Ethylene purchasers cartel

Ethylene purchasers cartel

By decision of 14th of July 2020, the European Commission (COM) fined Clariant (Switzerland), Orbia (Mexico) and Celanese (US) a total sum of 260 million Euros. The only company that was free of charge was Westlake (US) since they revealed the cartel to the COM in early 2016 and demanded a request for reduction of the fees under the lenciency programme. Furthermore, the other three companies got a reduction of the charges by 10%, due to their immediate commitment and participation in the cartel. On 25th of September 2020, Clariant brought an action before the European General Court seeking the annulment or alternatively a reduction of the fine of approximately EUR 156 million (T-590/20), despite having reached a settlement with the Commission.

From 2011 to 2017 the known four united to purchase ehtylene at an unusual price. Unlike most of the antitrust cases when companies agree on rising the price, Westlake (US), Clariant (Switzerland), Orbia (Mexico) and Celanese (US) agreed on buying ethylene for a lower price, to the disadvantage of the seller and purchaser. This scenario is an unusual scenario in antitrust cases, so-called demand cartel.

Ethylene is an organic flammable chemical that is used to make e. g. PVC floors. The price of ethylene is generally very volatile, therefore it is subject to the Monthly Contract Price (MCP). The MCP is composed by individual negotiations between the seller and purchasers of ehtylene. By agreements, the known four guided the MCP in order to keep the price low to their advantage. The cartelists coordinated and arranged their strategies in advance, before the MCP was settled and the price for ethylene was set for another four weeks. Month after month, they pushed down the price to their benefit over a time period of approximately six years. These agreements are prohibited under the EU competition rules.

It was very tricky to reveal and identify such an unusal antitrust case since the COM is usually looking out for suspicious high purchase prices. This is the first horizontal cartel that has ever been uncovered in the chemical sector.

The mourners of the illegal agreements of the cartelists were the producers and sellers of ethylene, which didn‘t suspect an antitrust case scenario. The affected countries were France, Germany, Belgium and The Netherlands.

Cartel subject: Ethylene

Cartel members: Westlake, Clariant, Orbia, Celanese

Cartel period: 2011 – 2017

Cartel region: Belgium, France, Germany, Netherlands

Level of fines: about € 260 million

Affected parties: supplier and purchaser of ethylene

Affected branches: PVC production, plastic sector, chemical sector

Contact information:

ECDA coordinator: Dr. Anna Lesinska-Adamson
Phone +49(0)30 611 28 40-10

Postal address:
European Cartel Damage Alliance e.V. (ECDA)
Magazinstraße 15-16
10179 Berlin / Germany