Shell also participated in the cartel, the EC said, but was not fined because it blew the whistle on the cartel, which was led by Sasol. The investigation began with surprise inspections in April 2005, prompted by an application for immunity lodged by Shell under the 2002 Leniency Notice. Shell could not be reached by Lube Report for comment.

In addition, ExxonMobil, MOL, Repsol, Sasol, Shell and Total engaged in market allocation for the product, the commission said. ExxonMobil, RWE, Sasol, Shell, and Total also fixed prices for slack wax sold to end-customers on the German market, the EC charged. Slack wax, the raw material for manufacture of paraffin waxes, is produced in refineries as a by-product in manufacture of base oils.

The companies held regular meetings to discuss prices, allocate markets and/or customers and to exchange sensitive commercial information, the investigation found. The EC estimated Europes paraffin wax market at 500 million in value, and the cartel controlled about three-fourths of that for 13 years, the International Herald Tribune reported.

Within Shell, the cartel was called the paraffin mafia. Sasol employees referred to it as the Blauer Salon, after a hotel bar in Hamburg, Germany, where the first meetings of the cartel took place. Subsequent meetings took place at top hotels throughout Europe, including in Milan, Italy; Vienna, Austria; Budapest, Hungary; Paris and Strasbourg, France; and Munich, Germany.

Candles, food packaging, chewing gum and tires are among the consumer products affected by the price-fixing.

There is probably not a household or company in Europe that has not bought products affected by this paraffin mafia cartel, with all that implies in terms of paying over the odds, higher costs and economic damage, said Competition Commissioner Neelie Kroes. Such illegal cartel behavior cannot and will not be tolerated by the commission, and companies managers and shareholders should take note.

The ECs leniency program encourages firms to provide insider information on cartels. The first firm to do so is granted total immunity from fines. Other firms that follow suit may be granted a reduction in the amount of the fine.

From a market point of view, there will be financial impacts – with the sheer volume of fines – that will be significant for the smaller companies, Amy Claxton, principal of consultancy My Energy in Hummelstown, Pa., told Lube Report. Perhaps the entire industry is on notice to be more careful because it is a small and highly concentrated market. The market is still exceedingly short for paraffin wax, she added.

The companies named by the commission had varied responses to its announcement. Sasol acknowledged that some of its employees participated in the cartel and that their actions were illegal. It objected, however, to the amount of its penalty, noting that it was not involved in the cartel when it began. The paraffin wax business that Sasol now operates was owned at that time by Schumann. Sasol bought into the business in 1995 as a joint venture partner and bought out Schumann in 2002. Sasol management insisted it did not learn of the illegal activities until 2005 and that it took immediate steps to end them and began cooperating with the commissions investigation.

While a fine was expected, we didnt anticipate the magnitude of the fine, particularly in the light of, amongst other factors, not being the legacy owner, the company said in a statement issued Friday. We do not yet have the detailed reasoning from the EC and will study it, as soon as it is supplied, to clarify our next steps. As we see things now, it is our intention to appeal.

Companies can appeal the ECs cartel decisions before the Court of First Instance, and then before the Court of Justice of the European Communities in Luxembourg. The two courts can annul decisions in whole or in part, and reduce or increase fines.

Sasol was hit with the largest fine, 318.2 million, even after a 50 percent reduction for cooperating with the commission. The EC said it penalized Sasol most heavily because it acted as the leader of the cartel.

In May 2007, the U.S. Department of Justice decided to close its own investigation into Sasols wax business in the United States without taking any action against the company.

ExxonMobil said in a statement it deeply regrets its involvement, although limited, in the infringement of competition laws through the participation of a few of the companys former employees. After having received the full decision, the company will carefully study it and determine any further actions that need to be taken.

The commission fined ExxonMobil 83.6 million after a 7 percent reduction for cooperation.

Repsol conceded its participation but stated that the violations occurred prior to the installation of Chairman and Chief Executive Officer Antonio Brufau Niubo and current management. It also noted that it cooperated in the investigation, a fact that the commission cited in cutting Repsols fine by 25 percent to 19.8 million.

Hungarian refiner MOL sounded apologetic, allowing in a written statement that in the 1990s it did not at that time have sufficient internal controlling and audit systems which could have identified and filtered out a situation such as that identified by the EC. At the same time, the company said it will wait until it receives a detailed explanation before deciding whether to appeal. Mols fine was 23.7 million.

Other companies indicated they probably will not accept the findings and fines without a fight. Hansen and Rosenthal, which was fined 24 million, said it sees grounds for substantial legal objections to the investigation, and that it considers its penalty unjustified in terms of both substance and amount. Eni, which received a 29.1 million fine, stated it is firmly convinced it acted in full respect of EU antitrust rules and that it plans to appeal. It added that the commission estimated that Enis involvement was marginal and limited to the period between 2002 and 2005.

A spokeswoman for Total told Lube Report that the French energy giant has not yet seen the details of the commissions findings – not even the basis for the allegations. As a result, she said, officials cannot say whether its employees violated the law. Total will decide later whether to appeal. Total received the second-largest fine, at 128.2 million. RWE and Tudapetrol, both based in Germany, could not be reached for comment. Those companies received fines of 37.4 million and 12 million, respectively.