Gulf-Times (Qatar): Shell, Total, 8 other firms appeal EU fines (for operating an illegal price fixing cartel)

EXTRACT: Shell got the largest fine of 108mn euros for being a repeat offender and for starting the cartel with Dutch builder Royal Volker Wessels NV.

THE ARTICLE

Published: Wednesday, 20 December, 2006, 10:40 AM Doha Time
 
LONDON: Royal Dutch Shell Plc, Total SA and eight other oil and construction companies are appealing 267mn euros ($352mn) in European Union fines for fixing prices of bitumen, a petroleum byproduct used to make asphalt.

The European Commission on September 13 penalised 14 companies for joining the cartel that affected prices of bitumen across the Netherlands for at least eight years.

Shell got the largest fine of 108mn euros for being a repeat offender and for starting the cartel with Dutch builder Royal Volker Wessels NV.

The case was one of the first to fine suppliers and customers for colluding in the same cartel, said Mark Smeets, a lawyer for one of those appealing, Heijmans NV, the third-biggest Dutch builder.

The commission’s decision came as Dutch regulators were conducting a similar investigation, which Smeets argued was unfair to the companies involved.

“There’s no reason why the commission should have taken up the case,’’ Smeets said in a telephone interview yesterday. “The commission should have left it up to the Dutch authorities, which were already investigating the construction market.’’

The oil and construction companies filed separate appeals with the Luxembourg-based European Court of First Instance, the second-highest EU court, between December 1 and 5, according to the court.

Commission spokesman Jonathan Todd said by telephone that the EU was “confident that its decision was well founded from a legal point of view.’’

The Dutch Competition Authority has been investigating some of the same construction companies, including Heijmans, Royal BAM Group NV and Ballast Nedam NV. In September, the NMa regulator cut price-fixing fines on 10 of the companies to 53.4mn euros from 99.4mn euros.

Heijmans, which was fined 17.1mn euros by the EU, argues the commission didn’t prove any wrongdoing and that the company should have been given access to documents, including files on the relations between the commission and Dutch authorities, said Smeets, a lawyer with Allen & Overy LLP.

Shell appealed on December 1, spokeswoman Alexandra Wright said by telephone from London, refusing to comment further.

Volker Wessels spokesman Jos Waltmans also confirmed the appeal without saying more.

Total spokesman Philippe Gateau wasn’t immediately able to comment when reached by telephone.

BP Plc, another cartel member, wasn’t fined because it co-operated in the probe, the commission explained in a statement in September, saying that the cartel’s practices “restricted price competition and disadvantaged smaller road building companies.’’

The EU found that eight suppliers and six purchasers of road bitumen had been colluding to fix prices across the Netherlands from at least 1994 to 2002.

The companies fixed the gross price of bitumen and agreed minimum rebates for cartel members and a smaller maximum rebate for other road builders.

One of the companies, Hollandsche Beton Groep, has since become part of Royal BAM Group.

The other companies to be fined were builders Ballast Nedam and Dura Vermeer Groep, and bitumen suppliers Esha, Kloeckner Bitumen, Kuwait Petroleum Corp, Nynaes Petroleum AB and Wintershall AG. – Bloomberg

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