The European Community Commission said today it would impose record fines totaling $55 million against 15 petrochemical companies for illegal price-fixing and market sharing.
The decision underlined the EC's intention to strictly enforce its competition rules while encouraging greater cooperation by European companies to strengthen their position in world markets, commission officials said.
The severity of the fines also apparently represented a victory for Peter Sutherland, the EC commissioner for competition, and other commission supporters of a tougher antitrust policy, who argue that some past EC penalties were not strong enough deterrents.
The fine of $10.8 million levied against one of the companies, Montepolimeri, part of Montedison SpA of Italy, was the largest penalty ever imposed by the commission on one firm in a competition case, EC officials said.
A spokesman for Montedison and several of the other penalized companies said they were waiting to see the full text of the commission ruling before deciding whether to contest the decision in the European Court of Justice.
EC officials said the companies fined by the commission formed a price-fixing and market-sharing cartel in polypropylene, which is used in the plastics industry to make packaging film and tape, rope, clothing, car parts and other products.
Directors or senior managers of most of the companies met twice a month to monitor market quotas and to set target prices or jointly raise the price of polypropylene, according to EC officials. They said the cartel was led by the four largest producers, Montepolimeri, Hoechst AG of West Germany and ICI PLC and Shell International Chemical Co., both of Britain.
The cartel operated from 1977 until 1983, when EC investigators and national authorities conducted surprise raids on offices of several of the companies, which provided evidence of the arrangement, officials said.
Sutherland said in a statement that the producers had an "overall plan to manipulate the polypropylene market," which is worth about $1.5 billion.
The decision by the 17-man commission to impose the fines followed several months of debate over the size of the penalties. Some of the commissioners reportedly had argued for less severe fines because the European petrochemical industry is facing increasingly strong competition from Middle East producers.
Aides to Sutherland said one of the commission's major goals was to encourage greater cooperation and integration among companies, thereby improving the global competitiveness of European industry. However, they stressed that EC antitrust policy would not be relaxed to achieve this goal.
Other companies fined were: Hercules Chemicals SA, Solvay & Cie SA and Petrofina SA of Belgium; Huels AG and BASF AG of West Germany; DSM of the Netherlands; ATO Chem. SA and Rhone-Poulenc SA of France; Linz AG of Austria; Statoil of Norway; and ANIC SpA of Italy.