The Commission has fined the Spanish company Abengoa S.A. and its subsidiary Abengoa Bionenergía S.A. (together ‘Abengoa’) € 20 million for participating in a cartel concerning the wholesale price formation mechanism in the European ethanol market. Abengoa admitted its involvement in the cartel and agreed to settle the case.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We fine today Abengoa, formerly one of the biggest ethanol producers in the EU, for aiming at influencing ethanol benchmarks in the market. Biofuels can contribute to promote cleaner transport and cut greenhouse gas emissions and for this reason, efficient biofuels markets play a key role. The Commission has zero tolerance for cartels and will enforce its antitrust rules strictly to ensure competition in all markets, including those relevant for the Green transition, such as the ethanol market.”
Ethanol is an alcohol made from biomass (such as wheat, maize or sugar beet) that, when added to gasoline, can be used as a biofuel for motor vehicles. The port of Rotterdam and the Amsterdam-Rotterdam-Antwerp barge market are the most important trading locations for ethanol in Europe. S&P Global Platts (‘Platts’), a company that provides price assessments for different commodity markets, takes the trading activity in this area into account in its assessment process for establishing its ethanol benchmarks, which are used as reference prices in the industry. To establish its benchmarks, Platts uses a price assessment process called ‘Market on Close’ (‘MOC’).
Abengoa, formerly one of the biggest ethanol producers in the EU, referenced the large majority of its ethanol sales contracts to the monthly average of Platts’ ethanol benchmarks. Therefore, the level of the ethanol benchmarks could influence directly the revenues that Abengoa received from its ethanol sales.
The Commission’s investigation revealed that Abengoa coordinated its trading behaviour with other companies on a regular basis before, during and after the so-called Platts ‘MOC Window’, which is the period between 16:00 and 16:30 London time. Abengoa’s aim was to artificially increase, maintain and/or prevent from decreasing the levels of Platts’ ethanol benchmarks. Abengoa also limited the supply of ethanol delivered to the Rotterdam area, in order to reduce the volumes available for delivery in the MOC Window. Abengoa’s ethanol traders had illegal contacts with individuals at other companies, typically in the form of chats, in order to coordinate with them certain of its ethanol trading activities before, during and after the MOC Windonw. These practices are prohibited under EU competition rules.
The infringement covered the entire European Economic Area (EEA). Abengoa’s involvement lasted from 6 September 2011 to 16 May 2014.
In setting the level of the fine, the Commission took into account, in particular, the sales value achieved by Abengoa in the EEA based on certain sales of physical fuel-grade ethanol referenced to Platts’ ethanol benchmarks, the serious nature of the infringement, its geographic scope and its duration.
Abengoa submitted a claim for inability to pay under point 35 of the 2006 Guidelines on fines. The Commission thoroughly assessed the financial situation of Abengoa, including its restructuring plans and their state of implementation. As a result of this assessment, the Commission granted a reduction of the fine.
In addition, under the Commission’s 2008 Settlement Notice, the Commission reduced the fine by 10% in light of Abengoa’s acknowledgment of its participation in and liability for the infringement.
The fine imposed on Abengoa totals € 20 000 000.
The Commission’s investigation started with inspections in May 2013, October 2014,and March 2015. The Commission opened its formal investigation in December 2015against Abengoa and against Alcogroup SA of Belgium and Lantmännen ek för of Sweden together with their relevant subsidiaries. The adoption of this settlement decision against Abengoa does not prejudge the outcome of the pending procedures.
Fines imposed on companies found in breach of EU antitrust rules are paid into the general EU budget. This money is not earmarked for particular expenses, but Member States’ contributions to the EU budget for the following year are reduced accordingly. The fines therefore help to finance the EU and reduce the burden for taxpayers. In accordance with Article 141(2) of the EU-UK Withdrawal Agreement, this case is a “continued competence case”. The EU will therefore reimburse the UK for its share of the amount of the fine once the fine has become definitive. The collection of the fine, the calculation of the UK’s share and the reimbursement will be carried out by the Commission.
More information will be made available under the case number AT.40054 in the public case register on the Commission’s competitionwebsite once any confidentiality issues have been resolved. For more information on the Commission’s action against cartels, see its cartels website.
The settlement procedure
The settlement procedure for cartels was introduced in June 2008 (see press releaseand MEMO). In a cartel settlement, parties acknowledge their participation in a cartel and their liability for it. Cartel settlements are based on the Antitrust Regulation 1/2003and allow the Commission to apply a simplified and shortened procedure. This benefits consumers and taxpayers as it reduces costs. It also benefits antitrust enforcement as it frees up resources to tackle other suspected cartels. Finally, the parties themselves benefit in terms of quicker decisions and a 10% reduction in fines.
The European Commission has set up a tool to make it easier for individuals to alert it about anti-competitive behaviour while maintaining their anonymity. The tool protects whistleblowers’ anonymity through a specifically-designed encrypted messaging system that allows two way communications. The tool is accessible via this link.
Action for damages
Any person or company affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission decision constitutes binding proof that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without being reduced on account of the Commission fine.
The Antitrust Damages Directive, which Member States had to implement in their legal systems by 27 December 2016, makes it easier for victims of anti-competitive practices to obtain damages. More information on antitrust damages actions, including a practical guide on how to quantify antitrust harm, is available here.