Cartel Digest

Monochloroacetic Acid (MCAA)

Monochloroacetic Acid (MCAA)
  Overall Cartel Period 1993-1999
  Participants Akzo Nobel NV Arnhem; Akzo Nobel Chemicals BV; Atofina SA (now Arkema SA); Clariant GmbH/Clariant AG; Hoescht AG; Elf Atochem SA
  Total Fines (DOJ) $29 million
  Total Fines (EC) €216 million

In December 1999, regulators in several jurisdictions, including the European Commission (“EC”) and the U.S. Department of Justice (“DOJ”), began investigating manufacturers of monochloroacetic acid (“MCAA”).  MCAA is a reactive chemical compound used in the production of commercial and consumer products, including pharmaceuticals, cosmetics, herbicides, and plastic additives.  In 2002, the DOJ estimated that annual sales of the compound reached $50 million in the United States.  The market value for MCAA in the European Economic Area (“EEA”) was estimated at €125 million in 1998, and cartel members controlled over 90% of the EEA market.  The regulators found that between 1995 and 1999, cartel members engaged in price-fixing and market allocation for MCAA sold in the United States and elsewhere. 

 

Enforcement Highlights:

  • Three companies entered into plea agreements with the DOJ, which resulted in fines totaling over $29 million.  Three executives from two of the companies entered into individual plea agreements resulting in $120,000 in fines and 9 months of jail time.
  • The EC imposed fines totaling over €216 million on three companies
  • The Canadian Competition Bureau’s investigation led to a $1.9 million CAD fine and prohibition order against Akzo Nobel.
Company Conspiracy Period Fine (USD) Plea Date No. of Excluded Individuals Plea Agreement
Hoechst AG 9/95-6/97 $12 million 03/11/2003 3 Plea Agreement
Akzo Nobel Chemicals B.V. 9/95-8/99 $12 million 06/27/2001 N/A  
Elf Atochem SA 9/95-8/99 $5 million 04/12/2002 2 Plea Agreement
Individual Company Prison Sentence Fine (USD) Plea Date Plea Agreement
Erik A. Broström, Sub-Business Unit Manager, Industrial Chemicals Division Akzo Nobel Chemicals BV 3 months $20,000 06/27/2001  
Patrick Stainton, Department Head, Chlorine, Bromine & Derivatives Division Elf Atochem SA 3 months $50,000 04/12/2002 Plea Agreement
Jacques Jourdan, Department Head, Chlorine, Vinyl & Solvents Division Elf Atochem SA 3 months $50,000 08/30/2002 Plea Agreement
Canada
Company Fine Date
Akzo Nobel Chemicals B.V. $ 1.9 million 08/18/2003
Europe
Company Fine Date
Akzo Nobel NV Arnhem € 84.4 million 01/19/2005
Atofina SA € 58.5 million 01/19/2005
Clariant GmbH/Clariant AG Immunity 01/19/2005
Hoechst AG € 74 million 01/19/2005