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European Commission Fines Former Ethanol Producer Abengoa in Cartel Settlement
The European Commission (“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.
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”).
Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) and Article 53 of the Agreement on the European Economic Area (“EEA Agreement”) prohibit cartels and other restrictive business practices. 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 Window. These practices are prohibited under EU competition rules.
You can reach the press release of the Commission here.
Kind regards,
Zumbul Attorneys at Law