Cartel in the resin market is fined 46.8 million reais

On 23 March 2022, the Administrative Council for Economic Defense (CADE) convicted the firms Royal Química and Cempre Apoio Educacional, in addition to five individuals related to the companies, for cartel practice in the Brazilian market of resin.  The fines imposed amount to BRL 46.8 million.

The practice affected the markets of resin for coatings and composites. The coating industry employs resin to manufacture products such as wall paints, whilst the composite industry uses the material in the production of water tanks, swimming pools, and laminates for the marine and automotive industries.

The administrative proceeding was launched in May 2016 as a result of a leniency agreement signed in 2014 with companies of the Reichhold group. Also in 2016, CADE conducted search and seizures at the office of the other investigated companies.

According to the rapporteur of the case, Commissioner Lenisa Prado, the involved parties restricted market competition by fixing the price of resin and sharing competitively sensitive information. Such anticompetitive conduct occurred at least between 2000 and 2014. The rapporteur stated the conduct lasted more than a decade, resulting in severe harm to competition, customers, and the economy.

The fines applied amount to BRL 43.3 million for the convicted companies and BRL 3.4 million for the five individuals involved in the case.

Agreements

Since the beginning of the probe, the investigated companies and some of their employees have signed eight cease and desist agreements with the antitrust authority. The signatories of the leniency agreements admitted their participation in the anticompetitive conduct and committed to cease the practice and collaborate with CADE's enquiry.

The Tribunal dismissed the case in relation to nine companies and its employees that signed the agreement with the authority. The cease and desist agreements executed with CADE accounted for more than BRL 78.9 million in financial contributions to the Fund for the De Facto Joint Rights.

Since the obligations have been met, the Tribunal granted immunity from prosecution to the companies of the Reichhold group that signed a leniency agreement.

Access Case no. 08700.003718/2015-67