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EU: EU Fines 4 Glassmakers for Price-Fixing

by Constant BrandAP
November 28th, 2007

Guardian Industries Corp. of the United States and three other companies were fined about $724 million on Wednesday by European regulators who said they fixed the price in Europe of flat glass used to make windows, fire-resistant glass and mirrors.

Neelie Kroes, the EU's competition commissioner, said its investigation showed Guardian, which is based in Auburn Hills, Mich.; France's Compagnie de Saint-Gobain SA, British-based Pilkington Group Ltd. and Japan's Asahi Glass Co. colluded to fix prices and other commercial conditions in the European market.

Kroes said the EU "will not tolerate companies cheating consumers and business customers by fixing prices and depriving them of the benefits of the single market."

Guardian said it was shocked by the decision and was reviewing whether to appeal.

EU officials said their investigation, which included surprise raids at the four companies' European subsidiaries, found that they agreed to coordinate "several rounds of price increases" during hotel and restaurant meetings in several European countries between 2004 and 2005.

Guardian received the highest fine, of 148 million euros ($220 million), followed by Pilkington at 140 million euros ($208 million). Saint-Gobain was fined 133.9 million euros ($199.2 million), while Asahi's European subsidiary, then known as Glaverbel, received a fine of 65 million euros ($96.7 million).

Asahi's fine was lower because it cooperated and "was of great help" to EU authorities in handing over information over the cartel, Kroes said.

"The important thing is that the fine as a whole is sufficiently deterrent so that no other companies will be tempted to infringe the rules again in the future and I believe we have achieved that aim in this case," she said.

Peter Walters, group vice president for Guardian Industries, said Wednesday morning that the company was "extremely shocked" by the regulators' decision, which it had learned about through an EU press release.

"We don't believe the facts justify the outcome as it pertains to Guardian," he said.

Walters said the company will review the findings, and it may appeal.

Pilkington, which was bought last year by Japan's Nippon Sheet Glass Co. Ltd., acknowledged the fine, adding that it was also under a separate EU investigation involving possible price fixing in Europe's automotive glass sector.

Saint Gobain spokeswoman Sophie Chevallon said the company "took note" of the decision. "This first decision of the EU is not leading us to fundamentally change our project profile," she said.

She said the company was expecting an even bigger fine from a decision later this year or early next year about car windows. The company is setting aside a total of 650 million euros ($965 million) to cover both pricing-related fines, she said.

Asahi and its European subsidiary ACG Flat Glass Europe, said they were examining the cartel decision and had not yet decided on whether it would appeal the fine.

Wednesday's cartel fine was the second handed out under new EU cartel fine rules, which aim to hand out tougher penalties against companies that try to obstruct fair competition. The fines are capped at 10 percent of annual global sales.

Kroes said the case was brought to light through close cooperation between EU antitrust regulators and national competition authorities, and that the European Commission started its probe into the cartel based on information provided by national authorities.






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