In another demonstration of its resolve to punish cartels, the European Commission has charged automotive glass makers with collusion and price-fixing, the commission said 23 April 2007.
Although the…
In another demonstration of its resolve to punish cartels, the European Commission has charged automotive glass makers with collusion and price-fixing, the commission said 23 April 2007. Although the commission did not name the companies involved, it said their activities affected “most of the motor vehicle manufacturers in Europe”. UK-based Pilkington Group Ltd., a unit of Nippon Sheet Glass Co., said in a statement that it had received formal charges and would study them. A spokeswoman declined further comment. Japanese firm Asahi Glass Co. said its European unit, AGC Automotive Europe SA, was notified. Regulators raided facilities of AGC Automotive Europe on 22 and 23 February 2007, the company said, adding that it will examine the allegations. Both glassmakers said they received the charges on 20 April 2007. Compagnie de Saint-Gobain SA said 23 April 2007 it also received a copy of the charges, the latest step in the EU“s two-year investigation into a cartel among autoglass manufacturers. “This is a normal stage of the procedure within the inquiry, started in February 2005, into the competitive practices of the flat-glass business for automotive markets”, the French glass maker said in a statement. The company declined further comment, and noted that this investigation is distinct from one announced 14 March 2007 which concerned flat glass for the building industry. In recent months, the commission has imposed a series of record fines on elevator makers, producers of electricity grid components and brewers. While the commission hit price-fixers with penalties totaling EUR 390.2 million in 2004 and EUR 683 million in 2005, the total increased to EUR 1.8 billion in 2006, and in the first four months of 2007 the commission has already issued penalties of over EUR 2 billion. According to the Pilkington“s website, the overall global market for flat glass was worth about USD 19 billion in 2005, about 10% of which was used in the auto industry. Pilkington reported revenue of GBP 2.6 billion in 2005-2006, about half of which came from its automotive business. A commission antitrust charge, known as a statement of objections, is a formal legal step. The companies have two months to defend themselves in writing and can request an oral hearing. There is no deadline on cartel investigations and some can continue for years before decisions are made.