German Cement

'The first thing for any new competition regulator is to go out and find the cement cartel. Because my experience of this subject is, it is always there, somewhere. The only countries in which I had been unable to find the cement cartel is where there is a national state-owned monopoly for cement'

Richard Whish (2001)

German Cement

CDC affiliate CDC Cartel Damage Claims SA – ‘CDC SA’ (Company Register Brussels no. 478.828.424) – enforces antitrust damage claims purchased from victims of the German Cement Cartel. This case concerns the nationwide market for cement in Germany.

Background and facts

In the spring of 2002, the German Federal Cartel Office (FCO) uncovered a hardcore-cartel in the cement sector. According to the FCO, numerous cement producers had divided the German cement market between themselves, agreed on sales quotas, and fixed prices since the beginning of the 1990s at the latest.

In April 2003, the FCO imposed a fine totalling € 702 million on 12 companies and their representatives. € 660 million thereof had to be borne by the following six largest German producers:

•    Alsen AG (now: Holcim Deutschland AG),
•    Dyckerhoff AG,
•    HeidelbergCement AG,
•    Lafarge Zement GmbH,
•    Readymix AG (now: Cemex Deutschland AG) and
•    Schwenk Zement KG.

Readymix AG disclosed the cartel agreements to the FCO and applied for leniency under the German leniency programme. On 29 June 2009, the Higher Regional Court of Düsseldorf confirmed the infringements of antitrust law by the cement producers, but reduced the fines imposed by the FCO because of incomplete data for setting the fines.

The customers of the cartel members were substantially damaged, and some have even been driven out of the market. Directly after the uncovering of the Cement Cartel, a significant price decrease for cement could be observed. Consequently, the customers raised the question whether and how they could get a compensation for the damages sustained. Against this background, the idea of CDC was borne, and CDC SA was founded as the first company of the CDC group to overcome the existing obstacles to an effective enforcement of antitrust damage claims.

Civil proceedings

CDC SA began proceedings to enforce damage claims against the ringleaders of the Cement Cartel in 2002. It has purchased the cartel-related claims of 28 damaged companies, mostly medium-sized companies which are active in the concrete production and manufacturing sector.

In August 2005, after the preparation of the claim, and in particular of the calculation of the damages sustained, CDC SA represented by the German law firm Oppenländer Rechtsanwälte brought an action for damages against the six above-mentioned cartel members before the Regional Court of Düsseldorf, Germany [Case No. 34 O (Kart) 147/05]. CDC SA has since extended the claim twice after purchasing the cartel-related damage claims of 8 further companies. The antitrust damages claimed now amount to approximately € 176 million (without interest).

The substantiation of the claim is based on evidence gathered from the cartel proceedings and the damaged companies. The FCO has obtained comprehensive and detailed evidence on the antitrust law infringement. In parallel, CDC collected and analysed the data received from its business partners on their purchases of cement under its tradebaCCC procedure. The material demonstrates that it was the Cement Cartel’s object and effect to damage customers. The cartel further led to a market disequilibrium and a deterioration of competition conditions. CDC, working together with external economists, has accomplished an analysis of nearly 200,000 documents (invoices, credit notes) concerning cement purchases, which CDC has received from its business partners. The analysis clearly shows the price effects of the Cement Cartel: Prices were relatively stable since the early 1990s until the break-up of the cartel in spring 2002. Directly after this event, all major cement producers offered prices significantly below the price level during the cartel period. This contrasts with the price development during the cartel period, where even a worsened economic situation for the construction industry never caused comparable price reactions. As a result of the cartel, the damaged companies had to pay significant overcharges.

The defendants tried to obtain a suspension of the damage proceedings until the end of their appeals against the FCO decision. However, in a court order of 9 March 2006 the Regional Court of Düsseldorf rejected the requests for suspension. The defendants’ appeals against this order have been rejected by the Higher Regional Court of Düsseldorf by court order of 3 May 2006 [Ref. No. VI-W (Kart) 6/06].

The German cement case is still pending. The first hearing took place on 6 December 2006. By interlocutory judgement of 21 February 2007, the Regional Court of Düsseldorf confirmed the admissibility of the action. On 14 May 2008, the First Cartel Senate of the Higher Regional Court of Düsseldorf upheld this decision [Case No. VI U (Kart) 14/07]. The latter decision was then contested by Dyckerhoff AG before the Federal Court of Justice. On 7 April 2009, the German Federal Court of Justice dismissed this appeal and confirmed that the damage action of CDC SA is admissible [Case No. KZR 42/08]. The Regional Court of Düsseldorf will proceed with deciding on the merits of the case.