Page last updated at 13:41 GMT, Wednesday, 1 October 2008 14:41 UK

'Paraffin mafia' is fined 535m

EU Competition Commissioner Neelie Kroes demonstrates some of the products affected at a press conference
Neelie Kroes shows some of the products affected by the cartel

The European Commission has fined nine firms a total of 535m ($948m; 676m euros) for operating what it called a price-fixing "paraffin mafia".

Every household and business in Europe had probably bought products affected by the cartel, said the commission.

A 10th firm, the Anglo-Dutch oil firm Shell, escaped a fine as it blew the whistle on the cartel's activities.

Paraffin wax is used in candles, waxed paper, paper cups and plates, as well as in chemicals and car components.

The nine companies which have been fined are: Sasol of South Africa and Germany; US giant Exxon Mobil; Repsol of Spain; Italy's ENI; Tudapetrol, Hansen & Rosenthal and RWE of Germany; France's Total; and MOL of Hungary.

Illegal behaviour

The cartel went under various names. To some firms it was the "paraffin mafia" and to others the "blauer salon".

This was the name of a Hamburg hotel bar where it had its first meeting, said the commission.

There is probably not a household or company in Europe that has not bought products affected by this 'paraffin mafia' cartel.
Neelie Kroes, EU Competition Commissioner

Other cartel meetings to fix markets and prices took place at a series of top hotels all over Europe between 1992 and 2005.

The commission said such illegal cartel behaviour would not be tolerated and warned that company managers and shareholders should take note.

EU Competition Commissioner Neelie Kroes said: "I sincerely hope these high fines will encourage the management of these companies and others to look very carefully at what their staff are doing".

Immunity claim

'PARAFFIN MAFIA' FINES

Sasol, 318.2m euros
Total, 128.1m euros
Exxon Mobil, 83.6m euros
RWE, 37.4m euros
ENI, 29m euros
Hansen & Rosenthal, 24m euros
MOL, 23.7m euros
Repsol 19.8m euros
Tudapetrol 12m euros

The commission said that the 10 members of the cartel took part in regular gatherings to discuss prices, allocate markets and customers, and to exchange sensitive commercial information.

The commission added that the fine for chemicals firm Sasol had been increased by 50% because it was the ringleader, while ENI's fine had been increased by 60% as it had taken part in previous cartels.

Shell alone escaped being fined because it blew the whistle on the cartel in 2005 - triggering the investigation - and claimed immunity.

"There is probably not a household or company in Europe that has not bought products affected by this 'paraffin mafia' cartel", said Ms Kroes.

This is the fourth-highest fine imposed so far by EU regulators on a sector.

Last year, the EU fined lift companies 992.3m euros and imposed a 750.5m-euro fine on switchgear makers. In 2001 it fined vitamin manufacturers 790.5m euros.

The commission said individuals or companies that were victims of the cartel were entitled to seek damages in national courts of EU member states.




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