Summary of Commission Decision of 5 December 2007 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/38.629 — Chloroprene Rubber) (Text with EEA relevance)
Date: 2007-12-05
Institutions: European Commission
Subjects: competition law, fine, market-sharing agreement, price agreement, price increase, restriction on competition, synthetic rubber

3.10.2008

EN

Official Journal of the European Union

C 251/11

Summary of Commission Decision

of 5 December 2007

relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement

(Case COMP/38.629 — Chloroprene Rubber)

(Text with EEA relevance)

(2008/C 251/07)

On 5 December 2007, the Commission adopted a decision relating to a proceeding under Article 81 of the EC Treaty
and Article 53 of the EEA Agreement. On 23 June 2008, the Commission amended this decision. In accordance with
the provisions of Article 30 of Council Regulation (EC) No 1/2003 (1), the Commission herewith publishes the names
of the parties and the main content of the decision, including any penalties imposed, having regard to the legitimate
interest of undertakings in the protection of their business secrets.

1. INTRODUCTION

(1) The Decision was addressed to Bayer AG, E.I. DuPont de
Nemours and Company, DuPont Performance Elastomers
SA, DuPont Performance Elastomers LLC, The Dow
Chemical Company, Denki Kagaku Kogyo KK, Denka
Chemicals GmbH, Eni SpA, Polimeri Europa SpA, Tosoh
Corporation, Tosoh Europe BV.

(2) The above 11 legal entities (belonging to 6 undertakings,
with some legal entities held liable as parent companies),
committed an infringement of Article 81 of the Treaty and
Article 53 of the EEA Agreement by participating in a
single and continuous infringement between 13 May 1993
and 13 May 2002 in the chloroprene rubber industry in
the EEA.

(3) The infringement's main features included: competitors
agreeing upon the allocation and the stabilization of
markets, market shares and sales quotas for chloroprene
rubber,
coordinating and implementing several price
increases, agreeing upon minimum prices, allocating custo-
mers,
information,
participating in regular meetings and having other contacts
to agree to the above restrictions and monitor implemen-
tation within the EEA.

exchanging competitively sensitive

2. THE CHLOROPRENE RUBBER INDUSTRY

(4) The product concerned, chloroprene rubber (hereinafter:
CR),
is a synthetic rubber which is an artificially-made
polymer acting as an elastomer. An elastomer has the
mechanical property that
it can undergo much more
elastic deformation under stress than most materials and
size without permanent
still
deformation. CR has good mechanical
strength, high
ozone and weather resistance, good aging resistance, low
flammability, good resistance toward chemicals, moderate
oil and fuel resistance and adhesion to many substrates.

return to its previous

(1) OJ L 1, 4.1.2003, p. 1.

CR is mainly used for the production of technical rubber
parts (cables, hoses, v-belts, power transmission belts etc.),
for adhesives in the shoe and furniture industry (soles,
heels, coated fabrics etc.) and as latex for the production of
diving equipment, bitumen modifications and inner soles
of shoes.

(5) The value of the EEA market for CR in 2001 was approxi-
mately EUR 160 million. The supplies of the producers
addressees of
the
demand of the EEA market.

the decision amounted to 100 % of

3. PROCEDURE

(6)

In December 2002, Bayer informed the Commission of
the existence of a cartel in the CR sector and expressed its
willingness to cooperate with the Commission under the
terms of the 2002 Leniency Notice. Bayer's initial submis-
sion was followed by a number of further submissions. By
decision of 27 January 2003, Bayer was granted condi-
tional immunity from fines by the Commission.

(7) On 27 March 2003, the Commission carried out an unan-
nounced inspection at the premises of Dow Deutschland
Inc. in Schwalbach which concerned the present case as
well as
the Commission's cases COMP/38542-EPDM,
COMP/38637-BR and COMP/38638-ESBR. On 9 July
2003, an unannounced inspection was carried out at the
premises of Denka in Düsseldorf.

(8) On 15 July 2003, Tosoh submitted a leniency application
which was followed by several further submissions. This
leniency application was followed by the one from DDE
(the joint venture of DuPont and Dow)
in November
2003.

(9) After having received the first request for information,
Polimeri and a second subsidiary of Eni submitted leniency
applications in April 2005.

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Official Journal of the European Union

3.10.2008

(10) On 13 March 2007, the Commission initiated proceedings
and adopted a Statement of Objections (SO) concerning an
infringement of Article 81 of the EC Treaty and Article 53
of the EEA Agreement. All addressees of the SO submitted
written comments in response to the objections raised by
the Commission. An Oral Hearing was held on 21 June
2007. All parties exercised their right to be heard.

(16) The criteria that were considered in order to set out the
proportions were the nature of the infringement (in this
case market
the
combined market share of the undertakings participating
in the infringement (100 % in this case), the geographic
scope (the EEA) and implementation.

sharing and horizontal price-fixing),

4. FUNCTIONING OF THE CARTEL

(11) The evidence in the possession of the Commission demon-
strates on a solid and lasting basis that Bayer, Denka, DDE
(DuPont/Dow joint venture), DuPont, Eni and Tosoh were
involved in a single, complex and continuous infringement
of Article 81 of the EC Treaty and of Article 53 of the
EEA Agreement regarding CR.

(12) The infringement lasted from at least 13 May 1993 to
13 May 2002, covered most of the EEA territory and
consisted of agreements and/or concerted practices aimed
at agreeing upon the allocation and the stabilization of
markets, market shares and sales quotas for chloroprene
coordinating and implementing several price
rubber,
increases, agreeing upon minimum prices, allocating custo-
mers and exchanging competitively sensitive information.

