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#Antitrust: Commission fines three companies €68 million for car battery recycling cartel

| February 9, 2017 | 0 Comments

16667648_10158224775515385_322461080_oThe European Commission has fined Campine, Eco-Bat Technologies and Recylex a total of €68 million for fixing prices for purchasing scrap automotive batteries, in breach of EU antitrust rules. A fourth company, Johnson Controls, was not fined because it revealed the existence of the cartel to the Commission.

Commissioner Margrethe Vestager, in charge of competition policy, said: Well functioning markets can help us reduce waste and support the circular economy. Therefore, we do not tolerate behaviour that undermines competition. The four companies fined today have colluded to maximise their profits made from recycling scrap batteries, reducing competition in this essential link of the recycling chain.” 

From 2009 to 2012, four recycling companies took part in a cartel to fix the purchase prices of scrap lead-acid automotive batteries in Belgium, France, Germany, and the Netherlands. The companies are Campine (Belgium), Eco-Bat Technologies (UK), Johnson Controls (US) and Recylex (France).

Recycling companies purchase used automotive batteries (from cars, vans or trucks) from scrap dealers or scrap collectors. The used batteries are obtained from collection points such as garages, maintenance and repair workshops, battery distributors, scrapyards and other waste disposal sites. Recycling companies carry out the treatment and recovery of scrap batteries and then sell recycled lead, mostly to battery manufacturers, who use it to make new car batteries.

Unlike in most cartels where companies conspire to increase their sales prices, the four recycling companies colluded to reduce the purchase price paid to scrap dealers and collectors for used car batteries. By coordinating to lower the prices they paid for scrap batteries, the four companies disrupted the normal functioning of the market and prevented competition on price.

This behaviour was intended to lower the value of used batteries sold for scrap, to the detriment of used battery sellers. The companies affected by the cartel were mainly small and medium-sized battery collectors and scrap dealers.

The majority of the anti-competitive contacts between the four recycling companies took place on a bilateral basis, mainly through telephone calls, emails, or text messages. Some contacts also took place in person, either in bilateral meetings or, less frequently, in multilateral meetings. The parties were well aware of the illegal character of their contacts and sometimes tried to disguise them by using coded language, for examplereferring to weather conditions to signal different price levels.

Today’s decision ensures that there will be competition on the merits between recyclers of automotive batteries and real competitive price setting for used automotive batteries.

Fines

The fines were set on the basis of the Commission’s 2006 Guidelines on fines (see also MEMO).

As the cartel related to collusion on purchase prices, the Commission used the value of purchases (rather than the value of sales) to set the level of the fines. As those figures were presumably artificially lowered precisely because of the cartel behaviour, this was likely to result in a level of fines below the economic significance of the infringement. Therefore, in order to avoid under-deterrence, the Commission used its discretion under the Guidelines on fines to increase the amount of the fine for all parties by 10%.

The Commission reduced Campine’s fine by 5% as it played a more minor role than the other cartel participants.

Furthermore, under the Commission’s 2006 Leniency Notice:

  • Johnson Controls received full immunity for revealing the existence of the cartel to the Commission, thereby avoiding a fine of € 38 481 300.
  • Eco-Bat and Recylex benefited from reductions of their fines for their cooperation with the Commission’s investigation.
  • Campine’s leniency application was rejected as the Commission found that the company had not disclosed its participation in the infringement.

The breakdown of the fines imposed on each company is as follows:

  Reduction under the Leniency Notice Fine (€)
Johnson Controls 100% 0
Eco-Bat 50% 32 712 000
Recylex 30% 26 739 000
Campine 0% 8 158 000

Background

Automotive batteries are the world’s most recycled consumer product. Practically 99% of car batteries in the EU are recycled. Around 58 million automotive batteries are recycled in the EU every year.

The Commission adopted an ambitious Circular Economy Package on 2 December 2015. The Package consists of an EU Action Plan with measures covering the whole product life cycle: from design, sourcing, production and consumption to waste management and the market for secondary raw materials. The Commission recently reported on the development and progress of the key initiatives from the Action Plan. The waste recycling industry in Europe is the focus of several of these initiatives.

Procedural background

Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the EEA Agreement prohibit cartels and other restrictive business practices.

The Commission’s investigation started following an immunity application by Johnson Controls in June 2012. In September 2012, the Commission carried out inspections at the premises of several companies in the sector.

In June 2015, the Commission initiated proceedings and sent a statement of objections to the addressees of today’s decision. The statement of objections was also sent to a fifth company. However, on the basis of the evidence in the Commission’s file, the Commission decided not to pursue further the investigation against this company.

More information on this case will be available under the case number 40018 in the public case register on the Commission’s competition website, once confidentiality issues have been dealt with. For more information on the Commission’s action against cartels, see its cartels website.

Action for damages

Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without being reduced on account of the Commission fine.

The Antitrust Damages Directive, which Member States had to implement in their legal systems by 27 December 2016, makes it easier for victims of anti-competitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.

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Category: A Frontpage, Antitrust, Business, Crime, Environment, EU, Recycling

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