PRODUCERS
OF CRT
GLASS CASE
Presented By Tingting Guo, Faraz Rahman, Marion Philippon, & Anna Le Breton
Facts The Commission carried out an inspection at the manufacturing facility of CRT Glass sector with the belief that some companies were involved in anti-competitive activities.
The Companies allegedly involved in the Cartel were:Asahi Glass Co LtdNippon Electric Glass Co LtdSamsung Corner Precision Materials Co LtdSchott Ag
Based on further investigations, the Commission released a decision ruling that these companies were involved in a Cartel (from 23rd Feb 1999 to 27th Dec 2003) resulting in a “single and continuous infringement” of Article 101 of the Treaty of Functioning of the EU and Article 53 of the EEA Agreement in the sector of CRT Glass production. The Cartel was involved in price coordination covering the EEA’s territory.
Reduction under the Leniency
Notice
Reduction under the settlement
Notice
Fine (Eur)
SCP 100% 10% 0
NEG 50% 10% 43,200,000
Schott Ag - 10% 40,401,000
Asahi Glass Co - 10% 45,135,000
Fines Imposed by the Decision
First Article Applicable on this Case
Article 101 (ex Article 81 TEC) of TFEU
The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
Directly or indirectly fix purchase or selling prices or any other trading conditions; Limit or control production, markets, technical development, or investment; Share markets or sources of supply; Apply dissimilar conditions to equivalent transactions with other trading parties,
thereby placing them at a competitive disadvantage; Make the conclusion of contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Article 53 of EEA Agreement
The following shall be prohibited as incompatible with the functioning of this agreement: all agreements between undertakings, decision by associations of undertakings and concerted practices which may affect trade between contracting parties and which have as their object or effect the prevention, restriction or distortion of competition within the territory covered by this agreement, and in particular in those which, Directly or indirectly fix purchase or selling price or any other conditions Limit or control production, markets, technical development or investment Share markets or sources of supply Apply dissimilar conditions to equivalent transactions with other trading parties,
thereby placing them at a competitive advantage Make the conclusion of the contracts subject to acceptance by the other parties of
supplementary obligations which, by their nature or according to commercial usage, have no concentration with the subject of contracts
Second Article Applicable on this Case
The Cartel’s timeline23/02/99
First Meeting /
Begging of the cartel
02/03/99First
(bilateral) meeting including
AGC
14/07/01
AGC only contributed to a limited extent to the
cartel and was not involved in all of its
aspects
12/07/01 03/12/02
Significantly fewer instances of anti-
competitive contracts
07/03/03AGC
coordinate the output of CRT glass
Limited cartel activity for AGC
27/12/04NEG and
SCP leave the cartel / end of the
cartel
10/05/04Schott’s
leaves the cartel
04/10/04AGC leaves the cartel
2008The
Commission starts
investigating
Procedure
29/06/10Proceedings are initiated
13/07/10 01/07/11
Settlement discussions / The cartel members submit their formal request to settle
29/07/11The Commission adopts a statement of
objections / The parties confirm the content reflecting their submissions / They remain committed to the settlement procedure.
17/10/11The Advisory committee on
restrictive practices and dominant positions issued a
favorable opinion.
19/10/11The
Commission adopt the decision
The commission decisionReduction under
the leniency Notice
Reduction under the Settlement Notice Fine(EUR)
Samsung Corning Precision Materials
Co.,Ltd.100% 10% 0
Nippon Electric Glass Co.,Ltd. 50% 10% 43 200 000
Schott AG _ 10%40 401 000
(+ 18% reduction for cooperation outside the
Leniency Notice)
Asahi Glass Co.,Ltd. _ 10%45 135 000
(+ 15% reduction for a limited involvement in the
cartel)
Defense
Company overview
Healthy and stable company: 11 billion EUR of worldwide turnover 2010
Glass and glass related products manufacturedGood reputation and well established company in
the sector
Too risky to get into a cartel No interest
Strategy entry mode: Merger
No subsidiaries in EEAWill to expand the marketGain in market sharesSharing know how, supply processes, customer
data-base,,,Strategy entry mode: merger
Transparency of the information and meetings
A limited involvement in the cartel
The Commission itself recognized that AGC was involved in the cartel to a very limited extent:
“From 2 March 1999 to 14 July 2001,AGC was involved only to a limited extend in the cartel’s activities. It only participated in some bilateral cartel meetings during that period and did not take part in trilateral cartel meetings attended by NEG, SCP and Schott”.
“AGC’s cartel contacts were in that period also more sporadic than those of other participants. Therefore, it is considered that AGC contributed during this period only to a lesser extent to maintaining the cartel and was not involved in all of its aspects”.
Its alleged involvement was really short
23/02/99 (Start of cartel)
Not involved
in the cartel
02/03/99(Date to join) 14/07/01
04/10/04(Quitting date)
27/12/04(End of cartel)
involved in the
cartel to a limited extent
Not involved
in the cartel
involved in the
cartel to a
limited extent
Not involve
d in the
cartel07/03/03
Creation of the cartel 23rd of February 1999
Third parties initiative
Samsung Corning Precision Materials Co
Nippon Electric Glass Co.
Schott AG
Asahi Glass Co.
1st involvement on the 2 March 1999
Limited involvement
Limited involvement
AGC only took part in very few bilateral meetings
They did not take part in any of the trilateral meetings
AGC was not involved in direct price co-ordination
Their involvement in the Cartel was to a limited extent
Their involvement was very irregular and was not so transparent as compared to others in Cartel
Limited Involvement
AGC dropped out of Cartel in 27th December 2004
AGC was the second company after Schott to drop from the Cartel
Others were still involved in the Cartel
Span of Cartel involvement of AGC was of 3 years 11 months
(TITLE) our behavior might have been negligent. (Anna)
70% reduction of its fine
Accordingly to those fact, AGC can ask for a 70% reduction of its fine.
Explanation of Keywords
CARTELA cartel is a group of similar, independent companies which join together to fix prices, to limit production or to share markets or customers between them.This is why cartels are illegal under EU competition law and why the European Commission imposes heavy fines on companies involved in a cartel.
ANTITRUSTCompetition is a basic mechanism of the market economy which encourages companies to offer consumers goods and services at the most favorable terms. It encourages efficiency and innovation and reduces prices. In order to be effective, competition requires companies to act independently of each other, but subject to the competitive pressure exerted by the others.