(13) The basic objectives of the cartel arrangements were to
freeze the competitors' market shares on the CR market, to
regionalize production and supply,
the
European
and
Southern Europe and to increase prices or prevent a
decline in prices for CR products.

to eliminate
between Northern

differential

price

in different

(14) The Decision describes in detail the evidence found of
several meetings between representatives of the undertak-
ings involved during the period of the infringement,
in
which they agreed about the market shares for each CR
producer
the world. Further
regions of
evidence shows detailed discussions about prices and price
increases in Europe and the exchange of sensitive commer-
cial information. The agreements on market sharing and
pricing were generally implemented and their implementa-
tion was closely monitored by the participants of
the
cartel.

5. REMEDIES

5.1. Basic amount of the fine

(17) Taking into account

lasted for
9 years, the variable amount was multiplied by 9 (with the
exception of Dow, which entered in the agreements with
the formation of the joint venture DDE in April 1996).

the infringement

that

5.2. Adjustments to the basic amount

5.2.1. Aggravating circumstances: Recidivism

(18) At the time the infringement took place, Bayer and Eni
had already been the addressees of previous Commission
decisions concerning cartel activities. The fact that these
undertakings have repeated the same type of conduct
either in the same industry or in different sectors from
in which they had previously incurred penalties,
that,
showed that the first penalties did not prompt these under-
takings to change their conduct. This justified an increase
in the basic amount to be imposed on Bayer and Eni on
account of recidivism.

5.2.2. Mitigating circumstances

(19) The parties have argued for the application of a series of
mitigating circumstances such as a passive or minor role
in the cartel, early termination of the infringement, limited
in the infringement, effective co-operation
involvement
outside the Leniency Notice, non-implementation of cartel
agreements and coercion. These claims were all rejected in
the Decision.

5.2.3. Specific increase for deterrence

(20) Accordingly and in line with previous decisions, in order
to set the amount of the fine at a level which ensures that
it has sufficient deterrent effect the Commission considered
it appropriate to apply a multiplication factor to the fine
imposed on Eni and Dow. In 2005, the most recent finan-
cial year preceding the Decision, the total turnover of Eni
was EUR 86,10 billion, the total turnover of Dow was
EUR 39,12 billion.

(15) The basic amount of the fine was determined as a propor-
tion of the value of the sales of CR made by each under-
taking in the relevant geographic area during the last full
business year of
(‘variable amount’),
the infringement
multiplied by the number of years of infringement, plus an
additional amount, also calculated as a proportion of the
value of sales,
in order to deter horizontal price fixing
agreements (‘entry fee’).

5.3. Application of the 10 % turnover limit

(21) The final individual amounts of the fines calculated prior
to the application of the Leniency Notice were below 10 %
of the worldwide turnovers of the addressed undertakings.

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5.4. Application of

the 2002 Leniency Notice:

immunity and reduction of fines

(22) Bayer, Tosoh, DuPont/DDE, Polimeri

further
subsidiary of Eni co-operated with the Commission at
different stages of the investigation with a view to receiving
the favourable treatment set out in the 2002 Leniency
Notice, applicable to the present case.

and a

5.4.1. Immunity

(23) Bayer was the first undertaking to inform the Commission
about the existence of a cartel in the CR sector affecting
the EEA market. Bayer therefore qualified for immunity.

5.4.2. Reduction of fines

(24) Tosoh was the second company to approach the Commis-
sion. Tosoh's cooperation was rewarded with a 50 %
reduction of the fine.

(25) DDE (DuPont/Dow) offered its
Commission in November 2003.
rewarded with a 25 % reduction of the fine.

cooperation to the
Its cooperation was

April 2005, the decision came to the conclusion that none
of
them provided significant added value within the
meaning of point 21 of the 2002 Leniency Notice. There-
fore the Commission did not grant these two companies a
reduction of the fine.

6. DECISION

(27) The addressees of the Decision and the duration of their

involvement were as follows:

(a) Bayer AG: from 13 May 1993 to 13 May 2002;

(b) E.I. DuPont de Nemours and Company: from 13 May
1993 to 13 May 2002; DuPont
Performance
Elastomers SA, DuPont Performance Elastomers LLC
and The Dow Chemical Company: from 1 April 1996
to 13 May 2002;

(c) Denki Kagaku Kogyo KK and Denka Chemicals GmbH:

from 13 May 1993 to 13 May 2002;

(d) Eni SpA and Polimeri Europa SpA: from 13 May 1993

to 13 May 2002;

(26) Regarding Polimeri and a second subsidiary of Eni, which
submitted an application under the Leniency Notice in

(e) Tosoh Corporation and Tosoh Europe BV: from 13 May

1993 to 13 May 2002.

(28) Following the above recitals, the following fines were imposed:

(a) Bayer AG

(b) E.I. DuPont de Nemours and Company

of which jointly and severally with:

(i) DuPont Performance Elastomers SA

(ii) DuPont Performance Elastomers LLC

(iii) The Dow Chemical Company

(c) Denki Kagaku Kogyo KK and Denka Chemicals GmbH,

jointly and severally

EUR 0

EUR 59 250 000

EUR 44 250 000

EUR 44 250 000

EUR 44 250 000

EUR 47 000 000

(d) Eni SpA and Polimeri Europa SpA, jointly and severally

EUR 132 160 000

(e) Tosoh Corporation and Tosoh Europe BV, jointly and sever-

EUR 4 800 000

ally

(f)

The Dow Chemical Company

EUR 4 425 000

(29) The undertakings listed in recital (27) were ordered to bring to an end immediately the infringement
referred to in recital (3), in so far as they had not already done so and to refrain from repeating any act
or conduct described in recital (3), and from any act or conduct having an identical or similar object or
effect.