Cartel Digest

Graphite Electrodes

Graphite Electrodes
  Overall Cartel Period 1992-1998
  Participants SGL Carbon AG; UCAR International Inc.; Tokai Carbon Co., Ltd.; Showa Denko K.K.; VAW Aluminum AG; SEC Corp.; Nippon Carbon Co., Ltd.; Carbide/Graphite Group, Inc.
  Total Fines (DOJ) $437.1 million
  Total Fines (EC) €218.9 million

In 1997, the European Commission (“EC”) launched raids on manufacturers of graphite electrodes, large columns used in electric furnaces to generate the intense heat required for steel manufacturing.  The U.S. Department of Justice (“DOJ”) also brought charges against all but one of the graphite electrode manufacturers investigated by the EC.  Sales of graphite electrodes in the United States reached $500 million in 1996 and $1.7 billion for the total period of the cartel, and in the European Economic Area the market for these products was approximately €420 million in 1998.  The EC, DOJ, Canadian Competition Bureau and Korean Fair Trade Commission (“KFTC”) all enforced their competition laws against the cartel members.  The regulators found that, from 1992 to 1998, cartel members regularly attended meetings, including chief executive level “Top Guy” meetings, in the Far East, Europe and the United States where they agreed on the volume of sales for each company.  The cartel also agreed to divide the world market and designate on a regional basis which company would set the price that others would follow.

Enforcement Highlights:

  • The DOJ imposed a fine of $10 million, the largest competition fine imposed on an individual by the Antitrust Division, on Robert Koehler, the CEO of SGL Carbon.
  • The DOJ imposed a fine of $1.25 million on Robert Krass, the President and CEO of UCAR International Inc. and sentenced him to 17 months in prison.
  • The KFTC imposed fines on cartel members totaling more than ₩11 billion (subsequently reduced to ₩5.7 billion).  This is the first case in which the KFTC applied Korean competition law extraterritorially and imposed fines on the participants of an international cartel.
  • A Canadian federal court fined six companies approximately $25 million CAD for their roles in the cartel, and UCAR Inc. negotiated an additional $19 million CAD in restitution with Canadian steel companies.
  • Mitsubishi was convicted of aiding and abetting the price-fixing conspiracy after a two-week jury trial in the United States .
Company Conspiracy Period Fine (USD) Plea Date No. of Excluded Individuals Plea Agreement
SGL Carbon AG 7/92-6/97 $135 million 06/16/1999 0 Plea Agreement
Mitsubishi Corporation 3/92-6/97 $134 million 02/12/2001 N/A  
UCAR International Inc. 7/92-6/97 $110 million 04/24/1998 4 Plea Agreement
Showa Denko Carbon, Inc. 1/93-1/97 $32.5 million 09/08/1998 N/A Plea Agreement
Tokai Carbon Co., Ltd. 7/92-6/97 $6 million 05/20/1999 N/A Plea Agreement
SEC Corporation 7/92-6/97 $4.8 million 11/17/1999 N/A  
Nippon Carbon Co., Ltd. 7/92-6/97 $2.5 million 11/17/1999 N/A  
Carbide/Graphite Group of Pittsburgh 7/92-6/97 Immunity N/A  
Individual Company Prison Sentence Fine (USD) Plea Date Plea Agreement
Robert Koehler, CEO SGL Carbon AG None $10 million 06/16/1999 Plea Agreement
Robert Krass, CEO UCAR International Inc. 17 months $1.2 million 09/29/1999  
Robert Hart, COO UCAR International Inc. 7 months $1 million 09/23/1999  
Korea
Company Fine Date
UCAR International Inc. ₩ 676 million 03/20/2002
SGL Carbon AG ₩ 963 million 03/20/2002
Showa Denko K.K. ₩ 1.2 billion 11/06/2006
Tokai Carbon Co., Ltd. ₩ 1.2 billion 03/20/2002
Nippon Carbon Co., Ltd. ₩ 1.2 billion 08/23/2002
SEC Corporation ₩ 359 million 03/20/2002
Canada
Company Fine Date
SEC Carbon, Ltd. $ 250,000 11/09/2007
Mitsubishi Corporation $ 1 million 05/12/2005
Nippon Carbon Co., Ltd. $ 100,000 12/08/2005
UCAR Inc. $ 11 million 03/18/2009
SGL Carbon AG $ 12.5 million 07/18/2000
Tokai Carbon Co., Ltd. $ 250,000 02/05/2001
Europe
Company Fine Date
SGL Carbon AG € 80.3 million 07/18/2001
UCAR International Inc. € 50.4 million 07/18/2001
Tokai Carbon Co., Ltd. € 24.5 million 07/18/2001
Showa Denko K.K. € 17.4 million 07/18/2001
VAW Aluminum AG € 11.6 million 07/18/2001
SEC Corporation € 12.2 million 07/18/2001
Nippon Carbon Co., Ltd. € 12.2 million 07/18/2001
Carbide/Graphite Group, Inc. € 10.3 million 07/18/2001
Canada
Individual Company Prison Sentence Fine Date
Robert P. Krass, Senior Vice President UCAR Inc. None $ 70,000 09/18/2003
Robert J. Hart, Senior Vice President UCAR Inc. None $ 50,000 03/02/2005