Cartels Update: European Commission Imposes €255 Million in Freight Forwarders and Window Mountings Cartels – Associations and Code-names Used to Conceal Arrangements
Yesterday was a banner day for the European Commission, which imposed a total of €255 million against parties in the freight forwarders and window mountings cartels.
In the freight forwarders cartel, the Commission fined 14 international groups of companies a total of €169 million for participating in four cartels between 2002 and 2007 to fix the prices and other trading conditions for international freight forwarding services.
Interestingly, the parties in this case took rather elaborate and colourful steps to conceal the cartel, organizing their contacts in a so-called “Gardening Club” and using code-names based on vegetables (e.g., asparagus and baby courgettes) when the parties talked about fixing prices. The parties also set up a specific Yahoo e-mail account to facilitate the cartel and information exchanges between them.
In the window mountings cartel, nine producers of window mountings were fined a total of €86 million for operating a cartel in which the parties agreed to common price increases.
This cartel was formed and maintained through regular trade association meetings in Germany, which were called the “Permanent Conference”. On the fringes of association meetings, the parties set price increases for the following year (or agreed to surcharges for raw material costs). The cartel also involved periodic monitoring and information exchanges to maintain the agreement, through meetings and through the parties’ local sales representatives.
For the Commission’s news releases see: Antitrust: Commission imposes 169 million fine on freight forwarders for operating four price fixing cartels and Antitrust: Commission fines nine producers of window mountings 86 million for price fixing cartel.
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