Jason CatesInes Neidhardt

Judith LauschenskyDaniel Siliceo

Gloria Iordanov

2011Jason Cates

The European Commissions assigned the largest ever cartel fine on four car glass makers.

Saint Gobain, Pilkington, Asahi and Soliver.

The fine was in relation to illegal market sharing and exchanging commercially sensitive information.

It was found that between 1998-2003, the companies held regular meetings to allocate glass supplies and divided their market shares.

(BBC, 2008) 2011Jason Cates

Saint Gobain is a French company founded in 1665 as the glassmakers for Louis XIV.

It is a multinational group located in 46 countries and consists of over 1,000 individual companies.

Consists of three separate divisions: glass, high performance materials and housing.

(Funding Universe, 2011)

2011Jason Cates

Supplies the glass for half the cars in Europe.

Insulation for 20% of all the homes in the USA.

Glass unit accounts for 38% of company sales.

Its Housing unit accounted for 51% of sales in 2003.

(Funding Universe, 2011)

2011Jason Cates

The Pilkington Group is a glass manufacturer based in the UK.

Its parent is the NSG Group which is a Japanese company.

Prior to being acquired by NSG in 2006, it was listed on the London Stock Exchange,

(Pilkington, 2011a) 2011Jason Cates

It was founded in 1826 as a partnership.

The company was incorporated in 1894 as Pilkington Brothers Ltd.

It became a Public Limited Company in 1970 and floated on the LSE. (Pilkington, 2011c)

Pilkington had 19% of the glass market when it was bought by NSG in 2006. (Pilkington, 2011d)

(Pilkington, 2011b) 2011Jason Cates

Asahi is a Japanese glass manufacturer.

The company was founded by Toshiya Iwasaki in 1907.

Asahi was the 1st producer of sheet glass in Japan.

It is now one of the worlds largest glass manufacturers. (AGC, 2011a)

(AGC, 2011b) 2011Jason Cates

Soliver was established a glass wholesale business in 1937 as a family business.

The business was founded in Roeselare, West-Flanders.

The business is now run by the 3rd generation of the Bouckaert family.

(Soliver, 2010) 2011Jason Cates

The fine was imposed on the companies due to illegal market sharing and exchanging commercially sensitive information.

The Commission found that between 1998-2003, the cartel held regular meetings to allocate glass supplies, divide their market shares and customer allocation.

The cartel controlled 90% of the new car glass market in the European Economic Area. A market worth €2bn in 2003

(BBC, 2008) 2011Jason Cates

The cartel’s actions came into conflict with articles 53 of the EEA agreement and 81 of the EC treaty. (Now article 101)

These companies discussed target prices, market positioning and customer partitioning.

The companies turnover, market share and geographical location were contributing factors when deciding the level of fine.

(WSG, 2009) 2011Jason Cates

The EU competition commissioner Neelie Kroes stated that

“Management and shareholders of companies that damage consumers and European

industry by running cartels must learn their lessons the hard way - if you cheat, you will

get a heavy fine.”

The costs of this cartel were passed onto customers which mainly consists of car manufacturers.

The Commission then allowed victims of the cartel to seek damages which would be funded by the fines imposed on the companies involved. (SLA, 2009)

(Europa, 2010) 2011Jason Cates

The most recent previous case was on 12th November 2008.

Here, four other glass manufacturers were heavily fined by the European Commission.

The parties involved broke EU competition rules and were partakers in a market partitioning cartel.

(WSG, 2009) 2011Jason Cates

€992.3M was the previous highest fine which was imposed in 2007.

Here, the companies were operating a lift manufacturing cartel.

The largest individual fine here was imposed on Thyssenrupp and was worth €480M.

(Glass Global, 2008) 2011Jason Cates

The Commission learned of the cartel following an anonymous tip.

Following their investigation, the Commission imposed a total fine of €1.384Bn on the four companies involved.

Saint Gobain received the highest ever individual fine of €896M.

This was an increase of 60% due to Saint Gobains past involvement in such cartels.

(SLA, 2009) 2011Jason Cates

Competition Commissioner Neelie Kroes said:

“These companies cheated the car industry and car buyers for five years in a market worth €2 billion in the last year of the cartel. The overall fines are high because of the large market and seriousness of the case.” (Glass Global, 2008)

"The Commission has imposed such high fines because it cannot and will not tolerate such illegal behaviour.“

(BBC, 2008)

2011Jason Cates

(Glass Global, 2008) 2011Jason Cates

Saint Gobain received the highest ever fine on an individual company of €896M.

Saint Gobains fine increased by 60% due to its involvement in two other glass cartels.

The European Commission has the authority to impose fines of upto 10% of company turnover.

Saint Gobains €896M fine falls significantly below this level.

(SLA, 2009) 2011Jason Cates

Asahi provided information which aided the investigation.

Asahi had it’s fine halved as a result of its leniency application.

