Steel Producer Cartel

EU Comission fines Steel Producer Cartel EUR 518 million

01.07.2010 | Editor: Marcel Dröttboom

The European Commission has fined a steel producer cartel EUR 518 million.

Brussels, Belgium – The European Commission has fined a steel producer cartel EUR 518 million. The 17 producers of prestressing steel operated the cartel over 18 years until 2002. With EUR 276 million the largest fine was imposed on ArcelorMittal.

The European Commission has fined the 17 producers of prestressing steel a total of EUR 518 470 750 for operating a cartel that lasted 18 years until 2002 and covered all but three of the then European Union Member States. According to a list published by the Commission, the largest fine of EUR 276 480 000 was imposed on ArcelorMittal. The Commission decision concludes that the producers violated the European Union’s ban on cartels and restrictive business practices. Prestressing steel comprises long, curled steel wires used with concrete in construction sites to make foundations, balconies or bridges. This is the fourth cartel decision since the beginning of February bringing the total amount of antitrust fines imposed so far in 2010 to EUR 1493 million.

“It is amazing how such a significant number of companies abused nearly the entire European construction market for such a long time and for such a vital product. This was almost as if they were acting in a planned economy,” said Joaquín Almunia, Commission Vice-President in charge of Competition, adding: “the Commission will have no sympathy for cartelists; recidivists will be fined more and inability-to-pay claims will be accepted only when it is clear the fine would send a company into bankruptcy, which is rare even in the current difficult times.”

According to the Commission, the price-fixing and market-sharing cartel existed between January 1984 and September 2002 in all the countries that then formed the EU except the United Kingdom, Ireland and Greece. It also affected Norway. The cartel stopped in 2002, when DWK/Saarstahl revealed its existence under the EU Leniency Programme introduced that year, and the Commission carried out surprise inspections at the premises of the suspected members.

The first pan-European cartel meetings were held in Zurich, Switzerland, hence the “Club Zurich” name it was initially referred to. Later it became “Club Europe”. But there were also two regional branches, in Italy (“Club Italia”) and in Spain/Portugal (“Club España”). The different branches were interconnected by overlapping territory, membership and common goals. The companies involved usually met in the margin of official trade meetings in hotels all over Europe. The Commission has evidence of over 550 cartel meetings. The table in Fig. 1 lists the total maximum amounts that each group has to pay. Within each group there may be individual companies thar are each liable for part or the total amount. In total, there are 36 companies concerned.

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