Commossion Fines Producers of Steel Abrasives € 30.7 Million in Cartel Settlement

iAbrasive, a global e-commerce trading platform providing various abrasive products, announces today that four enterprises were fined by the European Commission for participation in a cartel to coordinate steel abrasives’prices for over six years.

The European Commission has found that Ervin, Winoa, Metalltechnik Schmidt and Eisenwerk Würth participated in a cartel to coordinate prices for steel abrasives in Europe for over six years and has imposed fines totalling € 30 707 000. Steel abrasives are loose steel particles used for cleaning or enhancing metal surfaces in the steel, automotive, metallurgy and petrochemical industries. They are also used for cutting hard stones such as granite and marble. Ervin was not fined as it benefited from immunity under the Commission's 2006 Leniency Notice for revealing the existence of the cartel to the Commission. Since all four undertakings agreed to settle the case with the Commission, their fines were reduced by 10%.

Commission Vice President in charge of competition policy, Joaquin Alumina, said: "The cartel in steel abrasives is yet another example of how the cartelization of a particular input product may affect a wide range of European industries. Defeating cartels is a key precondition of the efficient functioning of markets and, ultimately, of the competitiveness of the EU economy as a whole. "

For more than 6 years, with varying durations from autumn 2003 until the Commission carried out unannounced inspections in June 2010, the cartelists had contacts on a bilateral and multilateral basis to discuss key price components of their sales in the whole European Economic Area (EEA). iAbrasive reports.

iAbrasives also analyzes that metal scrap, the main raw material for steel abrasives, is characterized by sharp price fluctuations as well as significant price differences between the EEA countries. To compensate for such fluctuations, the cartel participants set up a specific surcharge (called the "scrap surcharge" or "scrap cost variance (SCV)") based on a common formula. When energy prices rose sharply in 2008, the cartel members agreed that they would all introduce at the same time an "energy surcharge" or "energy complement". In addition, the cartelists agreed not to compete against each other on price with respect to individual customers.

In the context of the same investigation, the Commission had also opened proceedings against Pometon S.p.A. and the investigation will continue under the standard (non-settlement) cartel procedure for Pometon.