Dow fined $84.8 million
11/29/2006
 

BRUSSELS, Belgium (AP) – The European Commission imposed fines of about $682 million Wednesday against five companies, including The Dow Chemical Co., which it said had fixed prices on synthetic rubber used in tires.

Dow’s share of the fine totaled $84.8 million. It was reduced by 40 percent because of the company’s cooperation in the investigation.

Others fined included Royal Dutch Shell PLC, Eni SPA, Unipetrol AS and Trade-Stomil.

A sixth company, Bayer AG, avoided a fine after blowing the whistle to European Union regulators.

The fine is the second-largest ever on a group of companies accused of running a cartel and punishes the oil refiners and chemical producers for fixing prices and sharing customers for certain types of synthetic rubber known as butadiene rubber and emulsion styrene butadiene rubber from 1996 to 2002.

 Italy’s Eni and British-Dutch oil company Shell saw their individual fines hiked by half for a repeat offense. Eni must pay the largest fine, $357.6 million, while Shell was fined $211 million.

Bayer first told EU regulators about the case and got full immunity, escaping a potential $268 million fine.

Dow received its reduction for supplying regulators with information largely backing Bayer’s claims. Shell also admitted it was part of the cartel at a late stage – but too late to win a lesser fine.

Czech refiner Unipetrol was ordered to pay $23 million with Poland’s Trade-Stomil fined $5 million.

"The fines are so high because it’s a large market and several of the companies are repeat offenders," said EU spokesman Jonathan Todd.

Customers for the rubber are tire manufacturers Michelin SA, Pirelli & C. SpA and Goodyear Tire & Rubber Co., as well as other companies that make shoe soles, floor coverings and golf balls. All the cartel players made emulsion styrene butadiene rubber but butadiene rubber was produced only by Eni, Bayer, Shell and Dow, the Commission said.

Regulators said the cartel agreements were made before or after companies met for talks with a synthetic rubber industry group in Milan, Vienna, Amsterdam, Prague and London among others.

"During these meetings the participants agreed to prices and exchanged information on key customers and the amounts of synthetic rubber supplied to them," they said.

Copyright 2006 Associated Press.

©Midland Daily News 2006


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