Coalition Against BAYER Dangers (Germany)
Press Release, June 2, 2006

BAYER charged with cartel offences:

”Those responsible should be behind bars”

The Coalition Against BAYER Dangers (CBG) has filed charges against the Board Chairman of the BAYER corporation, Werner Wenning, with the Cologne Public Prosecutor. The association accuses the manager of tolerating or orchestrating the participation of the company in illegal price-fixing.

During the last few years BAYER has been convicted in a multitude of cases involving cartel offences. In the last financial year alone, the company had to pay EUR 275 million in fines. “We are talking about sums of several hundreds of millions in these cartel arrangements. It is unthinkable that decisions of this magnitude were taken without the knowledge of the Chairman. Only when the responsible directors fear custodial sentences can a deterrent effect be assumed”, according to Philipp Mimkes from CBG. The Coalition Against BAYER Dangers believes that the majority of illegal price fixing remains undiscovered. “It is consumers and taxpayers who pay the bill”, continues Mimkes. “It is unacceptable that those responsible for fraud worth millions are not criminally prosecuted”.

Eberhard Reinecke, CBG`s lawyer: “The great extent of such cartel arrangements and the precautions taken with the accounting prove that there is a systematic business policy at work here. The Chairman of Bayer AG is therefore guilty of embezzlement.”

On the political level there have recently been efforts to bring those responsible in the company to justice. The EU Competition Commissioner Neelie Kroes assesses private lawsuits against cartels as a central means of fighting illegal price-fixing. After imposing a EUR 58 million fine on BAYER Kroes stated that “cartels are a scourge. I will ensure that cartels will continue to be tracked down, prosecuted and punished. With this latest decision, I am sending a very strong message to company boards that cartels will not be tolerated, and to shareholders that they should look carefully at how their companies are being run.”

Recent cartels involving Bayer:
=> EU Commission fines four firms €75.86 million for rubber chemical cartel
=> Former Top Bayer Executives Indicted in Price-Fixing Conspiracy
=> Bayer AG Agrees to Plead Guilty and Pay $66 Million Fine for Rubber Cartel

Please also see the charge brought against BAYER by CBG (German)

Jul. 04, 2006 Kansas City Star

Price-fixing case

Bayer Corp. and various affiliates have agreed to pay $73.5 million to settle civil litigation arising from a price-fixing conspiracy to which the company pleaded guilty in 2004.
The cases were brought by hundreds of plastics manufacturers around the country. The multidistrict litigation was later consolidated in federal court in Kansas City, Kan. U.S. District Judge John Lungstrum plans to hold hearings on the proposed settlements later this year.
The cases involved polyurethane products containing polyester polyols and polyether polynols - compounds used in the manufacture of thousands of consumer products ranging from plastic grocery bags to automotive parts.
In September 2004, Bayer Corp., the U.S. subsidiary of Bayer AG of Germany, admitted conspiring from 1998 to 2002 to suppress market competition by fixing the prices of polyester polyols.

June 29, 2006, The Guardian

Companies found guilty of cartel behaviour face billion-euro fines

Companies found guilty of anti-competitive practices are to face multibillion euro fines or more than 10 times the current tariffs for abusing their monopoly and taking part in cartels, under draconian guidelines adopted by the European commission yesterday.
Microsoft, the world's biggest software group, was fined a record €497m (£333m) in March 2004 for abuse of dominance. But advisers to Neelie Kroes, the EU competition commissioner, said the company would have faced a fine of at least €2bn under these new guidelines, with potential penalties up to 15 times higher.
Fines under the guidelines, which take effect next month, will be raised to up to 30% of annual turnover in the sector of business breaching competition law, and will be multiplied by the number of years the offence occurs.
The rules are designed to stiffen the deterrent effect and encourage whistleblowers. They are seen as a warning to Microsoft to address the commission's concerns about its operating system Vista, and are also directed at repeat offenders in the chemicals industry and other sectors. Sources said: "If Microsoft does not address these concerns, we may have to act under the new guidelines before the court of justice ECJ rules on its appeal over the earlier fine."
Microsoft already faces the possibility of €2m-a-day fines, backdated to December 15 2005, for failing to comply with the order imposed by Mario Monti, the predecessor of Ms Kroes.
A spokesman for Microsoft stressed that the penalties would only apply if the commission released a new statement of objections, and they could not be applied to the current investigation.
Ms Kroes said clear signals were being sent to companies: "Don't break the anti-trust rules. If you do, stop it as quickly as possible, and ... don't do it again. If companies do not pay attention to these signals they will pay a very high price."
A fierce "entry fee" will now be levied on firms taking part in anti-competitive behaviour. The deterrent would be equal to 15%-25% of the annual relevant sales and come on top of the infringement fine.
Repeat offenders, such as the chemicals groups Solvay, Bayer, Degussa and ICI, will also be fined 100% more if they have been previously found guilty, even by national regulators.
David Gow