IP/07/1725

Brussels, 20 November 2007

Antitrust: Commission fines professional videotape producers over €74 million for price fixing cartel

The European Commission has imposed a total of € 74 790 000  fines on Sony, Fuji and Maxell for fixing prices for professional videotapes sold to customers in Europe, in violation of the EC Treaty’s ban on cartels and restrictive business practices (Article 81). Between 1999 and 2002, Sony, Fuji and Maxell managed to raise or otherwise control prices through a series of regular meetings and other illicit contacts. Sony's fine has been increased by 30% for obstructing the Commission's investigation during on-site inspections at its premises. Fuji's and Maxell's fines are reduced by 40% and 20% respectively because they co-operated with the investigation under the Commission's 2002 Leniency Notice (see IP/02/247 and MEMO/02/23). There was no immunity applicant in this case. For the calculation of the fines, the Commission applied for the first time its new 2006 Guidelines (see IP/06/857 and MEMO/06/256).

Competition Commissioner Neelie Kroes said: "This decision sends two warnings to companies engaging in cartel activities: first, the Commission can prosecute cartels effectively even without prompts from immunity applicants, and second, obstructing a Commission's antitrust investigation leads to severe penalties."

The Commission started an investigation on its own initiative with surprise inspections, carried out at the premises of Sony's, Fuji's and Maxell's European subsidiaries in May 2002. The inspections proved particularly successful as abundant evidence of cartel activities was found. However, a Sony employee refused to answer oral questions asked by the Commission's inspectors, in breach of Sony's obligation to answer, while another Sony employee was found to have shredded documents during the inspection.

Fuji and, at a later stage, Maxell co-operated with the Commission and submitted additional evidence. Sony only acknowledged its involvement after receiving the Statement of Objections (see MEMO/07/109).

The cartel

The cartel covered the two most popular professional videotape formats at the time of the infringement: Betacam SP and Digital Betacam, which in 2001 totalled annual sales of some €115 million in the European Economic Area (EEA). TV stations and independent producers of TV programmes and advertising films are the main customers of professional videotapes.

Sony, Fuji and Maxell, with a combined share of more than 85% of the professional video tape market, organised three successful rounds of price increases and endeavoured to stabilise prices whenever an increase was not possible. They also regularly monitored the implementation of the price agreements.

The evidence uncovered describes in detail eleven meetings during which Sony, Fuji and Maxell discussed and agreed prices and/or exchanged sensitive commercial information as well as continuous contacts intended to monitor the implementation of their cartel agreements.

Fines

This is the first Commission antitrust decision where the 2006 Guidelines on Fines have been applied (see IP/06/857 and MEMO/06/256). Under the new method, fines better reflect the overall economic significance of the infringement as well as the share of each company involved.

(*) Legal entities within the undertaking may be held jointly and severally liable for the whole or part of the fine imposed.

Action for damages

Any person or firm affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages, submitting elements of the published decision as evidence that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without these being reduced on account of the Commission fine. A Green Paper on private enforcement has been published (see IP/05/1634 and MEMO/05/489).

For more information on the Commission’s action against cartels, see MEMO/07/473.