The Commission of the European Communities has fined seven major Community producers of stainless steel flat products for organising a cartel in contravention of Article 65 of the ECSC Treaty. This is the first decision against a market sharing and price maintenance agreement under the ECSC Treaty since 1980. A multilateral agreement entitled "Agreement on a voluntary system of delivery limitations for cold rolled stainless steel flat products" was made between all the major producers of cold rolled stainless steel flat products in the Community and producers in Sweden and Finland in May 1986. It was formally terminated in October 1988, after the companies had received a Statement of Objections. The main provisions of the Agreement were: - it covered all qualities, sizes, grades and qualities of cold rolled stainless steel flat products; - 17 national markets were covered, including all Member States and most of the EFTA countries; - a delivery quota system, establishing each company's market share and setting, on the basis of quarterly forecasts, the tonnages each company could sell in each quarter, in each of the 17 national markets covered by the agreement. Companies were fined for exceeding their quotas; - the setting up of a "Pricing Committee" which coordinated price rises. The Agreement is therefore contrary to Article 65(1) of the ECSC Treaty because it restricted production and shared markets. Furthermore, by restricting production levels and the freedom of producers to increase their sales in the countries covered, the agreement contributed to the maintenance of higher prices than would have been the case if free competition had prevailed. The fines are very much reduced from the levels that would normally be appropriate in cases of serious infringements of the competition rules, for a number of reasons. The Commission had previously established a quota regime for other steel products and the undertakings may have had the impression that the normal operation of the rules of competition had been modified. - 2 - The Spanish, Swedish and Finnish companies have not been fined. Acerinox, the Spanish undertaking, was subject to the transitional measures (1986-1988) set out in the Protocol of the Spanish Act of Accession which established quantitative export limits, administered by the Spanish government which restricted the ability of Acerinox to export to the Community during the period the unlawful agreement was in force. The Exchanges of Letters between the Community and Sweden and Finland had the effect of limiting the freedom of the Nordic companies, Avesta and Outokumpu, to sell in the Community. Although they signed the multilateral agreement, condemned by this decision, on their own initiative, they had previously made certain bilateral arrangements, at the request of their national authorities, and as suggested by the Commission. The individual fines imposed by the Commission on the different undertakings are as follows: ALZ nv Belgium 25 000 ECU Ugine Aciers de Chatillon et Gueugnon France 100 000 ECU British Steel plc UK 50 000 ECU Krupp Stahl AG FR of Germany 100 000 ECU Terni Acciai Speciali SpA Italy 100 000 ECU Thyssen Edelstahlwerke FR of Germany 50 000 ECU As the steel crisis is now over as the Commission has pointed out in its "General objectives for Steel, 1995" and the quota regime ended over 18 months ago, the steel industry must operate in a free and competitive environment. Although there were unusual circumstances in this case which have lead to much smaller fines than normal being imposed, the Commission will not tolerate any infringements of the competition rules set out in the ECSC Treaty. In future ECSC cases, fines would be on the same scale, for comparable infringements, as under the EEC Treaty. The Commission will in future take severe action against any steel producers attempting to form cartels or make less formal arrangements to restrictor control markets or prices.