Synthetic Rubber Producers Fined for Price Fixing

The European Commission has imposed fines totalling 34,230,000 euros on the Bayer and Zeon groups for fixing prices for Nitrile Butadiene Rubber (NBR) in violation of the EC Treaty’s and the EEA Agreement’s ban on cartels and restrictive business practices (Article 81 of the EC Treaty and Article 53 of the EEA Agreement).

Between late 2000 and 2002, Germany’s Bayer and Japan’s Zeon managed to raise or otherwise stabilise prices through a series of meetings and other illicit contacts. Bayer’s and Zeon’s fines have been reduced by 30 and 20 per cent respectively, because they co-operated with the investigation under the Commission’s 2002 Leniency Notice (see IP/02/247 and MEMO/02/23). However Bayer’s fine was then increased by 50 per cent because it had been fined for cartel activity in a previous Commission decision.

Competition Commissioner Neelie Kroes said: “This is the fourth cartel decision in the synthetic rubber industry in just over three years. I hope that this is the last. Buyers of synthetic rubber should be concerned about how much these cartels have cost them. And shareholders should be concerned about how much the fines have cost them.”

The Commission’s investigation started with surprise inspections in March 2003, prompted by an application for immunity lodged by a third company under the 2002 Leniency Notice (see IP/02/247 and MEMO/02/23). Both Bayer and Zeon co-operated with the Commission and submitted additional evidence.

NBR is a type of synthetic rubber consisting of a complex family of unsaturated copolymers of acrylonitrile and butadiene. Resistance to petroleum fluids, good physical properties and useful temperature range make NBR a widely used rubber, used predominantly in the motor industry. NBR is used mainly in vehicle manufacturing for fuel and oil handling hoses, seals, o-rings and water handling applications.