(“Under the [2002] Leniency Notice, companies can benefit from a reduction of up to 100% if they enhance the Commission's ability to discover secret cartels”) (Europa, 2008)

Soliver received a much lower fine as it only took part in some of the meetings.

(SLA, 2009) 2011Jason Cates

Asahi cooperated fully with the investigation, so it’s fine was halved. (SLA, 2009)

Saint Gobain stated it intended to appeal the Commissions decision in the court of first instance.

Saint Gobain had already set aside €560M for the payments of these fines.

This falls short of the €896M that was finally incurred.

(BBC, 2008) 2011Jason Cates

Pilkington said that the company had already made provisions of €250m for its fine.

This falls short of the actual €377m fine.

As a result, Pilkington listed the addition fines as an extraordinary item in its accounts.

(France24, 2008)

2011Jason Cates

The Commission allowed the victims of the cartel to seek damages against the companies involved. (SLA, 2009)

The Swedish car manufacturer Volvo decided to sue Pilkington over allegations of inflated prices brought about by the cartel.

Volvo issued the action in July 2010 in the High Court in London and was the first compensation case in relation to the cartel.

The German company HUK-Coburg was also considering taking legal action.

(The Telegraph, 2010)

2011Jason Cates

AGC (2011a) AGC Glass Europe, a European leader in flat glass. Available at: http://www.agc-glass.eu/English/Homepage/About-us/page.aspx/880 [Accessed: 10th Nov 2011]

AGC (2011b) Our Story. Available at: http://www.agc.com/english/company/history/index.html [Accessed: 10th Nov 2011]

BBC News (2008) Glass makers hit with huge fine. Available at: http://news.bbc.co.uk/2/hi/business/7724536.stm [Accessed: 8th Nov 2011]

Europa (2008) Antitrust: Commission fines car glass producers over €1.3 billion for market sharing cartel. Available at: http://europa.eu/rapid/pressReleasesAction.do?reference=IP%2F08%2F1685&format=HTML&aged=0&language=EN&guiLanguage=en&fb_source=message [Accessed: 8th Nov 2011]

Europa (2010) Illegal car glass cartel receives record fines. Available at: http://ec.europa.eu/unitedkingdom/press/frontpage/12a112008_en.htm [Accessed: 8th Nov 2011]

France 24 (2008) Brussels hits car glass cartel with record fine. Available at: http://www.france24.com/en/20081112-brussels-hits-car-glass-cartel-with-record-fine-eu [Accessed: 8th Nov 2011]

22 2011Jason Cates

Funding Universe (2011) Compagnie de Saint-Gobain. Available at: http://www.fundinguniverse.com/company-histories/Compagnie-de-SaintGobain-Company-History.html [Accessed: 10th Nov 2011]

Glass Global (2008) Europe hits vehicle glass cartel with record fines. Available at: http://www.glassglobal.com/news/europe_hits_vehicle_glass_cartel_with_record_fines-10705.html [Accessed: 8th Nov 2011]

Pilkington (2011a) Pilkington Company History: From a family company in 1826 to a world leader in glass in 2008. Available at: http://www.pilkington.com/pilkington-information/about+pilkington/company+history/default.htm [Accessed: 10th Nov 2011]

Pilkington (2011b) Company History - 1826 –1950. Available at: http://www.pilkington.com/pilkington-information/about+pilkington/company+history/default.htm [Accessed: 10th Nov 2011]

Pilkington (2011c) Company History 1950-1999. Available at: http://www.pilkington.com/pilkington-information/about+pilkington/company+history/default.htm [Accessed: 10th Nov 2011]

23 2011Jason Cates

Pilkington (2011d) Company History - 2000 to date. Available at: http://www.pilkington.com/pilkington-information/about+pilkington/company+history/default.htm [Accessed: 10th Nov 2011]

Soliver (2010) Company History. Available at: http://www.soliver.be/en/locations/vestigingen.html [Accessed: 10th Nov 2011]

Strategic Legal Advisor (2009) Car Glass Cartel sees record EU fines. Available at: http://www.strategiclegaladvisor.com/news-features/Car-Glass-Cartel-sees-record-EU-fines/ [Accessed: 8th Nov 2011]

Supply Management (2008) EC imposes record fine on glass cartel. Available at: http://www.supplymanagement.com/analysis/features/2008/ec-imposes-record-fine-on-glass-cartel/ [Accessed: 8th Nov 2011]

Telegraph, The (2010) Volvo sues Pilkington over 'price-fixing‘ Available at: http://www.telegraph.co.uk/finance/newsbysector/industry/7913278/Volvo-sues-Pilkington-over-price-fixing.html [Accessed: 12th Nov 2011]

World Service Group (2008) Record Fines for Car Glass Cartel. Available at: http://www.worldservicesgroup.com/publications.asp?action=article&artid=2851 [Accessed: 8th Nov 2011]

24 2011Jason Cates