- The Washington Times - Thursday, June 28, 2001

Dutch chemical giant Akzo Nobel Chemicals BV yesterday pleaded guilty and agreed to pay a $12 million criminal fine for participating in an international conspiracy to fix prices and allocate market shares of an acid used in pharmaceuticals, herbicides and plastic, the Justice Department said.

Department spokeswoman Gina Talamona said Erik Anders Brostrom, an Akzo Nobel executive and a Swedish citizen, also agreed to plead guilty, serve a three-month jail sentence in the United States and pay a $20,000 fine.

The acid, monochloroacetic or MCAA, is used to form intermediate chemical compounds used in numerous commercial and consumer products, such as pharmaceuticals, herbicides and plastic additives.

Ms. Talamona said that in the one-count felony charge filed in U.S. District Court in San Francisco, Akzo Nobel and Mr. Brostrom are accused of conspiring with unnamed MCAA producers to suppress and eliminate competition in the MCAA industry from 1995 to 1999.

By agreeing on the prices to be charged in the United States and on each company's share of the U.S. market, she said they effectively eliminated competition for their customers.

Under the plea agreements, which must be approved by the court, both Akzo Nobel and Mr. Brostrom have agreed to assist the government in its ongoing MCAA investigation.

The United States consumes roughly $50 million in MCAA annually. Akzo Nobel is headquartered in the Netherlands, but sells millions of dollars worth of MCAA into the United States each year.

"Today's case is yet another example of the antitrust division's continued commitment and ability to attack international cartel activity that harms American businesses and consumers," said Assistant Attorney General Charles A. James, who heads the department's antitrust division.

Also yesterday, the Justice Department said two of the world's largest publishing companies Thomson Corp. and Harcourt General Inc. will be required to divest property rights to textbooks in numerous college subjects and a computer-based testing business to resolve competitive concerns involving Thomson's acquisition of Harcourt assets.

Ms. Talamona said Reed Elsevier Inc., a large international publisher, will purchase all of Harcourt for approximately $4.6 billion and will then sell Harcourt's Higher Education and Corporate and Professional Services Groups to Thomson for approximately $2.06 billion.

She said the agreement, as originally proposed, would have been anticompetitive, resulting in higher prices and lower quality for textbooks and computer-based testing services.

Thomson and Harcourt are major publishers of textbooks for a number of college courses, and also own two of the largest providers of computer-based testing services: Prometric Inc. and Assessment Systems Inc.

The department's antitrust division filed a lawsuit yesterday in U.S. District Court in Washington. At the same time, the department filed a proposed consent decree that, if approved by the court, would resolve the lawsuit and the department's competitive concerns.

"Without these divestitures, college students would likely have paid higher prices for a variety of important textbooks. In addition, both professional organizations that offer computer-based tests, and candidates seeking to take those tests, would likely have faced higher prices and diminished innovation for such services," said Mr. James.

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