MARINE PAINT MANUFACTURERS
PRESS RELEASE
PRESS RELEASE
Antitrust Authority imposes fine of €4.3 million on five companies for anti-competitive agreement in marine paints
The Italian Competition Authority, at its meeting on 25 January 2007, ascertained the existence of an anti-competitive agreement in the market for marine paints which are used in the maintenance of large cargo ships and passenger liners, and imposed fines totalling 4,374,000 euros on five companies.
At the conclusion of the inquiry, which was launched on 20 April 2005, the Authority established that the companies Boat – Boero Attiva Marine and Protective Coatings Genova S.p.A., Hempel (Italy) S.r.l., International Paint Italia S.p.A., Jotun Italia S.p.A. and Sigma Coatings S.r.l. had, between January 1999 and December 2003, carried out a market-rigging agreement.
The five companies divided up the clientele amongst themselves using a rule based on respecting traditional customer relationships: basically, each paint manufacturer was free to resupply its own customer, or rather the ships previously "acquired", without being subjected to any competitive pressure from the other companies which were party to the agreement. The agreement provided for control mechanisms and compensation for tenders lost or won in violation of the market-sharing criterion as decided at periodic meetings among the parties, and included the fixing of prices for a number of products as well as the rigging of the results of some bidding procedures.
The market for marine paints in which this agreement was set up has the typical characteristics of an oligopoly: the five companies punished represent practically the sum total of suppliers in Italy.
During the course of the inquiry, the companies presented commitments so that the proceeding could be terminated without the ascertaining of the violation; however, the Authority deemed these commitments insufficient to allay the competitive concerns raised by the agreement.
On the other hand, the Authority took a favourable view, in determining the amount of the fines, of all five companies' decision to cease gathering the data necessary for preparing merchant marine statistics through their trade association AVISA. That data collection had in fact assisted in the collusion, so that its discontinuance led to a reduction of 20% in the base amount of the fines.
Further reductions were accorded to the individual companies based on the extent of collaboration they demonstrated during the course of the inquiry: in particular, Boat benefited from a reduction of 30% in the base amount because of its particularly significant collaboration; IP, Sigma and Hempel received reductions of 20%, while the fine on Jotun was reduced by only 10% since their degree of collaboration was modest.
The following are the fines levied on the individual companies:
BOAT Euro 1,080,000;
IP Euro 1,080,000;
Hempel Euro 324,000;
Sigma Euro 756,000;
Jotun Euro 1,134,000.
Rome, 9 February 2007