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Brussels, 26th April 2007

Competition: Commission welcomes Court of First Instance judgment in carbonless paper cartel case

The European Commission welcomes today’s judgments by the European Court of First Instance dismissing the actions by nine producers of carbonless paper against the Commission’s decision in December 2001 fining ten producers for a Europe-wide carbonless paper cartel (cases T-109/02, T-118/02, T-122/02, T-125/02, T-126/02, T-128/02, T-129/02, T-132/02 and T-136/02). The Court of First Instance confirmed the existence and duration of the cartel and the fines imposed on seven companies. The CFI, however, reduced the level of fine imposed on Arjo Wiggins Appleton PLC from € 184.27 million to €141.75 million and on Papelera Guipuzcoana de Zicuñaga SA from €1.54 million to €1.309 million. The total fine imposed by the Commission was €313.7 million; following the CFI judgement that has been reduced to €270.9. 86% of the fine has therefore been maintained.

On 20 December 2001, the Commission fined 10 producers of carbonless paper a total of € 313.7 million for participating in a Europe-wide cartel between 1992 and 1995 designed essentially to implement agreed price increases. The companies fined were the UK companies Arjo Wiggins Appleton Plc (€184.27 million) and Carrs Paper Ltd (€1.57 million), the German companies Mitsubishi HiTech Paper Bielefeld GmbH (€21.24 million), Papierfabrik August Koehler AG (€ 33.07 million) and Zanders Feinpapiere AG (€29.76 million), the French companies Bolloré SA (€22.68 million) and Papeteries Mougeot SA (€3.64 million) as well as the Spanish companies Distribuidora Vizcaina de Papeles S.L (€1.75 million), Papelera Guipuzcoana de Zicuñaga SA (€1.54 million) and Torraspapel SA (€14.17 million). The South-African company Sappi Limited was granted total immunity under the rules on leniency laid down by the Commission in 1996 as it was the first company to cooperate in the investigation and supplied decisive evidence of the cartel (see IP/01/1892). Subsequently, the proceeding relating to the appeal by Carrs Paper was discontinued in 2006 (OJ C 190, 12.08.2006, p. 20).

The judgment of the Court of First Instance

In April 2002, the fined producers of carbonless paper brought actions against the Commission before the Court of First Instance claiming that, inter alia, the duration of the cartel had been overestimated by the Commission, the cartel had only limited effect on the market, the Commission was wrong to conclude that some undertakings have knowingly participated in a single Europe-wide infringement and the Commission had erred in calculating the fines and defining the roles played by various undertakings.

In its judgement, the Court of First Instance rejects the applicants' arguments seeking annulment of the decision. As regards the fines imposed, it holds that the level of the fines set by the Commission for two companies must be reduced and rejects the remainder of the applications for reduction of fines. For Arjo Wiggins Appleton PLC, the Court of First Instance sets the level of fine to €141.75 million on the basis that the evidence provided by the company was of a similar quality to that provided by the company Mougeot. Thus, the Commission should have granted Arjo Wiggins Appleton PLC the same reduction on account of its cooperation as Mougeot, namely 50%, instead of the 35% it had been granted. For Papelera Guipuzcoana de Zicuñaga SA the Court of First Instance sets the level of fine to €1.309 million on the basis that the Commission had not established that the company participated in market-sharing practices, a factor which should have been taken into account when considering the gravity of the infringement.

The cartel

Carbonless paper - also known as self-copying paper - is intended for the multiple duplication of documents and is made from a paper base to which layers of chemical products are applied. Business forms, delivery slips and bank transfer forms are the most widespread application for carbonless paper, accounting for over 90% of total consumption. The customers are printers who buy the paper in reels (80%) and sheets (20%).

During the period of the infringement (1992-95), the Commission discovered that the members of AEMCP and three other European carbonless paper producers or distributors (Carrs, Divipa, Zicuñaga) put into effect an illegal plan aimed at improving the participants' profitability through collective price increases. The main objective of the cartel was to agree on price increases and on the timetable for implementing them. The market was worth around €850 million a year in the European Economic Area, i.e. the fifteen EU Member States plus Norway, Iceland and Liechtenstein.

The cartel members held meetings at two separate levels: general meetings at European level attended by chief executives, commercial directors or equivalent managers in the carbonless paper industry, and national or regional cartel meetings attended by national or regional sales managers, often together with the aforementioned senior managers. At the national and regional meetings the participants agreed on price increases and monitored the implementation of previously agreed increases.

In order to ensure implementation of the agreed price increases, a sales quota was allocated to the various participants and a market share was fixed for each of them at certain national cartel meetings. To help reach agreement on price increases and sales quotas and to monitor compliance with the agreements, the carbonless paper producers exchanged individual, confidential data (detailed information on their prices and sales volumes).

Statements by Sappi show that there were contacts of a collusive nature between the European manufacturers since the foundation of their professional body, AEMCP, in 1981 and in particular from the mid-1980s. However, the Commission confined its examination of the case to the period beginning in January 1992 until September 1995, where it had convergent statements from cartel members and firm evidence of regular collusion between carbonless paper producers of the cartel's existence.

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.

The Commission launched the investigation into this case in the autumn of 1996, after Sappi, invoking the leniency notice, informed the Commission of the existence of the agreement.

Inspections were carried out at the premises of several producers. Following these inspections and requests for information dated March and December 1999, the French company Mougeot approached the Commission, admitting that it had been a member of the cartel and offering to cooperate under the terms of the leniency notice. In July 2000 the Commission sent a statement of objections to the producers of carbonless paper and/or their parent companies. The companies submitted written observations and most of them were present at a hearing chaired by the Commission's Hearing Officer on 8 and 9 March 2001.

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