German Federal Cartel Office: Steel manufacturers fined record of about EUR 646 million for agreeing on surcharges and exchange of information

Three companies as well as three persons responsible have been fined a total of around EUR 646 million by the German Federal Cartel Office (FCO). The companies exchanged and agreed on certain supplements and surcharges for so called quarto plates in Germany for about 14 years.

Quarto plates are hot-rolled flat steel products that are used in particular in steel construction, bridge building, building construction, shipbuilding, boilers and pressure vessels, general mechanical engineering, wind tower and pipeline construction and in the offshore industry.

The Infringement

According to the FCO, the price of quarto plates in Germany traditionally consisted of two components: the individually negotiated base price and various price supplements and surcharges. Supplement and surcharges accounted for 20-25% of the total price and were published via price lists. During the first six years the companies agreed on price supplements and surcharges via regular meetings within an association. The model agreed on was the basis for the calculation of those price components and their coordinated adoption from there on until end of June 2016.

The Fine

Dillinger Hüttenwerke was the first company to cooperate with the FCO and therefore received immunity from fines as set out in the leniency programme of the FCO. The admittance to the accusations made by the FCO and agreement to the settlement of all companies as well as the cooperation of voestalpine Grobblech GmbH influenced the calculation of the fines. Voestalpine confirmed that they agreed to pay a fine of EUR 65.5 million.

The fining decisions can be appealed  to the Higher Regional Court Düsseldorf. If the fining decisions become final, they will result in one of the highest fines ever imposed by the FCO and nearly double the total fines imposed in 2018 (EUR 376 million).

Comment

Companies and associations currently review their practices with regard to price components and particularly surcharges as this was not the first decision with regard to surcharges. The decision fits into a series of activities of the FCO in recent years in which the steel industry has regularly attracted the attention of the FCO and been subject of different investigations. Just in November the FCO has imposed fines on carmakers BMW, Daimler and VW for anti-competitive practices in the purchase of steel. In 2018 the FCO imposed first fines totaling approx. EUR 205 million on special steel companies. In the same year, a steel association realigned their structure and activity in cooperation with the FCO.

Links:

German Press Release of the FCO

English Press Release of the FCO

German Press Release of voestalpine