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STAINLESS STEEL CARTEL COMMISSION FINES SEVEN MAJOR PRODUCERS A TOTAL OF 425 000 ECU

European Commission - IP/90/584   18/07/1990

Other available languages: FR DE

   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  restrict
or control markets or prices.

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