Outokumpu gets heavy EU fine for involvement in copper cartel

Company admits wrongdoing, but appeals amount of fine

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The European Commission has imposed a fine of EUR 36 million on the Finnish metallurgical company Outokumpu for involvement in a price cartel for copper tubing for plumbing. The company announced immediately that it would appeal the decision.
      In December last year the Outokumpu concern was fined EUR 18 million for participation in a cartel involving copper tubing for air conditioning equipment. The company lodged an appeal against that ruling as well.
      At present Outokumpu faces a total of EUR 54 million in fines. The sum is the largest penalty ever imposed on a Finnish company by the EU for violations of competition rules.
     
Outokumpu has conceded that "certain individuals" working in the company had violated the law on competition, and that after the launch of the EU investigation, the detailed instructions put out by the concern did not have a sufficient impact.
      The EU investigation started in March 2001. Outokumpu says that in the spring of that year it implemented a number of organisational changes, after internal investigations revealed that some people in the concern were involved in illegal activities.
      Outokumpu CEO Jyrki Juusela emphasises in a press release that "these kinds of violations of the law on competition violate the rules of good business practice and the values of Outokumpu".
      Juusela nevertheless feels that the fine is unreasonably high.
     
The European Commission characterises the copper tube cartel as a well-organised classic cartel, whose existence was revealed when the US company Mueller Industries Inc. came forward with cartel revelations.
      Mueller took advantage of a law which came into effect in 1996, which allows a company that is the first to reveal the existence of a cartel to get off without punishment.
      The other eight companies involved in the cartel used code names and held meetings at airports.
      Production output and market shares were divided among the various companies. Those involved also agreed on price targets and other commercial conditions between 1988 and 2001.
      The value of the market in 2000, the cartel’s last full year of operation, was EUR 1.15 billion.
      The companies averted competition by exchanging information about sales, orders, market shares, and prices.


Previously in HS International Edition:
  Outokumpu giving up copper - hopes to become world leader in stainless steel (1.9.2004)

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