Germany’s Federal Cartel Office has imposed a total fine of 210 million euros on five aluminum forging companies and three steel forging companies for taking part in anticompetitive agreements designed to distort normal competition in the relevant market.
Libra offers companies that have purchased aluminum or steel products resulting from the forging process to join a class action aimed at obtaining compensation for damages caused by the cartel.
CONDUCT
On Dec. 21, 2020, the German Federal Cartel Office (FCO – Bundeskartellamt) imposed fines totaling 175 million euros on five aluminum forging companies and ten employees responsible for participating in anticompetitive agreements.
The investigations conducted found that from April 2006 to April 2018, the representatives of aluminum forging companies exchanged information on individual procurement costs, rising costs of aluminum and its processing, and entered into agreements aimed at passing on the rising prices to their customers.
On Feb. 4, 2021, the FCO returned again, imposing fines totaling 35 million euros on three steel forging companies and two employees for exchanging anti-competitive information.
From October 2002 to December 2016, these companies regularly exchanged sensitive information, particularly on prices and specific negotiations with suppliers and customers.
EFFECTS
The price agreements described above and the exchange of strategic information, both in the aluminum forging market and in the steel forging sector, have severely restricted competition and regularly led to price increases, to the detriment of both direct and indirect buyers.
Indeed, according to a study by eminent economists commissioned by the European Commission (“Oxera study”), the average price increase induced by the anti-competitive agreement is about 20 percent of the cartel price.
The price increase induced by the cartel may distort the market price of even those suppliers not belonging to the cartel (so-called “umbrella effect”) and may be passed through different market levels, for example from dealers/service points to customers (so-called “passing-on effect”).
For such conduct, companies that purchased steel and aluminum in the years from 2002 to 2018 may be affected and may be entitled to compensation for the damage suffered.
Libra proposes to such companies, potentially damaged, a free assessment of the damage and, if established, a shared strategy for recovery with priority mainenance of the supply relationship, where strategic.
In any case, the recovery action will have no risk or advance costs borne by the damaged company.
In addition, Libra may consider acquiring the future and uncertain claim by immediately paying an outright sum in favor of the company damaged by the cartel and assuming all the remaining risks and burdens of recovery.
CASE FICHE
Germany’s Federal Cartel Office (FCO – Bundeskartellamt) – measure of December 21, 2020
Damagers:
Potential damaged parties: companies that purchased aluminum products resulting from the forging process.
Note: Even if the affected products were purchased from outsiders to the cartel or retailers/service outlets, cartel damages may recoverable.
Relevant period: purchases made between 2006 and 2018.
Germany’s Federal Cartel Office (FCO – Bundeskartellamt) – measure of February 4, 2021
Damagers:
Potential damaged parties: companies that purchased steel products resulting from the forging process.
Note: Even if the affected products were purchased from cartel outsiders or dealers/service outlets, cartel damages may be recoverable.
Relevant period: purchases made between October 2002 and December 2016.
2006-2018 (aluminum)
2002-2016 (steel)
companies that purchased steel products resulting from the forging process.
Alessio Serra
