Antitrust: Commission fines producers of foam for mattresses, sofas and car seats €114m in cartel settlement

The European Commission has found that the four major producers of flexible polyurethane foam – Vita, Carpenter, Recticel and Eurofoam – participated in a cartel and has imposed fines totalling €114,077,000. Flexible polyurethane foam is mainly used in household furniture such as mattresses or sofas. Applications in the automotive sector – in particular for car seats – also account for around a quarter of the total flexible polyurethane foam market.

The companies colluded to coordinate the sales prices of various types of foam for nearly five years, from October 2005 until July 2010, in 10 EU member states (Austria, Belgium, Estonia, France, Germany, Hungary, the Netherlands, Poland, Romania and the UK). Vita was not fined as it benefited from immunity under the Commission's 2006 Leniency Notice for revealing the existence of the cartel to the Commission. Eurofoam (a joint venture between Recticel and Greiner Holding AG), Recticel and Greiner received reductions of their fines for their cooperation in the investigation under the Commission's leniency programme. Since all companies agreed to settle the case with the Commission, their fines were further reduced by 10%.

Commission Vice President in charge of competition policy Joaquín Almunia said: "Cartels harm our entire economy and cannot be tolerated. This case illustrates how essential it is to keep fighting and sanctioning such illegal behaviour: here the cartelized product is both a key component of the furniture bought by all citizens, such as mattresses and sofas, and a significant input for certain businesses, for example car makers."

The aim of the cartel was to pass on raw material price increases of bulk chemicals to customers and avoid aggressive price competition between the four producers. In order to achieve this goal, the cartelists organized price coordination meetings at all levels of European management. The participants met on the margins of European and national associations and had numerous telephone and other bilateral contacts. The cartel operated for almost five years, from October 2005 until July 2010.

Fines

The total fines imposed are as follows:

This means that in total Eurofoam is liable for up to € 14 819 000, Greiner for up to € 24 183 000, and Recticel (both for its own involvement and that of Eurofoam) for up to € 39 068 000. The fines were set on the basis of the Commission's 2006 Guidelines on fines (see IP/06/857 andMEMO/06/256).

In setting the level of fines, the Commission took into account the companies' sales of the products concerned in the relevant member states, the serious nature of the infringement, its geographic scope and its duration. Vita received full immunity for revealing the existence of the cartel and thereby avoided a fine of € 61.7m for its participation in the infringement.

Recticel, Eurofoam and Greiner benefited from reductions of fines of 50% under the 2006 Leniency Notice for their co-operation. The reductions reflect the timing of their cooperation and the extent to which the evidence they provided helped the Commission to prove the existence of the cartel. Moreover, under the Commission's 2008 Settlement Notice, the Commission reduced the fines imposed on all the companies by 10% as they acknowledged their participation in the cartel and their liability in this respect. The responsibility of Carpenter was established by the direct participation in the conduct of Carpenter's European subsidiaries while Carpenter Co. was considered liable only as their parent company.

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