Consumer product bigwigs fined €951m for anti-competitive practices

French competition authority, Autorité de la Concurrence, has issued fines worth a colossal €951m (£767m) on consumer product bigwigs that colluded with each other between 2003 and 2006 in order to increase the prices of their products against competitive pricing laws.

Cleaning products manufacturers, such as Henkel, Colgate-Palmolive, Reckitt Benckiser, Procter & Gamble (P&G), SC Johnson, Sara Lee and Bolton Solitaire, were fined €345.2m.

Personal products manufacturers, including L’Oreal, Henkel, Colgate-Palmolive, Unilever, Reckitt Benckiser, P&G, Sara Lee, Gillette, Laboratoires Vendôme, Vania and Beiersdorf, were slammed with fines totalling €605.9m.

The company with the highest fine of €189m, L’Oreal, refuted the accusations saying that it was "extremely surprised by this decision and the amount of the fine, which are totally out of proportion".

Siding with L’Oreal, Unilever too felt the fines as "totally unjustified". Unilever ‘clarified’ that it was only involved in "instances of information exchanges". Both companies will be appealing the decision.

Reckitt Benckiser, whose French units had been reportedly assisting with the investigation, was slapped with a penalty of €121m, Henkel of Germany, €109m and Germany’s Nivea-maker Beiersdorf BEIG.DE was handed a €72m fine.

Henkel and Colgate-Palmolive, will be shown a certain amount of leniency as per the authorities clemency procedures regarding whistleblowers, while total immunity shall be provided for SC Johnson.

Senior vice-president at SC Johnson, Kelly M. Semrau declared: "When we discovered that one of our people was involved in misconduct, we quickly reported our findings to the appropriate authorities and we cooperated fully throughout the investigation."

Fines will be reduced from 16-18% for companies not contesting the accusations and guaranteeing future confirmation of rules, such as those owned by Johnson & Johnson, Unilever, Henkel, Colgate-Palmolive, Reckitt Benckiser, Beiersdorf and P&G.

According to the competition authority, these accused companies were coordinating their commercial policies to match price increases, which led to artificially high prices.

These are the highest fines to date imposed by one of Europe’s major regulators.

P&G and Henkel announced that further action was being contemplated.

Planning to review the decision, a Colgate-Palmolive spokesman said: "It is Colgate-Palmolive’s policy to comply with all laws, including competition laws. If we ever discover an issue with respect to our compliance, our policy is to correct it promptly."

"The concerted practices were particularly sophisticated," Autorité de la Concurrence stated. "To discuss about each sector, they met regularly and secretly to coordinate their commercial policies and discuss their pricing policies."

Recently, the competition regulator had fined millers, who had been reportedly fixing the French packaged-flour market for almost 50 years, for €242m, and also broke up an alleged gang of laundry-detergent price riggers.

The fines reflected the size of the relevant markets in France: €7bn for personal care products and €4.2bn for homecare products. L’Oreal accounted for 28% of the personal products market.