European Commission Proceedings (Flat Glass)

Further to its investigations in February and March 2005, the European Commission sent Statements of Objections to Saint-Gobain Glass France (glass for the construction industry) on March 12th, 2007, and to Saint-Gobain Glass France, Saint-Gobain Sekurit Deutschland and Saint-Gobain Sekurit France (automotive glass) on April 19th, 2007.

The two Statements of Objections, which were also sent to Compagnie de Saint-Gobain in its capacity as parent company of these entities, concerned an alleged breach of Article 81 of the Treaty of Rome.

In summary, the Statements of Objections claim that the above-mentioned glass subsidiaries contacted or met with one or more competitors to discuss pricing strategies or market share stabilisation, or to exchange illicit information.

Following a review of the case and the objections, Saint-Gobain Glass France did not challenge the allegations made in respect of its construction glass activity, while Saint-Gobain Glass France, Saint-Gobain Sekurit Deutschland and Saint-Gobain Sekurit France acknowledged the claims against their automotive glass businesses but challenge the scope given to certain such claims by the Commission.

In their responses to the Commission, the companies concerned nevertheless set forth a series of arguments based on the seriousness and duration of the alleged infringements, the amount of sales generated by the activities to be taken into account in the claim, and the impact of the repeat offence.

Compagnie de Saint-Gobain has formally denied any liability whatsoever for the allegations made in the two cases.

In a decision of November 28th, 2007 concerning its investigation into companies manufacturing glass for the construction industry, the European Commission held that Saint-Gobain Glass France had indeed violated Article 81 of the Treaty of Rome. Accordingly, Saint-Gobain Glass France was fined, jointly and severally with Compagnie de Saint-Gobain, an amount of €133.9 million.

Compagnie de Saint-Gobain and Saint-Gobain Glass France have decided not to appeal this decision.

After adjusting the amount of the provision set aside in respect of this fine for Construction Glass, and revising the provision for the automotive glass investigation to incorporate a higher sales basis (2007 rather than 2006 sales), the €650 million provision set aside in the first half of 2007 was increased to €694 million at December 31st, 2007.