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General Superintendence recommends condemnation of sodium perborate international cartel

Cartel

The anticompetitive conduct took place between September 1998 and December 2001
published: Jul 30, 2015 02:50 PM last modified: Apr 15, 2016 04:52 PM

The General Superintendence of the Administrative Council for Economic Defense - CADE recommended, in an opinion published in the Official Gazette of 30 July 2015, the condemnation of Grupo Solvay for an international cartel in the market of sodium perborate with effects in Brazil (Administrative Proceeding no. 08012.001029/2007-66).

Sodium perborate is a chemical compound derived from hydrogen peroxide, used for fabric whitewash and for the manufacturing of laundry detergents for white clothes.

According to the technical opinion issued, the anticompetitive conduct occurred between September 1998 and December 2001. During that period, the main producers of hydrogen peroxide and sodium perborate held frequent meetings to exchange sensitive information and to make collusion agreements in several countries.

For the General Superintendence, the cartel had effects in the national market because manufacturing plants of sodium perborate in Brazil were inexistent at the time, and national demand was entirely fulfilled by imports.

Furthermore, during the investigation it was verified that the companies Solvay and Degussa signed bilateral agreements, one of which involving Brazil. The agreement consisted of swapping of the Brazilian and British markets regarding the supply of sodium perborate for Unilever, the main Brazilian customer. It established that Degussa would stop supplying Unilever in the United Kingdom to supply it only in Brazil, whereas Solvay would stop supplying it in Brazil to supply it only in the UK.

The supply proposals presented to Unilever were previously arranged between the colluded companies in order to forge competitive conditions, since they would present prices and selling conditions independently.

The Administrative Proceedings regarding to employees of Solvay were filled for lack of evidence of their participation as representatives of the colluded companies.

Investigations abroad – the cartel was also investigated by competition authorities in the United States and Europe. In those jurisdictions the assessment of the conduct occurred jointly in the markets of sodium perborate and hydrogen peroxide.

In Brazil, the hydrogen peroxide cartel was condemned by CADE’s Tribunal in 2012, which imposed a total of BRL 150 million in fines to the company Peróxidos do Brasil Ltda., and several individuals related to it.

The case of the sodium perborate cartel will be now judged by CADE’s Tribunal, which is responsible for a final decision. If condemned, the company is subject to fines of 0,1% to 20% of its turnover, among other penalties provided by the Law.