Risk & Compliance

EU Fines Dow, Four Others

Dow was among the industrial giants caught by Europen regulators in a price-fixing scheme.
Stephen TaubNovember 29, 2006

The European Commission fined five companies a total of $682 million for fixing the price of synthetic rubber used to make tires, including U.S.-based Dow Chemical, according to the Associated Press. The other four companies were Royal Dutch Shell plc, Eni SpA, Unipetrol AS and Trade-Stomil, according to the report.

The fine was the second-largest ever levied on a group of companies running a cartel, noted the wire service. The five companies are being punished for fixing prices and sharing customers for certain types of synthetic rubber known as butadiene rubber and emulsion styrene butadiene rubber from 1996 to 2002, added AP.

Bayer AG initially blew the whistle on the scheme, so it received full immunity from EU regulators, said the report. Italy’s Eni and British-Dutch oil company Shell, on the other hand, had their fines raised by half because they are repeat offenders.

Dow was fined $84.8 million. What’s more, it received a 40 percent reduction for supplying regulators with information confirming Bayer’s claims. Interestingly, this is consistent with the policy of U.S. regulators, who have recently rewarded targets of probes for cooperating. “The fines are so high because it’s a large market and several of the companies are repeat offenders,” EU spokesman Jonathan Todd told the AP.