Basf

FOUNDED IN 1865, BASF (Badische Anilin- & Soda-Fabrik) of Ludwigshaffen, Germany, pioneered the industrial manufacture of dyestuffs. In 2003, BASF operated more than 100 large manufacturing sites and supplied chemicals and plastics to customers in more than 170 countries.

In 1925, BASF merged with Bayer, Hoechst and three other companies to form I.G. Farbenindustrie AG. Between 1933 and 1945, I.G. Farben played a central role in the Nazi economy. During World War II, the company manufactured poison gas used at extermination camps, and employed forced labor and slave labor. The strength of the links between I.G. Farben and the Nazi regime prompted the Allies to order the dissolution of the company in 1945, and several company directors and senior managers were tried for war crimes and crimes against humanity.

In 1952, a newly formed BASF inherited the Ludwigshaffen manufacturing site, marking the beginning of a new phase of plastics-driven growth. From the 1960s onward, the company internationalized its manufacturing and marketing operations, moving into North America and Asia, and sought to vertically integrate its operations, acquiring or developing businesses making consumer products or high value-added products. The creation of a horizontally and vertically integrated company has made BASF vulnerable to accusations of price-fixing, and the company has fallen afoul of antitrust authorities in several countries. However, these cases pale in comparison to the recent case of vitamin price-fixing.

At the end of the 1990s, U.S. antitrust investigators uncovered a series of cartels to fix the price of vitamins led by Hoffman-La Roche and BASF, then the world's two largest producers of vitamins. In May 1999, BASF and Hoffman-La Roche pleaded guilty to charges brought by the U.S. Department of Justice that they led and participated in a worldwide conspiracy to raise and fix prices, and to allocate market shares for certain vitamins between January 1990 and February 1999. Hoffman-La Roche and BASF agreed to pay fines of $500 million and $225 million respectively. This prompted similar investigations by the antitrust authorities in Australia, Canada, and Europe.

The European Union investigation resulted in BASF, Hoffman-La Roche, and six other companies being fined record amounts for colluding to fix the price of vitamins. Hoffman-La Roche and BASF were fined approximately $462 million and $296 million respectively for participating in 12 separate cartels. According to the European Union Competition Commissioner Mario Monti, the case was “the most damaging series of cartels the commission has ever investigated.”