Sat. Aug 13th, 2022

Brussels, 12 July 2022

The European Commission has fined Crown and Silgan a total of €31.5 million for participating in a cartel concerning sales of metal cans and closures in Germany. Both companies admitted their involvement in the infringement and agreed to settle the case.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said:

“Metal food cans and closures are part of every household’s pantry. We fine today Crown and Silgan for illegally exchanging sensitive business information and coordinating their commercial strategies at a time when the industry has been transitioning towards less harmful metal cans and closures.”

The infringement

The products concerned by the cartel are metal closures otherwise called ‘lids’, coated with BPA-free lacquers or BPA-containing lacquers which are predominantly used to close glass jars containing foods such as marmalade, vegetables, fruit, meat or fish as well as metal cans also referred as ‘containers’ coated with BPA-free lacquers which are used to pack, transport and stock sterilised foods such as vegetables, fruit, meat, fish or juice.

The Commission investigation revealed the existence of one infringement consisting of two parts:

  • First part: Regular exchanges between Crown and Silgan of detailed data on their most recent past annual sales volumes of metal closures to their individualized customers in Germany. This high level of transparency gave each company a solid basis for its future commercial strategy regarding a large number of German customers.
  • Second part: Coordination between Crown and Silgan to: (i) impose a surcharge; and (ii) apply shorter minimum durability recommendation concerning metal cans and closures coated with BPA-free lacquers. The parties kept each other informed of their commercial strategies which allowed them to adapt their market behaviour and competitive efforts on the markets for metal cans and closures coated with BPA-free lacquers in Germany.

The Commission’s investigation revealed the existence of a single and continuous infringement spanning from 1 March 2011 to 18 September 2014. The following table details the participation and the duration of each company’s involvement in each of the two parts of the infringement:

 

Infringement Undertakings Scope Start End
First Part Crown, Silgan Metal closures 11 March 2011 21 March 2014
Second Part Crown, Silgan BPA-NI metal cans and BPA-NI metal closures 18 April 2013 18 September 2014
Duration of the entire infringement Crown, Silgan Metal closures, BPA-NI metal cans and BPA-NI metal closures 11 March 2011 18 September 2014

 

Fines

The fines were set on the basis of the Commission’s 2006 Guidelines on fines (see also MEMO).

In setting the fines, the Commission took into account in particular, the serious nature of the infringement, its geographic scope and its duration.

Under the Commission’s 2006 Leniency Notice, Crown benefited from a 50% reduction of the fine for its cooperation with the Commission’s investigation. The reduction reflects the timing of its cooperation and the extent to which the evidence they provided helped the Commission prove the existence of the cartel in which it were involved.

In addition, under the Commission’s 2008 Settlement Notice, the Commission applied a reduction of 10% to the fines imposed on the companies in view of their acknowledgment of their participation in the cartel and of their liability in this respect.

The breakdown of the fines imposed on each company is as follows:

 

Company Reduction under the Leniency Notice Reduction under the Settlement Notice Fine
Crown 50% 10% 7 670 000€
Silgan 10% 23 852 000€

 

Background

Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the European Economic Area Agreement prohibit cartels and other restrictive business practices.

The Commission’s investigation started upon request of the German Competition Authority (‘Bundeskartellamt’). Following an initial investigation, the Bundeskartellamt referred the case to the Commission as the German law applicable at the time did not allow it to sanction Crown and Silgan’s subsidiaries, which had been dissolved or reorganised prior to the conclusion of the Bundeskartellamt’s investigation. This loophole in German antitrust law has since been closed by § 81a of the 9th Amendement of the Gesetz gegen Wettbewerbsbeschränkungen.

Due to the risks to public health related to the presence of BPA in foodstuffs, as of September 2018, the use of BPA in varnishes and coatings on materials intended to come into contact with foods for human consumption was severely restricted by Commission Regulation 2018/213 and led in practice to the use of BPA-free lacquers.

More information on this case will be available under case number AT.40522 in the public case register on the Commission’s competition website once confidentiality issues have been resolved. For more information on the Commission’s action against cartels, see its cartels website.

The settlement procedure

Today’s decision is the 39th settlement since the introduction of this procedure for cartels in June 2008 (see press release and MEMO). In a cartel settlement, parties acknowledge their participation in, and their liability for it. Cartel settlements are based on Antitrust Regulation 1/2003, and allow the Commission to apply a simplified and shortened procedure. This benefits consumers and taxpayers as it reduces costs. It also benefits antitrust enforcement as it frees up resources to tackle other suspected cartels. Finally, the parties themselves benefit in terms of quicker decisions and a 10% reduction in fines.

Whistleblower tool

The Commission has set up a tool to make it easier for individuals to alert it about anti-competitive behaviour while maintaining their anonymity. This tool protects whistleblowers’ anonymity through a specifically-designed encrypted messaging system that allows two way communications. The tool is accessible via this link.

Action for damages

Any person or company affected by the anti-competitive behaviour described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the cartel participants concerned, damages may be awarded without being reduced on account of the Commission fine.

The Antitrust Damages Directive, which the Member States had to transpose into their legal systems by 27 December 2016, makes it easier for victims of anti-competitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.

Source – EU Commission