Bayer fined $66 million

Bayer has reached an agreement with the US Department of Justice to pay a $66 million fine relating to charges of alleged price fixing by its rubber chemicals business.

Bayer confirmed yesterday that it has reached agreement with the US Department of Justice (DOJ) to settle charges related to allegations that its rubber chemicals business unit engaged in anti-competitive activities between 1995 and 2001.

According to a DOJ statement, Bayer conspired with unnamed rubber chemical producers to suppress and eliminate competition for certain rubber chemicals sold in the United States and elsewhere from 1995 to 2001.

“Today’s charge is an important step in our prosecution of a cartel that harmed millions of American consumers who use a broad spectrum of products manufactured with rubber chemicals,” said R. Hewitt Pate, Assistant Attorney General in charge of the Department’s Antitrust Division.

Rubber chemicals are a group of additives and fillers used to improve the elasticity, strength, and durability of rubber products, such as tyres, outdoor furniture, hoses, belts, and footwear. Approximately $1 billion of rubber chemicals are sold annually in the United States.

Under the terms of the agreement, Bayer has agreed to plead guilty and to pay a fine of $66 million. The company will set up a respective provision for the second quarter of 2004.

The agreement, which is subject to court approval, is expected to resolve all criminal charges against Bayer in the US for activities related to its rubber chemicals business.

In a statement, Bayer said it has been co-operating with the investigation and that it is the company’s policy to comply with antitrust laws.