Antitrust Law Daily Wrap Up, ANTITRUST—E.U. Gen. Ct.: €357 million fine imposed on Pilkington for role in car glass cartel upheld, (Dec 17, 2014)

By Jeffrey May, J.D.

The General Court of the European Union today upheld a European Commission (EC) decision fining Pilkington Group €357 million for participating in a cartel to allocate supplies of car glass sold to auto makers. The claims for annulment of the contested decision were rejected in their entirety (Pilkington Group Ltd. v. Commission, Case T-72/09, December 17, 2014).

United Kingdom-based Pilkington is one of the world’s largest manufacturers of glass and glazing products. In 2008, the EC imposed more than €1 billion in fines on Pilkington and three other companies for illegal market sharing, and exchange of commercially sensitive information regarding deliveries of car glass in Europe.

In addition to Pilkington, the companies that were fined for their participation in the cartel included Japan's Asahi Glass Co., France-based Saint-Gobain SA, and the Belgian company Soliver. Car glass is used in the automotive industry and comes in various shapes and sizes, such as windscreens, sidelights (windows for front and back doors), backlights (rear windows) and sunroofs. According to the EC, the companies discussed target prices, market sharing, and customer allocation in a series of meetings and other illicit contacts between early 1998 and early 2003. Pilkington was originally fined €370 million; however, that fine was later reduced by the EC to €357 million to correct errors in the original calculation. Pilkington sought to annul the EC decision.

As explained by the court, Pilkington disputed the EC's determinations as to the nature of the infringement and the duration of the company's participation in it, as well as the EC's calculation of the fine imposed. In addition, Pilkington called on the court to exercise its unlimited jurisdiction to substantially reduce the fine.

The EC did not err in finding that Pilkington participated in the allocation of markets for the supply of car glass in Europe through the coordination of pricing policies and supply strategies, the court determined. In addition, the court rejected Pilkington's argument that the EC incorrectly concluded that the company participated in the single and continuous infringement between March 1998 and January 1999. Pilkington had contended that, although its employees attended a March 1998 meeting, the meeting did not have an anticompetitive purpose.

Challenge to fine. With respect to the fine—one of the largest ever imposed on a participant in a cartel—Pilkington challenged the multiplier imposed to calculate the fine and argued that the fine was disproportionate to the gravity of the infringement. The court was not convinced that a multiplier of 4 at most, rather than a multiplier of 4.5, ought to have been applied in the case. Also rejected was Pilkington's assertion that fine was excessive because the challenged conduct was not particularly harmful to competition. Pilkington had contended that the cartel was not systematically implemented and that the infringement was not of long duration and did not involve an exceptionally large market. The court also noted that Pilkington's adoption of a compliance program did not oblige the EC to grant a reduction in the fine. Since the fine appeared to be proportionate and adequate, Pilkington’s claims that the court should exercise its unlimited jurisdiction by reducing that fine were rejected.

This is Case T-72/09.

Attorneys: Jonathan Scott (Herbert Smith Freehills LLP) for Pilkington Group Ltd.

Companies: Pilkington Group Ltd.

Cases: Antitrust