March 16, 2006

 

EU reduces BASF fine for taking part in vitamin cartel

 

 

A European Union court gave BASF AG a 20 percent reduction for a price-fixing fine, saying that there was inconclusive proof that the company is a cartel ringleader.

 

The court, while condemning BASF for taking part in the vitamin cartel, cut its fine to EUR236.9 million (US$285 million) from EUR 296.2 million (US$357 million) because of procedural errors made by the European Commission.

 

The commission failed to establish that BASF had acted as instigator or leader of the cartels for some vitamins, according to a statement by the Luxembourg-based European Court of First Instance.

 

The EU regulator found in 2001 that BASF and other companies rigged the market for vitamins A, C, D and B complex. Mario Monti, the EU's competition commissioner at the time, said it was the most damaging cartel the commission has ever investigated. The fine against the companies, at EUR855.2 (US$1 billion), was the highest imposed on a cartel.

 

BASF said it will review the decision and decide whether to take further legal action.

 

BASF in January 2005 told judges at the Court of First Instance that the fine, the third-highest imposed by the EU against a single company, should be lowered.

 

Companies can have fines reduced if they tip off regulators about a conspiracy.  BASF was the first to present decisive evidence of the cartels for beta- carotene and carotinoids and so it should therefore have a cut on those fines.

 

The tribunal also found that the commission was wrong to raise BASF's fine for price fixing on vitamins C, D3, beta- carotene and carotinoids.

 

The regulator can increase fines when a company leads a cartel. In this case, the court said the commission could not prove that BASF was a leader.

 

Roche Holding AG, which was also involved in the vitamin cartel, was fined the most with EUR462 million (US$557 million) or 2.6 percent of its annual sales at the time.