenaed documents from the world“s five largest paint makers as part of a criminal probe into alleged price fixing in the automotive-refinishing industry. The investigation has been under way since January, and a federal grand jury has been convened to hear evidence. The Justice Department has subpoenaed documents from DuPont Co., Sherwin-Williams Co. and PPG Industries, Inc. in the U.S., along with BASF AG of Germany and Akzo Nobel NV of the Netherlands. Gina Talamona, a Justice Department spokeswoman, confirmed the existence of the investigation but declined to identify the individual companies. The Justice Department has at least two dozen price-fixing investigations underway in a variety of industries, and it is unclear whether any charges will result from the auto-refinishing investigation. Each of the paint makers has acknowledged the inquiry and denied any wrongdoing. Following consolidation in the refinishing industry, the five companies under investigation supply most of the paint sold to auto-body shops in the US and overseas. The companies are alleged to have met in Europe five years ago, where they conspired to fix their wholesale prices in the US, according to “Hammer and Dolly” a Washington trade magazine for the auto body-shop industry that reported the inquiry. John Ruch, a spokesman for PPG, said, “The antitrust division has initiated a grand jury investigation to determine whether there has been unlawful conduct affecting the sale of automotive-refinishing products in the U.S. during the last five years.” He said all big producers had been subpoenaed. “PPG representatives met with Justice officials and assured them of our full cooperation,” he said. “We also undertook our own investigation and have seen nothing that would indicate that any PPG people conducted themselves in an unlawful manner.” BASF, DuPont and Sherwin-Williams issued similar statements. A spokesman for Akzo Nobel said, “Akzo Nobel is involved in investigations by the antitrust authorities in the US, Canada and the European Union into alleged violations of the respective antitrust laws for some products in these jurisdictions.” BASF and Akzo Nobel have both been involved in past price-fixing cases brought by the Justice Department, which has significantly stepped up enforcement against the practice in recent years. Since 1997, the antitrust division has brought in more than US$ 1.7 billion (Euro 2.01 billion) in fines, many of them against international cartels, US officials say. The largest of these fines – the largest fine ever imposed in a criminal prosecution of any kind – was $500 million levied against Hoffmann-La Roche Ltd. in 1999, in a vitamin price-fixing cartel; the second-largest, $225 million, was imposed against BASF in the same action. Akzo Nobel pleaded guilty and paid a fine of at least US$ 10 million in a separate matter. Other cases have been brought in industries ranging from steel-making equipment to fine-art auction services.