Coats and YKK Lose EU Court Challenges Over Antitrust Fines
Coats Holdings Plc, the world’s biggest maker of industrial threads, and YKK Corp. lost court challenges against European Union antitrust fines for fixing the price of fasteners such as zippers, rivets and snaps.
The EU’s General Court backed the European Commission’s fines of 150 million euros ($187 million) for YKK, based in Tokyo, and 110 million euros for Coats in 2007 over cartels involving fasteners and related machinery, one of which ran for more than 21 years. The EU said at the time that the zipper market was worth about 400 million euros a year and the market for other metal fasteners was worth 200 million euros.
“There is no need, in the circumstances of the case, for the court to exercise its unlimited jurisdiction to adjust the amount of the fine,” the Luxembourg-based tribunal said in two separate rulings on each company’s appeal.
Guinness Peat Group Plc (GPG)’s Coats unit, based in Uxbridge, said it was “extremely disappointed with the court’s decision” and the company’s lawyers were considering an appeal to the region’s highest court, the European Court of Justice.
Coats will provide for 93 million euros of the fine in results for the six months ending June 30, the company said in a statement. It will treat 65 million euros as an exceptional item within operating profit and 28 million euros as an exceptional interest cost.
The company said it has “more than adequate banking facilities to allow it pay the fine” after it refinanced senior debt facilities last year to cover an unfavorable judgment. It has already provided for 45 million euros of the 138 million- euro cost of the fine, which includes 28 million euros of interest from the date of the EU decision.
Coats is challenging 110 million euros of the 122 million- euro fine imposed in 2007. Five years ago, it won a court reduction for a separate 2004 fine for fixing the price of sewing needles. The 30 million-euro penalty was reduced to 20 million euros by an EU court in 2007 because regulators hadn’t proved that Coats participated in the cartel after 1997. Coats was also fined in 2005 for colluding to fix the price of industrial thread.
Berning + Sohne GmbH & Co. KG, a privately held company based in Wuppertal, also lost a court challenge today to its 1.1 million euro fine.
YKK and Berning + Sohne didn’t immediately respond to an e- mail seeking comment.
To contact the reporter on this story: Aoife White in Brussels at firstname.lastname@example.org
To contact the editor responsible for this story: Anthony Aarons at email@example.com