ArcelorMittal’s EU Cartel Fine Cut by 80% to $65 Million
ArcelorMittal’s Antitrust Fine Cut by 80%, EU Agency Says
Wolfgang von Brauchitsch/Bloomberg
The headquarters of ArcelorMittal sit in Luxembourg.
The headquarters of ArcelorMittal sit in Luxembourg. Photographer: Wolfgang von Brauchitsch/Bloomberg
ArcelorMittal, the world’s biggest steelmaker, and the three units based in Italy, Belgium and France, were among steel producers fined on June 30 for fixing the prices of steel used to reinforce concrete for 18 years until 2002. Photographer: Jock Fistick/Bloomberg
ArcelorMittal (MT) won an 80 percent reduction in European Union antitrust fines after a regulator said it couldn’t force the company to pay the share of the overall penalty earmarked for three units.
While the EU normally takes into account the global sales of parent companies when deciding fine levels, in this case “the subsidiaries could not pay this fine and the parent company would not pay it either,” Amelia Torres, a spokeswoman for the European Commission, told reporters in Brussels today.
“There are extreme cases where the established practice may have disproportionate results and this is the conclusion we have come to after seeing the practical effect of the decision,” Torres said. The fines were cut to 45.7 million euros ($65 million) from 230.4 million euros.
EU regulators have recently raised their penalties against parent companies, saying they are liable for competition-law violations by their units. Akzo Nobel NV (AKZA), the world’s largest maker of paints and coatings, lost an appeal in 2009 over its financial liability for a unit’s violations.
Yesterday’s decision “might be the first to acknowledge clearly an awareness that companies can’t be ruined in the name of competition law,” especially when they’re viable, Eric Morgan de Rivery, a partner specializing in competition law at Jones Day, said in a telephone interview. “Punishment shouldn’t be worse than the infringement.”
Three Units
ArcelorMittal, the world’s biggest steelmaker, and the three units based in Italy, Belgium and France, were among steel producers fined on June 30 for fixing the prices of steel used to reinforce concrete for 18 years until 2002.
It’s the second time the commission has cut the fines for ArcelorMittal and its units. In a Sept. 30 decision, it cited errors in the June penalty. The ArcelorMittal units concerned have appeals against the fines pending at the EU court in Luxembourg.
The commission yesterday opted to “reduce the fine for the first 15 years of the cartel when the subsidiaries were solely responsible for their behavior,” Torres said.
The punishments concern “anticompetitive practices that took place back more than 25 years ago,” said Giles Read, a London-based spokesman for ArcelorMittal.
The case is a “particular situation where the parent company had been involved in the violation for a much shorter period of time than its subsidiaries,” de Rivery said.
Undermined ‘Credibility’
Yesterday’s move is “exceptional,” Simon Hirsbrunner, a lawyer with Heuking Kuehn Lueer Wojtek in Brussels, said. “Fine reductions of such extreme proportions will undoubtedly undermine the credibility of the commission’s fining policy.”
Lowering the fines again is “odd,”, Mark Tricker, a competition lawyer in Brussels with Norton Rose LLP, said in an e-mail.
The commission “must have received compelling evidence that ArcelorMittal would not step in to save its subsidiaries,” Tricker said. “One would usually expect such claims to be examined before a decision is issued.”
The Brussels-based commission said yesterday it also cut a fine against Ori Martin Acciaieria E Ferriera Di Brescia SpA and its subsidiary Siderurgica Latina Martin to about 15.9 million euros from 19.8 million euros.
Aalberts Industries NV (AALB), Europe’s biggest maker of fittings used in faucets and heaters, on March 24 won an EU court ruling overturning a 100.8 million-euro antitrust fine. The court said Aalberts subsidiaries didn’t participate in a copper cartel during the period they were owned by Aalberts.
ArcelorMittal, based in Luxembourg, reported in February a fourth-quarter loss of $780 million, compared with net income of $1.1 billion a year earlier, as prices fell and raw-material costs grew. Steel producers have struggled to pass on rising raw-material costs after prices for the alloy fell and consumption dwindled.
To contact the reporters on this story: Aoife White in Brussels at awhite62@bloomberg.net; Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.
Rate this Page