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Brussels, 9 September 2011

Antitrust: Commission welcomes Court judgments in Italian raw tobacco cartel

The European Commission welcomes the judgments by the General Court (Cases T-12/06 Deltafina and T-25/06 Alliance One) which uphold a decision of 2005 fining Italian tobacco processors (including Deltafina and Alliance One and its subsidiaries) for operating a buying cartel in the Italian raw tobacco market (see IP/05/1315). The Deltafina judgment is very important because it confirms the Commission's policy of granting immunity to a cartel participant only if its cooperation is "full, continuous and expeditious" as stated in the Leniency Notice on immunity or reductions from fines.

The Court dismissed the actions brought by Deltafina and Alliance One in their entirety maintaining the fines of €30 million on Deltafina and a total of €24million on Alliance One, the parent company of tobacco processing companies Dimon and Transcatab, for having colluded during more than six years on the prices paid to growers and intermediaries in Italy and on the allocation of suppliers.

The Court's judgments confirm the Commission's position on important principles of EU competition law, such as the obligations of immunity applicants in the context of the Commission's leniency policy and the liability of parent companies.

In today's judgments, the Court confirmed that Deltafina had seriously breached its co-operation obligations as immunity applicant and that the Commission was right not to grant immunity in the end. This is because Deltafina revealed to its main competitors that it had applied for leniency before the Commission could carry out surprise inspections to find evidence against all presumed participants, putting the investigation at jeopardy. The Court confirmed that Deltafina had violated the duty of confidentiality contained in point 11(a) of the 2002 Leniency Notice by deliberately and voluntarily disclosing to its competitors in a meeting of the trade association that it had applied for leniency. The Court observed that it should at least have told the Commission about the disclosure.

With respect to the appeal of Alliance One, the Court upheld the Commission's assessment that the parent company was jointly and severally liable for the infringement, in line with previous case law. The Commission decision had found that a 100% ownership was sufficient to presume that the parent exercised a decisive influence on the conduct of its subsidiary.

The Court also agreed with the Commission on all relevant fining considerations (basic amounts, deterrence multiplier, mitigating circumstances).

In a judgment of 2010, the Court had already largely confirmed a decision of 2004 (see IP/04/1256) fining processors and producers associations (including Deltafina) for a similar cartel in Spain. It reduced the fine on Deltafina because it did not act as a cartel leader. There are a number of other appeals pending in the Italian case.

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