On 2 March 2011, the Spanish Competition Authority ('CNC') imposed fines amounting to a total of €51 million on eight companies active in the professional hairdressing products sector (the 'Companies') as well as the National Association of Perfumery and Cosmetics ('STANPA') for implementing and maintaining a cartel. The cartel was initiated in 1989 and the Companies involved, including L'Oréal España and Productos Cosméticos S.L.U. (Wella), represent approximately 70% of the market for professional hairdressing products.
This was the first case in which the Spanish leniency regime, which entered into force on 28 February 2008, was applied. One of the Companies participating in the cartel – Henkel Ibérica - filed a leniency application with the CNC admitting the existence of the cartel and its participation, as well as the participation of other companies involved.
Under the Spanish leniency program, the CNC's Investigations Division proceeded in June 2008 to carry out inspections at the premises of the Companies involved, and on 16 June 2008 decided to commence formal investigations proceedings. After the closure of the investigation proceedings, the Council of the CNC concluded that the Companies and STANPA, formed part of the cartel, which was operational from 8 February 1989 until 28 February 2008.
According to the CNC, the Companies and STANPA had, since 1989 at least, held meetings every six months in the so-called G8 and exchanged sensitive information that allowed them to know the future strategies of their competitors. This systematic exchange of current and future pricing information cancelled out any strategic uncertainty in the market, and undermined the incentive to compete on price, quality or service, seriously affecting competition.
In its decision, the CNC's Council considered that the exchanges performed since 1989 by the Companies and STANPA had the ability to seriously affect competition and constituted a very serious infringement of Article 1 of the Spanish Competition Act.
Taking into account the severity and duration of the sanctioned conduct, the CNC's Council imposed the following fines:
- L'Oréal España € 23,201,000
- Productos Cosméticos (Wella) € 12,032,000
- The Colomer Group Spain € 8,739,000
- Eugene Perma España € 2,288,000
- Cosmética Cosbar (Montibello) € 2,555,000
- Cosmética Técnica (Lendan) € 1,003,000
- Henkel Ibérica € 9,890,000
- DSP Haircare Products € 299,000
- STANPA € 900,000
Pursuant to the provisions on the leniency program, the CNC's Council granted immunity to Henkel Ibérica exempting it from payment of the corresponding fine.
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