EU court ups BSAF anti-trust penalty

Issues

The EU court increased an antitrust fine against German chemicals giant BASF which was initially imposed by the European Commission in 2004 for operating an illegal vitamin cartel.

It is the first time that the Luxembourg-based European Court of First Instance, the EU's second-highest court, has raised an antitrust fine on appeal. The court fixed the total amount of the fine at €35.02 million ($51.48 million), €54,000 ($79,380) more than the original fine imposed by the Commission.

The court reduced a fine imposed on Belgium's UCB in the same case, from €10.38 million ($15.26 million) to €1.87 million ($2.75 million). The Commission, the 27-nation bloc's executive body, imposed fines on BASF, UCB and a third company Akzo Nobel of the Netherlands for price-fixing, market-sharing and concerted actions against competitors in the sector of choline chloride, or vitamin B4 used, which is used in animal feed.

BASF and UCB later appealed to the European Court of First Instance, which has the power to review antitrust decisions by the Commission. The EU court upheld an argument by BASF and UCB that there were two different cartels.

One was global and also involved four North American producers, who escaped fines because the statute of limitations on their actions had expired. The global cartel lasted between 1992 and 1994. The other was a European cartel formed by BASF, UCB and Akzo Nobel, and this lasted from 1994 to 1998. As a result, the court annulled the Commission's decision and ruled that the fines should be confined to the European cartel.

BASF had its fine increased because an earlier penalty reduction granted after it cooperated with the Commission on the global cartel was discounted in the appeal case, and the information the firm gave on the European cartel “was only of minimum value.” In view of the fact that UCB reported the European cartel, which enabled the Commission to impose significant fines, the court re-evaluated UCB's cooperation, granting the reduction. (Xinhua)

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