The European Commission has fined several businesses operating across the EU for cartel activities in fixing the price of paraffin waxes. The cartel was active from 1992 until 2005 when surprise raids by the competition authorities in April 2005 effectively brought the cartel to an end. Those involved included ExxonMobil, Repsol, Shell and Total.  Shell fessed up and co-operated under an immunity scheme for the first cartel member to break ranks.  The so called Leniency Notice issued by the Commission.

The Commission press release stated that “Competition Commissioner Neelie Kroes said “There is probably not a household or company in Europe that has not bought products affected by this ‘paraffin mafia’ cartel, with all that implies in terms of paying over the odds, higher costs and economic damage. Such illegal cartel behaviour cannot and will not be tolerated by the Commission, and companies’ managers and shareholders should take note”.

According to the Commission the cartel was known in Shell as the ‘Paraffin Mafia’ and in another cartel member as the ‘Blauer Salon’ after a hotel bar in Germany where the first meetings took place of the cartel. Later meetings took place in hotels in different parts of Europe including Italy, France, and Germany.

The total fines were Euros 678 million.

It is important for businesses to be aware that if they have been affected by anti-competitive behaviour such as in this case then a claim for damages can be brought before the courts of EU member states. 

Further European Court case law and Regulation 1/2003 confirm that in a case before a national court, a Commission decision is binding proof that a) the behaviour took place, and b) that it was illegal. Very helpful as the proof of breach of competition law can require complex market analysis at considerable cost.

Posted: October 13th, 2008 under Competition Law & Regulatory.
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