Three recycling companies fined for alleged participation in a pricing cartel

By Paul Ploumis

SEATTLE (Scrap Monster): The European Commission (EC) has fined three battery recycling companies for indulging themselves in a price fixing cartel. The three companies will have to pay fines amounting to US$ 72.4 million in total. The EC had sent complaints to five companies altogether. The fourth company was avoided from fines upon revealing the cartel. The commission had decided not to pursue investigation against the fifth company.

The three companies that were fined for their alleged involvement in the price fixing cartel are Belgium-based Campine, the UK-based Eco-Bat Technologies and France-based Recylex. The US-based Johnson Controls was also party of the EC investigation, but was not fined after it revealed the existence of the cartel. The EC press release alleged that all the above four companies were found involved in conspiring to lower their purchase prices paid to scrap metal recyclers for used automotive batteries during the period from 2009 to 2012 in Belgium, France, Germany and the Netherlands, which in turn led to huge boost in profits for these companies during the period under observation.

The Commission started the investigation in 2012. By the end of the year, it carried out inspections at several company premises. Formal complaints along with statement of objections were sent to five companies. However, based on evidence, the Commission withdrew from carrying out investigation against the fifth company. The investigations revealed that these companies exchanged information and reached agreements on the volume and price to buy scrap automotive batteries from recyclers. A good majority of contacts took place on a bilateral basis, mainly through telephone calls, emails, or text messages exchanged between senior managers. In most cases, code language was used to keep the secret nature of the contacts.

According to EC, this cartel has undermined competition, thereby preventing real competitive prices to collectors and traders for their goods. Incidentally, these recycling companies who purchase used automotive batteries from scrap dealers or scrap collectors often processes and treats them to recover recycled lead, which are then sold to battery manufacturers, who in turn use them in manufacture of new car batteries. Margrethe Vestager, EC Commissioner in charge of competition policy, issued a statement urged all involved parties to not promote any form of cartel that could damage the circular economy. Preventing and punishing cartels is one of the Commission’s top priorities, Vestager affirmed.

The EC fined Eco-Bat Technologies a sum of $35 million. Recylex and Campine were fined $28.5 million and $8.7 million respectively. The fair fines were arrived by applying 10% increase on the average amount of purchases by these companies. Johnson Controls avoided a fine of nearly $41 million by receiving full immunity from the Commission. Meantime, EC made it clear that any person or company affected by anti-competitive behavior is eligible to seek damages before the courts of the Member States.