EC fines lead cartel which used coded language to fix scrap prices
The European Commission yesterday (February 8) fined lead recycling firms Recyclex, Campine and Ecobat Technologies a total of €67.6 million ($72.4 million) for forming a cartel to fix the prices of scrap car batteries, breaching EU antitrust rules.
The collusion was carried out via telephone calls, emails and text messages, and coded language was used to signal different price levels, the EC said.
“Some contacts also took place in person, either in bilateral meetings or, less frequently, in multilateral meetings. The parties were well aware of the illegal character of their contacts and sometimes tried to disguise them by using coded language, for example referring to weather conditions to signal different price levels,” the EC said.
Between 2009 and 2012 the three companies and a fourth, Johnson Controls, “colluded to reduce the purchase price paid to mainly small and medium-sized scrap dealers and collectors for used car batteries” in Belgium, France, Germany and the Netherlands, the EC said in a statement.
“By coordinating to lower the prices they paid for scrap batteries, the four companies disrupted the normal functioning of the market and prevented competition on price,” it said.
Johnson Controls escaped a fine — it would have been liable for €38.48 million — because it informed the EC about the cartel in June 2012, the EC statement said.
The following September inspections were carried out at several premises and in June 2015 the EC began legal proceedings, which culminated yesterday in the fines.
Ecobat, in the UK, received the heaviest fine, just under €32.7 million, and said it was “reviewing the decision and has not yet determined whether it will appeal any aspects to the General Court of the European Union”.
However the firm did say in an official statement that it had already made provision for the fine, which would be borne by its German and French subsidiaries Berzelius Metall GmbH and Société de traitement chimique des métaux SAS.
Under the EU’s so-called “leniency notice”— whereby cooperation with the Commission’s investigations is rewarded with a discounted fine — Ecobat’s penalty was halved. It could otherwise have been liable for €65.4 million.
France-based Recyclex, which was fined €26.7 million, suspended its stock in response to the news. The EC said it had been granted a 30% discount for its cooperation.
“We can’t comment on the decision for the time being because we are still waiting for the formal notification of the decision,” communications director Gabriel Zeitlin told BESB. “As soon as we receive it we will analyse it and try to understand what the financial consequences will be.”
Belgian firm Campine, which also suspended trading, was fined the least amount, €8.16 million.
Although it said that the penalty should not have an impact on the short term continuity, it said it was “in complete disagreement with the decision and will undertake immediate action to appeal against this decision in front of the General Court of Luxembourg”.
“Throughout the investigation, Campine has co-operated with the European Commission in a transparent, professional and comprehensive manner at any time,” the firm said.
The EC said, however, that “its application for leniency was rejected as the Commission found that the company had not disclosed its participation in the infringement”.
Margrethe Vestager, the commissioner in charge of competition policy at the EC, said: “Well functioning markets can help us reduce waste and support the circular economy. Therefore we do not tolerate behaviour that undermines competition. The four companies fined today have colluded to maximize their profits made from recycling scrap batteries, reducing competition in this essential link of the recycling chain.”
Under the EC’s 2006 Guidelines on Fines, the EC used the value of purchases rather than sales to set the level of fines.
“As those figures were presumably artificially lowered precisely because of the cartel behaviour, this was likely to result in a level of fines below the economic significance of the infringement,” it said.
“Therefore, in order to avoid under-deterrence, the Commission used its discretion under the Guidelines on Fines to increase the amount of the fine for all parties by 10%.”
At the same time Campine’s fine was then reduced by 5% as it had played a more minor role that the other cartel participants.