Honeywell International Inc. and DuPont Co. are facing a European Union complaint for infringing antitrust rules over the only coolant that currently complies with standards on greenhouse-gas emissions. The European Commission may send the so-called statement of objections as early as next month, two people privy with the probe told Bloomberg.
The antitrust complaint is expected to intensify an investigation launched in 2011 aimed at Honeywell and DuPont's agreement to develop the chemical -- HFO-1234yf. The probe, prompted by French company Arkema, also looked into Honeywell's alleged "deceptive conduct" when the chemical was endorsed by a car-industry trade group, and whether it charges "fair and reasonable" license fees to competing company who want to produce it .
The new chemical "is currently considerably more expensive" than its predecessor, remarked David Smith-Tilley, a director at IHS Automotive in London. "With patent-protected supply plus a more expensive manufacturing process, a price premium will exist for some time."
The HFO-1234yf chemical is expected to be a lucrative product for the Honeywell and DuPont as it replaces ozone-depleting alternatives that are already barred in new vehicles sold in the EU starting in 2017.
Honeywell said in 2013 that it is targeting $1.5 billion in revenue from the chemical over five years. "Honeywell is confident that our practices are consistent with the law and that the commission will conclude that we acted in full compliance with European Union competition rules," company spokesman told Bloomberg in an e-mailed statement. [source: Bloomberg]