European Commission slaps record fines on glass manufacturers for price-fixing

The European Commission has always taken a strong stance against price-fixing and cartelization, and its latest move against several glassmakers is ample demonstration of its resolve to eradicate the menace. Today the commission said that it had fined Asahi Glass, Pilkington, Saint-Gobain and Soliver a total of over €1.3 billion for price-fixing, in the car glass market. It said the fines were it's highest ever, both for an individual company - Saint-Gobain - and for a cartel as a whole.

In 2005, EU antitrust authorities raided several car glass producers across Europe following a tip-off from "an anonymous informant", the commission said in a statement. The commission claims the companies held regular discussions from 1998 through 2003 at hotels and airports in European cities to allocate sales of glass to automobile manufacturers.

''These companies cheated the car industry and car buyers for five years in a market worth 2 billion euros in the last year of the cartel, EU Competition Commissioner Neelie Kroes said in the statement. ''The overall fines are high because of the large market, the seriousness of the case, and Saint-Gobain's earlier offences.''

The French company Saint-Gobain was fined €896 million; Pilkington, a British unit of Nippon Sheet Glass, was fined €370 million; Soliver of Belgium will pay €4.396 million; and Asahi will pay €113.5 million.

The commission said that it increased the fines for Saint-Gobain by 60 per cent "because it was a repeat offender." Saint-Gobain, Pilkington and two competitors were imposed additional penalties for participating in a separate cartel to set the prices of glass used in the construction industry.

Saint-Gobain called the penalty ''excessive and disproportionate'' and plans to appeal the decision to EU courts in Luxembourg, spokeswoman Sophie Chevallon said. The fine represents about 95 per cent of annual revenue at the company's car-glass unit in Europe and the profit of ''several'' decades, she added. The French company has said it set aside €560 million to cover possible EU fines in the case.

The penalties against the four companies are the largest ever for a single cartel. The EU imposed a €992.3 million fine in February 2007 against five elevator makers for price- fixing. More recently, it had acted against nine energy companies for price-fixing. (See: European Commission fines nine energy companies €676 million for price-fixing)