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Office of Competition and Consumer Protection

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Cement cartel smashed

< previous | next > 10.12.2009

Cement cartel smashed

Maximum fines amounting to PLN 411 million have been imposed by the President of the Polish Office of Competition and Consumer Protection (UOKiK) on the biggest producers of cement in Poland, participating in the cartel on the construction market. As a result of the precedential investigation, the President of UOKiK established that 7 companies were engaged in the market sharing and price fixing practices for over 11 years. Two companies decided to blow the whistle on the cartel. The legal basis of the proceedings were both national and European law (article 81 TEC).

Illegal agreements are very often concluded on the construction market. The sector is carefully observed by the European Commission, which carried out the wide-ranging inspections of the undertakings operating on the market in a couple of member states in 2008 and in Spain in 2009. In 1994 in a record decision, the Commission fined 42 undertakings from 16 countries taking part in pan-European agreement consisting in market sharing.

In consequence of multiple signals from the market, followed by robust inquiries conducted by UOKiK, on the 28th of December 2006 the President of the Office instituted antimonopoly proceedings and examined alleged anticompetitive agreement concluded by the producers of grey cement - Lafarge Cement, Górażdże Cement, Grupa Ożarów, Cemex, Dyckerhoff, Cementownia Warta and Cementownia Odra – the combined market share of which amounted to almost 100 percent.

As a result of the 3-year long investigation, as well as the biggest dawn-raid in the history of UOKiK, a robust evidence had been collected, which was subsequently completed by the information furnished by the undertakings involved in the agreement. On the basis of this evidence, the President of the Office concluded that at least from 1998 the undertakings were sharing the national market for grey cement, when agreeing on freezing the market shares of each company, as well as fixing minimum prices of the cement, the timetables, the amounts and the order of applying the increases in prices for cement. To this end, during numerous multilateral and bilateral meetings the producers were exchanging confidential commercial information, inter alia on the sales volumes. The investigation showed, that the cartelists did realize that the practices they were engaged in were illegal. They selected a limited number of persons directly taking part in the information exchange, as well as a coordinator of the information exchange (an employee of one of the producers). The coordinator was responsible for passing on the data to the cement producers and contacting selected employees of the cement mills via a pre-paid telephone.

Upon the provisions of the Polish antimonopoly law, the maximum fine that can be imposed on the undertaking amounts to 10 percent of the revenue earned in the accounting year preceding the year within which the penalty is imposed. Since two leniency applications were filed in the case, the President of UOKiK refrained from imposing a fine on the Lafarge Cement and imposed a fine amounting to only 5 percent of the revenue earned in 2008 on Górażdże Cement. Remaining cartelists – Grupa Ożarów, Cemex, Dyckerhoff, Cementownia Warta and Cementownia Odra – were fined with the maximum penalties possible, totaling to PLN 411 586 477. This is the highest fine ever imposed in the 20 years history of UOKiK.

The producers have the right to appeal the decision to the Court of Competition and Consumer Protection within 2 weeks from the date of delivering the decision.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]

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