Transnational Antitrust—Chemical Industry

The US Department of Justice’ Antitrust Division [hereinafter AD] really does seem to be aggressively expanding its prosecution of foreign companies which are suspected of engaging in antitrust behavior. Guilty pleas have been secured against Belgian and Dutch companies for participating in a chemical industry price-fixing conspiracy.^[1]

According to the AD, Solvay S.A., a Belgian company, and Akzo Nobel Chemicals International B.V., a Dutch company, have pleaded guilty and acceded to pay more than US$72 million in criminal fines “for their participation in international price-fixing cartels in the chemicals industry.”^[2] These guilty pleas are the “first charges as a result of the [AD]'s ongoing antitrust investigations into the hydrogen peroxide and sodium perborates industries.”^[3] Akzo Nobel will pay a US$32 million fine for conspiring to fix the prices in the hydrogen peroxide market, while Solvay will pay a US$40.8 million fine for conspiring to fix prices in both the hydrogen peroxide market and the sodium perborates market.^[4] The two companies’ roles “affected nearly [US]$350 million in United States commerce.”^[5]

One of the conspirators’ victims was Proctor & Gamble, and Thomas O. Barnett, Assistant Attorney General in charge of the AD, mentioned that “Protecting consumers from international price-fixing cartels is the Division’s highest priority.”^[6] This statement is potentially very interesting. If he meant exactly what he said, then the AD focuses most of its energy looking abroad, making international price-fixing more important than domestic cartels. This lends greater support to our assertions that the US is undergoing an aggressive expansion of its extraterritorial jurisdiction. (If Mr. Barnett actually meant that price-fixing cartels in general are the highest-priority targets, but just threw “international” into the mix to spice things up, then it’s just business as usual at the AD.) Two weeks ago, we discussed antitrust investigations in the DRAM market.

Hydrogen peroxide is well-known for its wound-cleansing attributes, but it also “has multiple industrial uses, including applications in the electronics, energy production, mining, cosmetics, food processing, textiles and pulp and paper manufacturing industries.”^[7] Sodium perborate is used to bleach, cleanse, and deodorize, primarily being found in detergents, but also in toothpaste, hair care products, and topical antiseptics; it is also used as a reactive agent in chemical processes.^[8]

As part of their guilty plea, the companies have agreed to cooperate in the investigation.^[9]

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[1] AD, Belgian and Dutch Companies Agree to Plead Guilty to Participating in Chemical Industry Price-Fixing Conspiracies, Mar. 14, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Id.
[9] Id.