April 6, 2006

Degussa gets 23 percent off its price-fixing fine
 

World's biggest specialty drug maker Degussa said Wednesday (Apr 5) it may appeal to the European Court of Justice, the EU's highest court despite having EUR 27 million (US$33.2 million) shaved off its EUR118 million fine.

The company was fined in 2002 for its part in a methionine cartel which prosecutors said had been operating globally for 12 years, cornering a market that was worth EUR260 million (US$319.7 million) a year.

The company, whose annual sales hit EUR11.7 billion (US$14.4 billion) last year, is now liable for a EUR 91.1 million (US$112.1 million) fine instead. Another company which was also fined for fixing methionine prices was Nippon Soda Co. Aventis SA of France was spared the fine even though it was a member of the cartel as it had alerted authorities to the cartel's existences and provided proof of its operations. 

The commission said it reduced the fine for Degussa as it had overestimated the seriousness of the offense, the European Court of First Instance said in a statement. Degussa had also cooperated with investigators, thus showing itself deserving of that reduction. The commission also added that the fine had been higher at that time to deter others from participating in such a cartel. 

The fine against Degussa was one of the highest against an individual cartel member at the time, said Rainer Bechtold, a lawyer for Degussa.

Degussa appealed the fine at the Court of First Instance, saying the commission based the penalty on incorrect sales figures. The company also disputed the length of time the cartel had been in operation.

Factors such as the length of time the cartel has been in operation and the level of cooperation the companies afforded can lower or increase fines.

The largest such fine imposed by the commission was EUR462 million (US$ 568.1 million) against Roche Holding in 2001 for fixing the price of vitamins.

In March, an EU court gave BASF a 20-percent reduction on its fine as well. BASF had been found guilty for its role in a vitamin cartel. The fine was reduced from EUR$296.2 million (US$357 million) to EUR236.9 million (US$285 million) as the commission failed to establish that BASF had acted as instigator or leader of the cartels for some vitamins.