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Fines for double glazing product price fixing

Since this press release was issued, Double Quick Supplyline Limited appealed the OFT's decision to the Competition Appeal Tribunal on 7 January 2005. Having regard to the specific circumstances of this case, the OFT consented to a reduction of the penalty to be paid by Double Quick Supplyline Limited in respect of the infringement from £109,000 to £36,210. This reduction in the penalty was made by an order of the CAT.

183/04    9 November 2004

Fines totalling over £2.4 million (reduced to £1.7 million on leniency) have been imposed against price fixing in the insulated glass (IG) desiccant market following an investigation by the OFT.

IG desiccant is a chemical used in double glazing manufacture to remove moisture from the airspace between two panes of glass in order to prevent condensation.

The OFT has found that the main supplier to the UK market, UOP Limited, fixed the price of IG desiccant with four of its distributors, UKae Limited, Thermoseal Supplies Limited, Double Quick Supplyline Limited (DQS) and Double Glazing Supplies Group plc (DGS). The OFT concluded that the parties, who together supply a large proportion of the 4,000 double glazing suppliers in the UK, colluded to maintain and/or fix resale prices for IG desiccant for more than three years after the Competition Act came into force on 1 March 2000.

Price fixing agreements are a breach of Chapter I of the Competition Act 1998, which prohibits anti-competitive agreements. The parties have been fined as follows:

• UOP - £1,540,000 (reduced to £1,232,000 on leniency)
• Thermoseal - £279,000 (reduced to £139,000 on leniency)
• DQS - £109,000
• DGS - £227,000
• Ukae - £278,000 (reduced to zero on leniency).

John Vickers, OFT Chairman, said: 'Anti-competitive agreements between firms to fix prices ultimately cost consumers. They are serious breaches of competition law and warrant serious fines.

'This case also shows how leniency for information providers can help expose cartels.'

The full text of the decision will be published on the CA98 Public Register on this website in due course.

NOTES

1. UOP is a subsidiary of US-based UOP LLC. It is the leading supplier of desiccant to the UK IG market.

2.  The Competition Act Chapter I prohibits agreements between undertakings or concerted practices which prevent, restrict or distort competition and may affect trade within the UK. Breach of the Chapter I prohibition means that the agreement is void and that the offending parties may be liable to financial penalties of up to 10 per cent of annual turnover.

3. The OFT can offer leniency to undertakings that come that forward with information about a cartel that they are involved in.  Total immunity from financial penalty is available to the first member of the cartel to come forward with relevant information. Significant reductions in penalty of up to 50 per cent are available where: (i) the undertaking is not the first to come forward with information but does so before the OFT has given written notice of its proposal to make a decision that the Chapter I prohibition has been infringed; or (ii) where the undertaking would have qualified for total immunity had it not been the instigator or leader of the cartel or compelled others to join.

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