In 2001 the European Commission found that 11 producers of
special carbonless copy paper had operated a cartel between 1992
and 1995. It fined 10 of them a total of €313.7 million, granting
the 11th, South Africa's Sappi, immunity because of its cooperation
and the value of the evidence it provided.
The companies appealed to the CFI against the amount that they
were fined. They argued that the Commission had overestimated the
duration during which the cartel operated, that it had had only a
limited affect on the market, and that the Commission had wrongly
defined the roles of some of the companies.
The CFI agreed that the fines set for two of the companies were
too high, and it reduced them. UK firm Arjo Wiggins Appleton's fine
was reduced from €184.27 million because it was said to have
provided as much help as another firm whose fines were reduced by
50%. It was reduced by 50% rather than 35%, so fell to €147.75
million. Papelara Guipuzcoana de Zicunaga's fine was dropped from
€1.54 million to €1.309 million because the Court ruled that the
Commission had not established that the company participated in
market sharing practices.
The CFI refused to annul the overall decision against the
manufacturers of the paper. Carbonless paper is used to produce two
copies of a user's handwriting and is most commonly used in
delivery slips and banking forms.
The Commission found that a sophisticated price fixing and
profit maximising cartel operated at the highest levels of the
companies involved. The cartel agreed a timetable for coordinated
price fixes and even carved up the €850 million market between them
by percentage market share.
The Commission found that meetings had taken place at high and
middle management levels. Chief executives met together, while
regional or sales managers from the companies also met to create
and implement the plan.
"The conduct of the companies concerned constitutes a very
serious infringement of the competition rules laid down in Article
81 of the EC Treaty and Article 53 of the EEA Agreement," said a
statement from the European Commission.
Angelo Basu, a competition specialist with Pinsent Masons, the
law firm behind OUT-LAW.COM, said that collusion this sophisticated
is not a one-off event. "I don't think that there was an
extraordinary level of co-operation between the companies, it is
the sort of thing that has been found by the Commission, and the
Office of Fair Trading in UK cases, in a number of industries," he
said.
He said that the changes in the fine levels for the companies
were "technical reductions". "The reductions in fines don't
undermine the Commission's authority," he said.
The ruling, though, could give some comfort to the large number
of companies which appeal Commission fines, said Adrian Wood,
another competition specialist with Pinsent Masons. "Appeals are
taken to the CFI in over 80% of the Commission's cartel decisions
and the ruling by the CFI today will give modest hope to a few of
those appellants that some reduction in the fine level might still
be possible in appropriate circumstances," said Wood.
