PRODUCERS OF CRT GLASS CASE

Presented By Tingting Guo, Faraz Rahman, Marion

Philippon, & Anna Le Breton

Facts
The Commission carried out an inspection at the manufacturing facility of CRT Glass sector with the belief that some companies were involved in anti-competitive activities. The Companies allegedly involved in the Cartel were:
Asahi Glass Co Ltd Nippon Electric Glass Co Ltd Samsung Corner Precision Materials Co Ltd Schott Ag

Based on further investigations, the Commission released a decision ruling that these companies were involved in a Cartel (from 23rd Feb 1999 to 27th Dec 2003) resulting in a single and continuous infringement of Article 101 of the Treaty of Functioning of the EU and Article 53 of the EEA Agreement in the sector of CRT Glass production. The Cartel was involved in price coordination covering the EEAs territory.

Fines Imposed by the Decision

Reduction under the Leniency Notice SCP NEG Schott Ag Asahi Glass Co 100% 50% -

Reduction under the settlement Notice 10% 10% 10% 10%

Fine (Eur)

0 43,200,000 40,401,000 45,135,000

First Article Applicable on this Case

Article 101 (ex Article 81 TEC) of TFEU
The following shall be prohibited as incompatible with the internal market: all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market, and in particular those which:
Directly or indirectly fix purchase or selling prices or any other trading conditions; Limit or control production, markets, technical development, or investment; Share markets or sources of supply; Apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; Make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Second Article Applicable on this Case

Article 53 of EEA Agreement
The following shall be prohibited as incompatible with the functioning of this agreement: all agreements between undertakings, decision by associations of undertakings and concerted practices which may affect trade between contracting parties and which have as their object or effect the prevention, restriction or distortion of competition within the territory covered by this agreement, and in particular in those which,
Directly or indirectly fix purchase or selling price or any other conditions Limit or control production, markets, technical development or investment Share markets or sources of supply Apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive advantage Make the conclusion of the contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no concentration with the subject of contracts

The Cartels timeline

23/02/99 First Meeting / Begging of the cartel 14/07/01 10/05/04 Schotts leaves the cartel 04/10/04 AGC leaves the cartel

27/12/04 NEG and SCP leave the cartel / end of the cartel

02/03/99 First (bilateral) meeting including AGC

12/07/01

03/12/02

07/03/03 AGC coordinate the output of CRT glass

Significantly fewer instances of anticompetitive contracts

2008 The Commission starts investigating

AGC only contributed to a limited extent to the cartel and was not involved in all of its aspects

Limited cartel activity for AGC

Procedure
29/06/10 Proceedings are initiated 29/07/11 The Commission adopts a statement of objections / The parties confirm the content reflecting their submissions / They remain committed to the settlement procedure.

19/10/11 The Commission adopt the decision

13/07/10

01/07/11

17/10/11 The Advisory committee on restrictive practices and dominant positions issued a favorable opinion.

Settlement discussions / The cartel members submit their formal request to settle

The commission decision

Reduction under the leniency Notice
Samsung Corning Precision Materials Co.,Ltd. Nippon Electric Glass Co.,Ltd. 100%

Reduction under the Settlement Notice

Fine(EUR)

10%

50%

10%

43 200 000

Schott AG

10%

40 401 000
(+ 18% reduction for cooperation outside the Leniency Notice)

Asahi Glass Co.,Ltd.

10%

45 135 000
(+ 15% reduction for a limited involvement in the cartel)

Defense

Company overview
Healthy and stable company: 11 billion EUR of worldwide turnover 2010 Glass and glass related products manufactured Good reputation and well established company in the sector

Too risky to get into a cartel No interest

Strategy entry mode: Merger

No subsidiaries in EEA Will to expand the market Gain in market shares Sharing know how, supply processes, customer data-base,,, Strategy entry mode: merger

Transparency of the information and meetings

A limited involvement in the cartel

The Commission itself recognized that AGC was involved in the cartel to a very limited extent:
From 2 March 1999 to 14 July 2001,AGC was involved only to a limited extend in the cartels activities. It only participated in some bilateral cartel meetings during that period and did not take part in trilateral cartel meetings attended by NEG, SCP and Schott. AGCs cartel contacts were in that period also more sporadic than those of other participants. Therefore, it is considered that AGC contributed during this period only to a lesser extent to maintaining the cartel and was not involved in all of its aspects.

Its alleged involvement was really short

27/12/04 04/10/04 (End of cartel) (Quitting date)

02/03/99 (Date to join)

14/07/01

07/03/03

23/02/99 (Start of cartel)

Not involved in the cartel

involved in the cartel to a limited extent

Not involved in the cartel

involved in the cartel to a limited extent

Not involved in the cartel

Limited involvement
Creation of the cartel 23rd of February 1999

Samsung Corning Precision Materials Co Nippon Electric Glass Co. Schott AG

Asahi Glass Co. 1st involvement on the 2 March 1999

Third parties initiative

Limited involvement

AGC only took part in very few bilateral meetings They did not take part in any of the trilateral meetings AGC was not involved in direct price co-ordination Their involvement in the Cartel was to a limited extent Their involvement was very irregular and was not so transparent as compared to others in Cartel

Limited Involvement

AGC dropped out of Cartel in 27th December 2004 AGC was the second company after Schott to drop from the Cartel Others were still involved in the Cartel Span of Cartel involvement of AGC was of 3 years 11 months

(TITLE) our behavior might have been negligent. (Anna)

70% reduction of its fine

Accordingly to those fact, AGC can ask for a 70% reduction of its fine.

Explanation of Keywords
CARTEL A cartel is a group of similar, independent companies which join together to fix prices, to limit production or to share markets or customers between them. This is why cartels are illegal under EU competition law and why the European Commission imposes heavy fines on companies involved in a cartel. ANTITRUST Competition is a basic mechanism of the market economy which encourages companies to offer consumers goods and services at the most favorable terms. It encourages efficiency and innovation and reduces prices. In order to be effective, competition requires companies to act independently of each other, but subject to the competitive pressure exerted by the others.