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Antitrust: Commission welcomes Court of First Instance judgment in organic peroxide cartel case
Commission Européenne - MEMO/08/490 08/07/2008
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Brussels, 8th July 2008
The European Commission welcomes today’s judgment by the Court of First Instance (case T-99/04) confirming the Commission's decision against AC Treuhand AG (AC Treuhand) of December 2003. AC Treuhand, a Swiss consultancy firm, appealed against the Commission’s decision that established Treuhand's involvement in a cartel in organic peroxide where main producers in Europe conspired to fix and raise prices and allocate customers of organic peroxide products for the production of plastic and rubber. In particular, the CFI confirmed that AC Treuhand – not itself a producer but offering secretariat functions to the cartel - had taken part and contributed actively and intentionally to an illegal cartel. It thereby upheld the symbolic fine imposed on AC Treuhand. This judgment confirms the validity of Commission enforcement of anti-cartel provisions also against companies that facilitate and contribute to the functioning of a cartel, even where they are not direct producers or distributors of the cartelised product or service.
On 10 December 2003, the Commission fined producers of organic peroxides in Europe (Atofina, Peroxid Chemie, Laporte, Perorsa) and the Swiss consultancy firm AC Treuhand for operating a cartel in organic peroxide products used for the production of plastic and rubber. The total fine was nearly €70 million(see IP/03/1700).
The contested decision found that from 1971 to 1999, the main producers of organic peroxides in Europe fixed prices, agreed on and implemented a mechanism for price increases, allocated customers and set up a system to monitor and enforce their agreements
The Commission found that AC Treuhand (the successor of Fides Trust AG) infringed EC Treaty rules on cartels and restrictive business practices (Article 81) for its facilitating role, by organising meetings, providing logistical assistance and participating in a set of agreements and concerted practices in the organic peroxides sector from 28 December 1993 (the date AC Treuhand took over activities from Fides Trust AG) to 31 December 1999. On these grounds, the Commission imposed a fine of 1000 Euros on AC Treuhand. The level of the fine was considered appropriate because this was the first time that a fine had been imposed on an undertaking which was not itself involved in the production or distribution of the product in question.
Court of First Instance judgment
AC Treuhand brought an action against the Commission before the Court of First Instance on 16 March 2004. In support of its application, AC Treuhand submitted that the Commission erred in finding it liable for the infringement of Article 81, given that it merely provided services to other organic peroxides producers and was not active on the market. The applicant alleged that the Commission had breached the principle of nullum crimen, nulla poena sine lege, (the principle of legality of sanctions) since the applicant was not a party to the anti-competitive arrangement that was held contrary to Article 81.
The Court of First Instance rejected that claim and upheld the finding of infringement (and the fine) against AC Treuhand. The CFI in particular found that the Commission has correctly established that AC Treuhand contributed to the organisation and holding of meetings and formation of agreements among producers of organic peroxides. More generally, the CFI confirmed that the participation of an undertaking, although not active in the market of the product by the cartel - as a "co-perpetrator" - is contrary to Article 81 of the EC Treaty. In the words of the CFI: "the Court concludes that any undertaking which has adopted collusive conduct, including consultancy firms which are not active on the market affected by the restriction of competition, could reasonably have foreseen that the prohibition laid down in Article 81(1) EC was applicable to it in principle. Such an undertaking could not have been unaware, or was in a position to realise, that a sufficiently clear and precise basis was already to be found, in the former decision-making practice of the Commission and in the existing Community case law, for expressly recognising that a consultancy firm is liable for an infringement of Article 81(1) of the EC Treaty where it contributes actively and intentionally to a cartel between producers which are active on a market other than that on which the consultancy firm itself operates" (para 150, emphasis added).
With regard to AC Treuhand's activity in this matter, specifically, the Court found that: "the applicant acted in full knowledge of the facts and intentionally when it made its professional expertise and infrastructure available to the cartel, in order to benefit from it, at least indirectly, in the course of implementing the individual agency agreements which linked it to the three organic peroxide producers". (emphasis added, para 156).
Organic peroxide products (or double oxygen bond organic chemical products) are used for the production of plastic and rubber (value of the market in the EEA in 2003 was approximately €250).
The decision found that during 1971-1999, the main producers in Europe fixed the prices of organic peroxide products, agreed on and implemented a mechanism for price increases, allocated customers and set up a system to monitor and enforce their agreements.
With a total duration of 29 years, the cartel was the longest-lasting cartel ever uncovered by the Commission.
The cartel was founded by Akzo (granted immunity from fine), Luperox (later Atofina) and Peroxid Chemie. Perorsa joined the cartel in 1975 and Laporte (renamed as Degussa UK Ltd.) joined the cartel in 1992, after it took full control of Peroxid Chemie.
Swiss consultancy AC Treuhand played a key role in the cartel from 1993 organising meetings, often in Zürich, producing 'pink' and 'red' papers with the agreed market shares which could not be taken outside AC Treuhand's premises and even reimbursing the travel expenses of participants to avoid leaving any traces about the illegal meetings.
The Commission found that the cartel was a very serious violation of Article 81(1) of the European Union Treaty and Article 53 of the EEA Agreement. It imposed the following fines:
- Atofina S.A. €43.47 million
- Peroxid Chemie GmbH & Co KG. €8.83 million
- Degussa UK Holdings Ltd. and
Peroxid Chemie GmbH & Co KG (jointly and severally) €16.73 million
- Peroxidos Organicos S.A (Perorsa) € 0.5 million
- AC Treuhand AG €1000
- Akzo (Akzo Nobel Polymer Chemicals B.V,
Akzo Nobel N.V, Akzo Nobel Chemicals International B.V) €0