EC Slams Car Glass Makers with Highest Ever Cartel Fine
11/12/2008Today, the European Commission (Commission) fined four car glass manufacturers a total in excess of €1.3 billion for illegal market sharing and exchange of commercially sensitive information regarding deliveries of car glass in the European Economic Area. This is the first time that one can truly appreciate the effect the Commission's new Fining Guidelines can have on a big cartel case. The four companies controlled about 90 per cent of the glass used in Europe in new cars and for original branded replacement glass for cars—a market worth about €2 billion. The Commission increased the fine on Saint-Gobain by 60 per cent because it was a repeat offender, which resulted in the highest ever fine levied by the Commission on an individual company, €896 million.
The fined companies risk further financial detriment should private actions for damages be brought against them. Such actions are highly recommended by the Commission, which publicly provides assurance that a Commission decision is binding proof for national courts that the behaviour took place and was illegal. Any damages awarded will come as an additional penalty to the fine already levied by Commission. Competition Commissioner Neelie Kroes noted in a press release that the high fines reflect the Commission’s commitment to be tough on European industry. The question is whether the Commission is prepared to push this view as far as putting companies out of business. In addition with this approach the Commission is getting dangerously close to disproportionate action, and it is uncertain whether this will ultimately be tolerated by the European Courts.
