EC Hits Pill Cartel With $750M Fine

BRUSSELS, Belgium -- The European Commission delivered a bitter pill to the world's top vitamin makers Wednesday, ordering them to pay a record 855 million euros ($750 million) in fines for operating a price-fixing cartel.

In a move that raised the firms' global liability to 3 billion euros, the commission said it was the gravest violation of the EU's anti-monopoly laws.

"This is the most damaging series of cartels the commission has ever investigated due to the sheer range of vitamins covered," EU Competition Commissioner Mario Monti said in announcing the record fine.

The fines are on top of more than $2.1 billion the conspirators have paid in the United States to the federal government, individual states and private plaintiffs -- and the suits there are not over.

The commission named Roche of Switzerland as the cartel ringleader and fined it 462 million euros. Its top follower was BASF of Germany, which was fined 296 million euros.

The conspirators met secretly in a series of cartels that involved vitamins A, B1, B2, B6, D3, C, E, Beta Carotene and vitamin premixes found in everyday goods like cereals, biscuits, juices, milk, animal feed, pharmaceuticals and cosmetics.

Monti said the cartel added to consumers' costs of every product containing vitamins and to the bottom line of the cartel participants, especially Roche, which had 50 percent of the overall market.

Roche said in a statement it had worked closely with the EU Commission "since the [price-fixing] agreements became known." It was Roche's second offence, after it was fined in the United States in 1997 for an earlier vitamin cartel.

Roche said more than 8,000 of its managers had taken part in a training program to ensure they followed national and international laws, especially anti-monopoly laws.

The firm that worked most closely with the commission was Aventis of France, which blew the whistle on Roche and the others.

The commission said Aventis was granted full immunity in regard to its participation in the cartel in vitamins A and E because it was the first company to cooperate with the EU's executive and provided decisive evidence in the case of these two products.

But Aventis did not give the commission evidence on all vitamins. It was fined 5.04 million euros for passive participation in the vitamin D3 infringement.

Other firms facing fines are Solvay of Belgium -- 9.1 million euros, Merck KGaA of Germany -- 9.24 million euros, and Japan's Daiichi Pharmaceutical Co. Ltd. -- 23.4 million euros, Eisai Co -- 13.23 million euros, and Takeda Chemical Industries -- 37.05 million euros.

The new European Union fine exceeds that imposed on the Trans-Atlantic Conference Agreement of ocean shippers in 1998, which totaled 272.9 million euros.

Both Roche and BASF said they were considering whether to appeal. If they appeal, the firms need bank guarantees for their fines and will owe interest if they lose.

It took the European Commission 2 1/2 years to reach its decision after the United States acted.

Monti said such probes could be streamlined if the United States and EU had agreements to share confidential information. But the commission first has to work out trades of confidential information among the 15 EU member states.

"I see this as a longer term, ambitious, not particularly easy objective," he said of a U.S.-EU agreement to share confidential data.