European battery recycling cartel fined €68m

Three recycling companies have been fined a total of €68 million (£58 million) by the European Commission for their roles in a cartel operation that enabled them to pay less for used automotive batteries, and “undermine the circular economy”.

Battery recycling cartel fined €68m
From 2009 to 2012, Belgian company Campine, British firm ECOBAT Technologies and France-based Recyclex conspired to drive down the purchase prices of used car batteries sold to them across several EU member states. A fourth company involved in the cartel, US-based Johnson Controls, avoided being fined by revealing the existence of the cartel to the commission. 

Used car batteries are the most recycled consumer product in the European Union, with over 50 million recycled in the EU each year – nearly 99 per cent of automotive batteries in the EU are recycled. Used batteries, which can be bought from scrap dealers, garages and waste disposal sites, are bought by recycling companies such as those involved in the cartel. The companies treat the used batteries and sell recycled lead, usually to battery manufacturers, who then use it to make new car batteries.

The companies involved in this cartel, however, paid reduced prices to obtain used batteries from suppliers by agreeing to lower the prices they paid, setting target prices, maximum prices and volumes to buy from suppliers. They also exchanged information on the prices suppliers had offered or on final prices they had agreed with them.

The commission says that by coordinating to lower the prices they paid for scrap batteries, the four companies disrupted the normal functioning of the market and prevented competition on price. Competition Commissioner Margrethe Vestager noted in a statement today (8 February) that many of the suppliers the companies bought from were small and medium-sized enterprises.

Cartel brought down by whistleblower

Communication between cartel members took place mainly by phone, email and text message, although some face-to-face meetings did take place. To hide their illegal activity, code words were used to disguise the nature of the conversations, including allusions to the weather to reflect drops and increases in prices.

The companies’ activities were found to be in direct violation of EU antitrust legislation prohibiting cartels and other restrictive business practices. By acting in this way, the cartel not only deprived businesses of profit, but also undermined the process of the circular economy. Setting the prices through collusion meant there was no competition on the merits or real competitive price setting for used automotive batteries.

The scheme was uncovered when cartel member Johnson Controls approached the commission in June 2012, disclosing the cartel’s activities in exchange for immunity. An investigation was launched in September 2012, with the commission initiating proceedings against the companies in June 2015. 

Battery recycling cartel fined €68m
Competition Commissioner Margrethe Vestager
Now, having found the companies guilty, the commission has imposed fines of €68 million between the three. While the majority of cartels usually collude over sales prices, enabling fines to be worked out based on the sales affected, the fines in this instance had to be worked out using the companies’ purchases, which were the subject of collusion.

However, as the figure was likely to be lower than it would have been without the cartel holding the prices down, the commission used its discretionary powers to increase the fines by 10 per cent, ensuring they acted as a sufficient deterrent. For two of the companies, Recyclex (€26.7 million) and ECOBAT Technologies (€32.7 million), the fines were reduced by 30 and 50 per cent respectively, in acknowledgment their cooperation in the investigation. Campine was made to pay a fine of €8.15 million. The commission noted that by informing the authorities of the scheme, Johnson Controls avoided a fine of €38.5 million.

In a statement responding to the fines, British company ECOBAT Technologies said it was considering an appeal: 'The fine of €32.7 million will be borne by Eco-Bat’s German and French subsidiaries, Berzelius Metall GmbH, and Société de Traitements Chimiques des Métaux SAS. Eco-Bat is reviewing the decision and has not yet determined whether it will appeal any aspects to the General Court of the European Union.'

Anticompetitive behaviour damaging circular economy will not be tolerated

Speaking after the fines were announced today, Commissioner Vestager said: "Well functioning markets can help us reduce waste and support the circular economy. Therefore, we do not tolerate behaviour that undermines competition. The four companies fined today have colluded to maximise their profits made from recycling scrap batteries, reducing competition in this essential link of the recycling chain.”

In her final remarks she added: “All cartels undermine competition, and make our markets work less well. That happens no matter whether they fix selling prices or purchase prices. Today's fines send out a clear message that we will not tolerate cartels or anticompetitive behaviour that could damage the circular economy.”

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