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Last updated: April 13, 2011 11:47 pm
Consumer goods groups Procter & Gamble and Unilever will have to pay fines totalling €315.2m (£280m, $455m) for fixing prices of laundry powder detergents in Europe, together with Germany’s Henkel, for more than three years.
European antitrust regulators said the cartel, which developed out of a valid environmental initiative in the industry, ran between early 2002 and March 2005 and covered eight European countries – including Belgium, France, Germany, Greece, Italy, Portugal, Spain and the Netherlands.
Henkel finally blew the whistle on the arrangements in 2008, meaning that it gets immunity from any fines. The company said the cartel arrangements were detected during internal audits in 2008 and that it “immediately informed the authorities”.
In a statement, Dirk-Stephan Koedijk, Henkel’s chief compliance officer, said: “We had to acknowledge concrete evidence of misconduct by employees in several western European countries ... we have intensively investigated internally and have made our findings available to the authorities promptly and in an unrestricted manner.”
P&G and Unilever have now settled the matter with the European Commission, meaning that they benefit from a 10 per cent reduction in fines under Brussels’ new settlement guidelines. The two companies also co-operated in the investigation, which meant that P&G’s fine was cut by a further 50 per cent and Unilever’s fine was cut by a further 25 per cent.
As a result, P&G was fined €211.2m, while Unilever was fined €104m.
On Wednesday, Joaquín Almunia, EU competition commissioner, said the cartel had grown out of a genuine and legal environmental initiative that was co-ordinated through a trade association and dealt with the packaging and presentation of products. But, in the course of this, the companies strayed into illegal territory, agreeing measures to protect their market shares, maintain prices and, ultimately, fix prices.
This is the third cartel investigation to be resolved under the Commission’s settlement procedures, which came into operation in 2008. The new procedures had a slow start, although lawyers and officials say they are becoming increasingly comfortable with the mechanisms, which are designed to avoid long legal fights over liability and fines. Mr Almunia said he was “happy with the experience”.
The detergent manufacturers could still be vulnerable to damages claims from “victims” of the cartel. Consumers are entitled to bring claims before national courts, seeking redress.
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