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European Commission Fines ?Paraffin Mafia? ?676 Million

By Ethisphere.com

The European Commission announced on Wednesday that it had levied the fourth largest fine against a cartel in the history of the EU. This time, it came out to ?676 million and went against the wax industry. This means the wax industry is just below the elevator industry, the vitamin industry and the switch gear industry in the European cartel fine power rankings.

The wax cartel has been operating since 1992, meeting in “top hotels” across Europe between then and 2005. Neelie Kroes, the EU Competition Commissioner, said, “There is probably not a household or company in Europe that has not bought products affected by this ‘paraffin mafia’ cartel, with all that implies in terms of paying over the odds, higher costs and economic damage.”

Of the nine companies involved in the fine, South Africa’s Sasol was burdened with the largest percentage, nearly 50 percent, because the EC deemed it the ringleader. The next largest fine, ?128.1 million, was slapped on France’s Total. ExxonMobil landed third place with ?83.6 million. The rest was divvied up between Spain’s Repsol; Italy’s Eni; Germany’s Tuda-petrol, Hansen & Rosenthal and RWE; and Hungary’s MOL.

Shell was given immunity because it blew the whistle on the group, avoiding a potential fine of ?96 million.

Sasol said if it found grounds to appeal the fine, it would. Apparently the company feels it has enough information to do so, as CEO Pat Davies said, “As we see things now, we intend to appeal.” However, appealing may not be enough to rid the companies of any and all financial damage, as the EC encouraged individuals or companies who were victims of the cartel to seek damages as well.

Full post as published by Ethisphere Blog - Good. Smart. Business. Profit. on October 03, 2008 (boomark / email).