Solvay Chemicals fined $2.5M for role in hydrogen peroxide price fixing in Canada

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Solvay Chemicals fined $2.5M for role in hydrogen peroxide price fixing in Canada

May 13, 2010 - 09:45
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OTTAWA, May 12, 2010 (Press Release) -The Competition Bureau announced today that Solvay Chemicals Inc. has been fined $2.5 million by the Federal Court after the company pleaded guilty to criminal charges for fixing the price of hydrogen peroxide sold in Canada.

The Bureau's investigation revealed that Solvay Chemicals Inc. conspired with competitors to fix the price of hydrogen peroxide in Canada between July 1998 and December 1999. Solvay's total sales of hydrogen peroxide in Canada during this time period were approximately $15 million. Hydrogen peroxide is a chemical oxidant and bleaching agent used mostly in the pulp and paper industry. It is also used in the environmental, chemical, textile and food processing industries.

"Price-fixing is a crime that deprives consumers and businesses of lower prices and product choice," said Melanie Aitken, Commissioner of Competition. "Eliminating illegal cartels continues to be a top priority for the Bureau."

Solvay Chemicals Inc. is the second party to plead guilty to fixing the price of hydrogen peroxide in Canada. Akzo Nobel Chemicals International BV pleaded guilty in November 2008 and was fined $3.15 million for its involvement in the conspiracy. The Bureau's investigation of other companies alleged to have participated in the conspiracy is ongoing.

Under the Competition Act, an agreement between competitors to fix prices, allocate markets or restrict output in Canada is a criminal offence. Following amendments to the Act that came into force in March 2010, penalties for violations of the conspiracy provisions include fines of up to $25 million and prison terms of up to fourteen years, or a combination of both. At the time the of the price-fixing conduct in question, penalties were capped at fines of up to $10 million and prison terms of up to five years, or a combination of both.

The Bureau's investigation benefited from cooperation under the Bureau's Immunity and Leniency Programs, which create incentives for parties to address their criminal liability by cooperating with the Bureau in its ongoing investigation and prosecution of other alleged cartel participants.

The Competition Bureau is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice.