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
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
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
"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
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
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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