CADE fines Solvay for sodium perborate cartel

On the judgment session of February 24 2016, the Administrative Council for Economic Defense – CADE - condemned Solvay S/A for its participation in a cartel in the sodium perborate market. The case was closed in relation to two of Solvay´s employees, because of the lack of proofs against them.

The fine applied is of BRL 17,4 million. The amount has taken into consideration the estimate of the advantage sought by Solvay with the infraction.

Sodium perborate is a chemical compound derived from the hydrogen peroxide, used for textile bleaching and for the fabrication of powder detergent for white clothes.

According to the commissioner rapporteur of the case, João Paulo de Resende, between the beginning of 1999 and the end of 2001, the companies Solvay and Degussa Aktiengesellschaft made agreements to share the sodium perborate market due to a change of positions on the supplying to Uniliver in the United Kingdom and in Brazil. It was established that Degussa would not provide anymore the product to Unilever in the United Kingdom, in order to provide it to Brazil. Meanwhile, Solvay would not supply anymore Unilever in Brazil, in order to attend the company in the United Kingdom.

“The conduct lasted three years and affected the entire national market, which was completely based on imports. So, I understand this is a huge infraction”, said the commissioner.

Leniency

The investigation of the cartel in the sodium perborate market begun in 2006, because of the signature of a leniency agreement between CADE and the companies Evonik Degussa GmbH, Evonik Degussa Brasil Ltda. and one individual that reported the infringement.

This kind of agreement allows the reduction or the extinction of the penalty to the cartel participant who reveals the anti-competitive conduct and presents evidence that prove the illicit.

On the judgment session of February 24 2016, the Council extinguished the punishment for the leniency agreement beneficiaries.

“The lenient companies shared information and documents, which assisted on the comprehension of the facts related to the cartel, collaborating with what was requested”, explained the commissioner.

Investigation in other countries

The market division between Solvay and Degussa affected Brazil directly and operated in a context of an international cartel of sodium perborate also investigated by competition authorities of the United States and Europe. In these jurisdictions, the investigation in this market occurred together with the investigation in the market of hydrogen peroxide. In both cases, Solvay was condemned or made agreements, assuming its guilt for the participation in the illicit acts.

In Brazil, CADE´s Tribunal condemned the sodium perborate cartel in 2012. The fine applied to the company Peróxidos do Brasil Ltda. – a Solvay´s subsidiary - and to individuals related to it, amounted to approximately BRL 150 million.