Ethylene purchasers cartel

Ethylene purchasers cartel

On July 14, 2020, the European Commission imposed a total fine of €260 million on Clariant (Switzerland), Orbia (Mexico), and Celanese (US). Westlake (US) was not fined, as it had disclosed the cartel to the Commission in early 2016 and requested a reduction in its fine under the leniency program. Additionally, the other three companies received a 10% reduction in their fines due to their prompt cooperation and participation in the cartel. On September 25, 2020, Clariant filed an action before the European General Court seeking either the annulment or a reduction of its fine of approximately €156 million (Case T-590/20), despite having already reached a settlement with the Commission.

From 2011 to 2017, the four companies—Westlake (US), Clariant (Switzerland), Orbia (Mexico), and Celanese (US)—colluded to purchase ethylene at artificially low prices. Unlike typical antitrust cases where companies conspire to raise prices, this cartel agreed to lower the purchase price of ethylene, disadvantaging both sellers and other purchasers. This type of collusion, known as a „demand cartel,“ is unusual in antitrust cases.

Ethylene is a flammable organic chemical used in products like PVC flooring. Its price is highly volatile and is governed by the Monthly Contract Price (MCP), which is determined through negotiations between sellers and buyers. The four companies manipulated the MCP to keep prices low for their benefit. They coordinated their strategies before the MCP was set each month, driving the price down over approximately six years. Such agreements are prohibited under EU competition rules.

Uncovering and identifying this unusual antitrust case was particularly challenging, as the European Commission typically focuses on suspiciously high purchase prices. This is the first horizontal cartel ever uncovered in the chemical sector.

The victims of the cartel’s illegal agreements were ethylene producers and sellers, who did not anticipate an antitrust issue. The affected countries included 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 and chemical sector

Contact information:

ECDA coordinator: Chrissy Lind
Phone +49(0)30 611 28 40-10
info@ecda-online.com

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