Procter & Gamble and two of its competitors have been involved in a cartel settlement procedure

At the end of this procedure, the Commission imposed reduced fines on three major European washing powder producers for operating a cartel that involved stabilizing market positions and coordinating prices over three years.

Under the guise of a common trade association initiative aimed at improving environmental performances of detergent products, Procter & Gamble, Unilever and Henkel were coordinating prices and operating other anti-competitive practices between 2002 and 2005 in eight different Member States, including Belgium.

The Commission investigation started when Henkel applied for leniency by reporting the cartel to the Commission. For the record, on the basis of the leniency notice, the Commission grants immunity to any undertaking disclosing its participation in a cartel. Therefore, no fines were imposed on Henkel.

Procter & Gamble and Unilever also applied for leniency. Their active cooperation during the investigation earned them, respectively, a 25% and a 50% reduction in the fine.

Furthermore, under the settlement procedure, by agreeing to the evidence found by the Commission, the parties can help to reduce the length of the Commission investigation and hence be granted another fine reduction. Therefore, since the parties helped in establishing the case with the Commission, the fines were further reduced by 10%.

After these several reductions in fines, the amount of the Procter & Gamble and Unliver total fine was EUR 315.2 million. For your information, in accordance with the EU guidelines on fines, the fine’s amount is determined after applying the following two-step reasoning: a basic amount is first calculated for each undertaking on the basis of the value of the sales to which the violation relates; second, this basic amount is adjusted according to gravity and length criteria.

On this occasion, Joaquin Almunia, the commissioner responsible for competition, stated that cartels were “the worst violation of competition rules by extracting higher prices from consumers than they would pay when companies compete fairly and on the merits”.