The Federal Cartel Office (FCO) has fined three companies and three persons a total of approximately €646 million.(1) The companies agreed and exchanged certain supplements and surcharges for so-called 'quarto plates' in Germany for approximately 14 years. Quarto plates are hot-rolled flat steel products that are particularly common in the construction of steel, bridges, buildings, ships, boilers and pressure vessels, wind towers and pipelines, as well as in general mechanical engineering and in the offshore industry.
According to the FCO, the price of quarto plates in Germany traditionally consisted of two components:
- an individually negotiated base price; and
- various price supplements and surcharges.
Supplements and surcharges accounted for 20% to 25% of the total price and were published via price lists.
During the first six years of the conduct in question, the companies agreed price supplements and surcharges via regular meetings within an association. The agreed model was the basis for the calculation of those price components and their coordinated adoption from then on until the end of June 2016.
Dillinger Hüttenwerke was the first company to cooperate with the FCO and therefore received immunity from fines, as set out in the FCO's leniency programme. Each company's admission of the accusations made by the FCO and agreement to the settlement, as well as Voestalpine Grobblech GmbH's cooperation, influenced the calculation of the fines. Voestalpine has confirmed that it has agreed to pay a fine of €65.5 million.(2)
The fining decisions can be appealed to the Dusseldorf Higher Regional Court. If the fining decisions become final, they will be some of the highest ever imposed by the FCO and will nearly double the total fines imposed in 2018 (€376 million).
Companies and associations should review their practices with regard to price components (particularly surcharges) as this is not the first decision on this matter. Rather, it is one of several FCO initiatives of recent years to have focused on the steel industry. For example, in November 2019 the FCO imposed fines on carmakers BMW, Daimler and Volkswagen for anti-competitive practices in the purchase of steel. Further, in 2018 the FCO imposed first fines totalling approximately €205 million on special steel companies. In the same year, a steel association realigned its structure and activity in cooperation with the FCO.
Endnotes
(1) The FCO's press release is available in English here and in German here.
(2) Voestalpine's press release is available in German here.
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