updated 12/5/2007 11:37:39 AM ET 2007-12-05T16:37:39

European Union regulators slapped five companies — including DuPont and Dow Chemical Co. — with $358 million in fines Wednesday for fixing the price of a type of rubber used to make everything from shoe soles to condoms.

The EU said the cartel operated between 1993 and 2002, and that companies from the U.S., Germany, Italy and Japan colluded on market shares and set prices for chloroprene rubber.

Italy's Eni SpA faced the highest fine — $194.6 million — followed by DuPont, ordered to pay $87.4 million, and Dow Chemical with a $71.8 million fine.

Japan's Denka Seiken Co. Ltd. was fined $69.3 million, while Tosoh Corp. received only a $7 million fine because it cooperated with EU investigators.

German chemical maker Bayer AG, while a repeat cartel offender, avoided a nearly $300 million fine because it helped blow the whistle on the cartel, EU spokesman Jonathan Todd said.

Bayer spokesman Markus Loeber confirmed that the company had assisted the European Commission but could not comment on Wednesday's announcement because Bayer has not received official notice from the EU.

"The company very much regrets the legal violations in the past," Loeber said in an e-mail, adding that Bayer introduced global guidelines on legal compliance and corporate responsibility in 1999 and tightened them in 2004. "Violations of this corporate compliance program will not be tolerated."

Denka Seiken did not comment on the fines. Tosoh spokesman Etsuya Ikeda said the company had not received official notice but would review it carefully with lawyers.

DuPont and Dow Chemical got 25 percent reductions in their fines because they also cooperated. Eni's penalty was raised 60 percent because it was a repeat offender.

EU Competition Commissioner Neelie Kroes said it was "particularly disappointing" that the rubber industry "has still not learned its lessons about avoiding cartels."

Chloroprene rubber is a synthetic rubber mainly used to make hoses, transmission belts, and as latex used to make diving equipment, condoms and shoe soles.

According to the European Commission, the companies held "regular meetings to discuss prices, exchange sensitive commercial information" and to review their "illegal agreements."

"These practices constitute very serious infringements of ... antitrust rules," the European Commission, the EU's executive arm, said in a statement.

The EU investigation into the cartel started in March 2003 with surprise raids at several companies.

The charges come two years after U.S. antitrust authorities levied similar charges against Dow Chemical Co., DuPont Dow Elastomers LLC and Italy's Syndial SpA. Dow Chemical entered a guilty plea and was ordered to pay a $84 million fine.

The U.S. Justice Department also fined Syndial $9 million for participating in an "international conspiracy" to fix prices from September 1999 to April 2002.

Under EU competition law, the European Commission can order companies found guilty of price fixing to pay fines of up to 10 percent of their worldwide annual turnover.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com