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British Rubber & Polyurethane Products Association

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Spain fines polyurethane comfort foam cartel

Posted on 07 March 2013

The Spanish National Competition Commission has imposed fines
totaling more than $34 million on 10 companies and the Spanish
Association of Polyurethane Foam Businesses for operating a cartel in
the comfort foam manufacturing sector.

The auditor which set up the arrangement escaped prosecution.

The
CNC council has ruled that there is proof of a breach of article 1 of
the Spanish Competition Act and article 101 of the Treaty of Rome. which
makes it illegal for companies to fix market shares and prices
together.

The CNC said the cartel ran from 1992 and it was
notified of the cartel by Recticel in 2010. The Spanish statute of
limitations does not permit prosecution of members for actions taken
before 2000.

Auditing company Coopers & Lybrand, now PWC, is
named in the report as being one of the driving forces behind the
cartel. The report states "controlling the distribution of production
quotas was raised as a result of the initiative of the Coopers &
Lybrand audit that addressed the flexible foam industry advising them to
cooperate in order to limit losses."

The auditor "also
coordinated the implementation of the agreement and monitoring. To this
end, the company auditor appointed a manager to control the production
plants of each manufacturer. He was also responsible for collecting the
documents showing the constitution of the bank guarantees which were
deposited with a notary public," the CNC report states.