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EU Court Reduces Hoechst Cartel Fine

Court reduced a fine given to the German chemicals producer, saying regulators mislabeled the company as the leader of a cartel to fix food preservative prices.

BRUSSELS, Belgium (AP) -- An EU court on Wednesday reduced a fine given to German chemicals producer Hoechst AG, saying EU regulators were wrong to label the company as the leader of a cartel to fix the price of food preservatives.

The European Commission fined Hoechst euro99 million in 2003 for clubbing together with four Japanese manufacturers to allocate quotas and fix prices for sorbates sold in Europe from 1978 to 1996.

Sorbates are used to prevent micro-organisms from growing in foods.

The Court of First Instance -- the EU's second-highest court -- reduced that fine to euro74.25 million (US$114.9 million), saying regulators did not properly alert Hoechst that they saw the company as the leader of the cartel.

The Luxembourg-based court said this meant Hoechst was not in a position to defend itself properly against the EU charges.

The Commission had justified the high level of the fine -- then one of the largest levied on a company -- because it said Hoechst was the main mover in the price-fixing and was a repeat offender.

The court also said regulators broke their own rules on fair treatment because they had told Chisso -- the company that blew the whistle and won complete immunity -- that they would let it know if another member of the cartel was more cooperative. EU regulators are not supposed to give companies any information about what other companies are doing.