DuPont, Honeywell face EU car-refrigerant antitrust probe
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BRUSSELS (Bloomberg) -- DuPont Co. and Honeywell International Inc. face a European Union antitrust probe over a refrigerant for car air-conditioning systems, according to four people familiar with the plan.
The European Commission will soon open a formal investigation to examine whether DuPont and Honeywell may have concealed their ownership of patents for the refrigerant before the car industry agreed to use the technology as a standard, said the people who couldn't be identified because the issue isn't yet public.
Honeywell and DuPont are expecting growth from the technology they jointly developed to meet EU environmental rules to cut greenhouse gases from air-conditioning systems. DuPont told investors this week that the low-emission refrigerant promises "nice growth and some healthy margins."
Honeywell's speciality chemicals division has said it expects coolants to help it make "extremely solid" profits.
EU Competition Commissioner Joaquin Almunia said earlier this month he planned to open "a high-profile case on standards" to follow an investigation into standards in the banking industry. Regulators want to make sure that intellectual property rights "are used to reward inventions and motivate innovation and not as tools to foreclose access for expansion in markets."
DuPont "has responded to inquiries from the European Commission regarding the competitive dynamics and intellectual property landscape" concerning the refrigerant, said Janet Smith, a spokeswoman for the Wilmington, Del.-based company.
Cooperation With regulators
"DuPont will continue to cooperate fully with this inquiry and is confident that the commission will conclude that actions taken by DuPont complied with applicable laws," Smith said.
Honeywell has "received requests for information from the European Commission about the new refrigerant" and is "fully cooperating," said Peter Dalpe, a spokesman for the Morristown, N.J.-based company.
"Honeywell is confident" that its "practices are consistent with the law and that the commission will conclude that we acted in full compliance with European Union competition rules," Dalpe said in an e-mail.
European Union regulators have had mixed success with antitrust cases over standards. The EU settled a probe of memory-chip designer Rambus Inc. in 2009 into so-called "patent ambush."
The practice involves patent owners hiding their intellectual property so they can demand royalties from other companies forced to use the same technology once it becomes a standard.
Phone chips
The commission dropped a four-year probe into Qualcomm Inc., the biggest maker of chips for mobile phones, started after competitors complained the chipmaker was charging excessive royalties on patents.
The refrigerant developed by Honeywell and DuPont was designed to replace ozone-depleting chlorofluorocarbons, which can't be included in new cars sold in the 27-nation EU from 2017. It was endorsed by the Society of Automobile Engineers, an industry group.
Honeywell and Dupont agreed last year on a joint venture to produce the refrigerant from the fourth quarter this year. The Brussels-based antitrust authority can fine companies up to 10 percent of yearly sales or require them to change the way they do business if it concludes that they harmed competition.
Amelia Torres, a spokeswoman for the commission, didn't immediately respond to an e-mail seeking comment.
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