Fastener makers stitched up

The European Commission has fined YKK, Prym and Coats and four others a total of €328m for operating cartels on the markets for fasteners and attaching machines in violation of EC Treaty rules that outlaw restrictive business practices.

Five subsidiaries of the above groups were named and shamed by the commission, together with Scovill group, A. Raymond, Berning & Söhne and the German trade association Fachverband Verbindungs-und Befestigungstechnik, which also participated in one of the infringements.

The commission found four separate cases in which these companies agreed on co-ordinated price increases, fixed minimum prices, allocated customers, shared markets and exchanged other commercially important and confidential information.

Prym group received full immunity from fines under the commission's leniency programme as it was the first to provide information about the cartel. In addition, the fines imposed on Prym group for its involvement were also lowered as a result of the company's cooperation.

Smaller reductions of the fines were also granted to the YKK group and the Coats group as a result of their co-operation under the commission's leniency programme.

The commission began the investigation after certain information had been brought to its attention. This led to surprise inspections in November 2001 at the premises of several community producers of hard and soft haberdashery. In turn, these inspections triggered applications from Prym group, Coats group and YKK group for immunity or reduction of fines under the commission's leniency programme.

The evidence uncovered in the inspections showed that the companies ran illegal cartels on the markets for zip fasteners, other fasteners (e.g. snap buttons, rivets) and their attaching machines.

The first cartel, involving the YKK group, the Prym group, the Scovill group, A. Raymond, Berning & Söhne and the association VBT), ran from 1991 until at least 2001. During this period, the companies agreed, among other things, on co-ordinated price increases in annual "price rounds."

The second cartel, involving the Prym group and the YKK group, ran from 1999 until at least 2003. During this period, the two leading manufacturers of fastening products in Europe fixed prices on a product-by-product and country-by-country basis.

The third cartel, involving the YKK group, the Coats group and the Prym group, ran from April 1998 to at least November 1999. During this period, the three leading manufacturers of zip fasteners met on a number of occasions to exchange price information and to discuss price increases. The three undertakings also agreed on a methodology to set minimum prices for zip fasteners in Europe.

The fourth cartel, involving the Prym group and the Coats group, was the longest infringement discovered by the commission during the investigation and lasted for more than 21 years, from 1977 until at least 1998. During this period, the two companies agreed to share the whole haberdashery market between themselves.

The commission has evidence that in all four cartels, high-ranking management (such as managing directors, sales directors, and board members) participated in regular meetings and discussions. There is also evidence that the companies were aware that their behaviour was illegal.