Fines totalling approx. € 24 million on account of price agreements for the products "Calgonit" and "Somat" and for anti-competitive exchange of information

In two proceedings the Bundeskartellamt has imposed fines amounting to approx. € 24 million on Reckitt Benckiser Deutschland GmbH as well as employees involved. The company is accused of having illegally agreed on prices for dishwasher detergents. It has also exchanged competition relevant information with various brand product manufacturers at regular meetings, which is inadmissible under competition law.

Andreas Mundt, President of the Bundeskartellamt, stated: "In several cases Reckitt Benckiser and Henkel have agreed price increases for dishwasher detergent of the brands "Calgonit" and "Somat". For years both companies have between them coordinated price increases for their products. It is the consumer who ultimately foots the bill."

The proceeding on illegal price agreements was triggered in 2010 by an application for leniency by Henkel Wasch- und Reinigungsmittel GmbH. No fine was imposed on Henkel in accordance with the Bundeskartellamt's Leniency Programme.
Between mid 2005 and mid 2007 Henkel and Reckitt Benckiser had agreed in four cases on the level as well as the dates of the following price increases:

• Increase of list prices as of 1st December 2005 by 5-8% for dishwasher detergent of the brands "Calgonit" (Reckitt Benckiser) and “Somat" (Henkel), washing powder additives of the brands "Vanish Oxi Action" (Reckitt Benckiser) and “Sil“ (Henkel) and for high-price all-purpose cleaners of the brands "Cilit Bang" (Reckitt Benckiser) and “Bref" (Henkel).
• Indirect price increase as of 1st October 2006 by 13 % per unit by reducing the package sizes without changing the price for simple dishwasher tabs of the brands "Calgonit" and "Somat".
• Agreement on package sizes for the introduction of "Calgonit Alles in 1"/“Somat 7 in 1" multi-phase tabs at the beginning of 2007.
• Increase of list prices as of 1st June and 1st July 2007 respectively by 5-8 % for dishwasher detergent ("Calgonit" and "Somat") and washing powder additives ("Vanish Oxi Action" and “Sil")

The second proceeding concerned the illegal exchange of competition relevant information with several other brand product manufacturers. This proceeding was triggered in 2006 by the leniency application of Colgate Palmolive GmbH. The Bundeskartellamt subsequently imposed fines totalling approx. € 20 million in 2008/2009 on eight manufacturers of drugstore products (cf. Bundeskartellamt press release of 20 February 2008).

Andreas Mundt: "Together with other companies in the sector the branded goods manufacturers had for years exchanged information about upcoming price increases, new demands for rebates from and the state of negotiations with retailers."

Information was exchanged at meetings of the Trademark Association's working group on "body care, cleaning agents and detergents" (KWR). In the proceedings against the other participants of the working group, which are still pending, further investigations had revealed that the exchange of information also included planned price increases. In mid 2010 the accusation was therefore extended. In the light of the now much more serious accusation, a proceeding has also been initiated against the trademark association for supporting the information exchange.

In both proceedings Reckitt Benckiser was granted a reduction of its fines for its co-operation in clarifying the accusations. In addition, so-called settlements were agreed with the company in order to bring the proceedings to conclusion, which further reduced the level of fines.

The Bundeskartellamt's orders imposing the fines on Reckitt Benckiser are not yet final and can be appealed against to the Düsseldorf Higher Regional Court.