Dow’s €1.1 billion lawsuit brings Europe’s ethylene cartel dispute back into focus

Europe’s long-standing ethylene cartel dispute has gained fresh attention after Dow Europe filed a €1.1 billion damages claim against Clariant, Celanese, Orbia, and Westlake. The legal action follows the European Commission’s 2020 decision, which found that the four companies had coordinated their ethylene purchasing strategies between 2011 and 2017 to influence Europe’s Monthly Contract Price (MCP), the benchmark used for a significant share of long-term ethylene contracts across the region.

Although the Commission imposed combined fines of €260 million on the companies, the ruling addressed only the competition law violation and did not determine whether ethylene producers had suffered financial losses. That question has now become the centre of several civil lawsuits, with producers arguing that the alleged manipulation of the MCP kept contract prices lower than they should have been, reducing revenues over several years.

Dow’s filing adds to a growing list of compensation claims from major producers. Earlier this year, Braskem launched an €812 million claim, while companies including Shell, BASF, LyondellBasell, TotalEnergies, OMV, BP, ExxonMobil, and MOL Group have also taken legal action in courts across Germany and the Netherlands. Their claims reflect the belief that the impact of the alleged cartel extended across millions of tonnes of ethylene sold under long-term contracts.

Unlike most antitrust cases, which involve companies working together to increase selling prices, this case centres on a purchasing cartel. Regulators concluded that the companies coordinated their buying behaviour to influence the MCP, a benchmark that plays a key role in determining contract prices throughout Europe. Producers argue that even a small reduction in the benchmark price could have resulted in substantial cumulative revenue losses over time.

With the Commission having already confirmed the infringement, national courts are now focused on assessing the economic consequences. They will determine whether suppliers experienced measurable financial damage and, if so, the level of compensation the defendants may be required to pay. As more claims continue to emerge, the dispute remains one of the European petrochemical sector’s most significant legal cases.

Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.