European regulators fined Royal Dutch Shell Plc, Total SA and other companies a total of €267 million for fixing the price of a petroleum-based road surface material. Shell, whose fine was increased for being a repeat offender, received the biggest penalty at €108 million. BP Plc, which was also part of the cartel that lasted from at least 1994 to 2002, escaped a fine because of its cooperation with the investigation, the European Commission said. The fines relate to sales of bitumen, which is used to make asphalt. The commission, the European Union's regulator, can impose fines of as much as 10% of annual sales on companies found to be operating a cartel. The cartel's practices “restricted price competition and disadvantaged smaller road building companies,” the Brussels-based commission said in a statement today. Bitumen, a byproduct of processing crude oil, is used primarily in the construction industry for surfacing roads and waterproofing. More than 10,000 European companies make or lay asphalt. European asphalt production amounted to 308 million metric tons in 2004, compared with 512 million tons in the US, according to the European Asphalt Pavement Association. Total was fined €20.25 million. Other companies to be penalized include Rosmalen, Netherlands-based Heijmans NV, the third-biggest Dutch building company, Nieuwegein, Netherlands-based road builder Ballast Nedam NV and Royal BAM Group NV.
In October 2002, the commission said it investigated cartels in the bitumen industry in the Dutch, Belgian, Luxembourg and Spanish markets. National regulators have also cracked down on cartels in the construction industry. Lemminkaeinen Oyj, a Finnish construction and road-paving company, was told in March 2004 that it faced a €68 million fine by the Finnish Competition Authority for fixing the price of asphalt. Lemminkaeinen denied the charge and has asked the country's Market Court to dismiss the competition authority's fine proposal. The Finnish authority also proposed fining Skanska AB, NCC AB and five other construction companies for colluding on asphalt prices, sharing market information and setting production quotas between 1994 and 2002. In December 2004, the Swedish Competition Authority sued Nynas Group and Total $54 million for dividing customers and colluding on prices. (Bloomberg)