Rubber chemical price fixing alleged as probe widens
Doug Smock -- Purchasing, 7/15/2004 2:00:00 AM
Goodyear Tire & Rubber Co., the world's largest tire company, filed suit alleging price fixing and anticompetitive behavior against 12 companies in the United States and Europe. The suit, filed in federal court in Akron, Ohio, said the companies violated the Sherman antitrust Act on sales of EPDM (ethylene propylene diene monomer), a synthetic rubber product.
A press release announcing the suit was one of two recent public signs that significant federal investigations are taking place into possible chemical industry price fixing.
Goodyear's lawsuits did not specify a damage amount. The company's lawyers said damages would be determined during the course of the lawsuit. Companies sued were Bayer A.G., Leverkusen, Germany; Bayer Polymers, Pittsburgh; Bayer Corp., Pittsburgh; Compton Corp., Middlebury, Conn.; Uniroyal Chemical, Middlebury, Conn.; Dow Chemical, Midland, Mich.; DuPont, Wilmington, Del.; DuPont Dow Elastomers, Wilmington, Del.; DSM Elastomers, Sitterb, the Netherlands; DSM CoPolymer, Baton Rouge, La.; Polimeri Europa, Milan, Italy; and Polimeri Europa Americas, Houston.
There were published reports of broadening probes of chemical industry price-fixing that date back about two years. Other chemicals involved are said to include polyurethane and neoprene, another type of synthetic rubber. Specific suits allege that chemical companies artificially induced tight markets by reducing production capacity. One of the breakthrough cases in the United States was a settlement with Compton Corp. over charges involving chemicals used as rubber additives. See www.purchasing.com article archives, May 6, 2004.
In Europe, 43 producers of plastic bags for industrial use are under investigation for possible price fixing.
Authorities said the large number of price fixing cases are being triggered by growing use of amnesty grants that encourage whistle blowing. Criminal penalties can be reduced for companies that cooperate with investigators.
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