Press and Information Division

PRESS RELEASE No 22/99

20 April 1999

Judgment of the Court of First Instance in Joined Cases T-305/94, T-306/94, T-307/94, T-313/94, T-314/94, T-315/94, T-316/94, T-318/94, T-325/94, T-328/94, T-329/94 and T-335/94

Limburgse Vinyl Maatschappij NV and 11 other PVC producers v Commission

THE COURT OF FIRST INSTANCE GENERALLY CONFIRMS THE COMMISSION DECISION FINING 12 PVC PRODUCERS FOR PARTICIPATING IN AN ILLEGAL CARTEL

However, the Commission fines totalling 19 250 000 euros are reduced in respect of three undertakings

In October 1983, following investigations conducted in the polypropylene sector, the Commission of the European Communities opened a file concerning polyvinylchloride (`PVC').

In March 1988, the Commission initiated proceedings against 14 PVC producers which resulted in the adoption of a decision by the Commission on 21 December 1988 penalising those 14 producers for infringement of the Community prohibition on cartels.

The Court of First Instance, by judgment of 27 February 1992, and the Court of Justice, by judgment on appeal of 15 June 1994, found serious procedural errors in the adoption of the 1988 decision, which was therefore annulled.

Following the judgment of the Court of Justice, the Commission adopted a fresh decision on 27 July 1994 against 12 of the producers concerned by the initial decision, correcting the procedural defects found by the Court of Justice. In its decision, the Commission found that those companies had infringed the Community prohibition on cartels by participating in an agreement and/or a concerted practice from August 1980, the producers having taken part in regular meetings in order to fix target prices and quotas, plan concerted initiatives to raise price levels and monitor the operation of those collusive arrangements.

The attached table shows the amount of the Commission fines for each undertaking.

The 12 undertakings concerned brought new actions before the Court of First Instance for annulment of the 1994 decision. They made a total of nearly 80 pleas, set out in over 2 000 pages of pleadings and examined by the Court of First Instance in a judgment of over 220 pages.

The undertakings raised a very large number of procedural issues, especially as to whether the Commission was entitled to adopt a new decision in 1994 when the initial decision of 1988 had been annulled by the Court of Justice for formal defects. The Court of First Instance rejected all those procedural claims.

On the merits, the Court has confirmed the existence of the infringement found by the Commission and the participation of the 12 undertakings in that infringement.

Concerning fines, the Court has rejected the pleas of nine of the undertakings in their entirety. The fines on those undertakings have therefore been confirmed.

The Court has, however, partially accepted the arguments of three undertakings, whose fines have accordingly been reduced.

In the case of Société Artésienne de Vinyle (SAV), the Court has found that, contrary to the applicant's submissions, the documents produced by the Commission are sufficient to establish that the company participated in the infringement. For the purposes of determining the fine, however, it held that such participation should be taken into account only in respect of the period from August 1980 to June 1981, and not in respect of the period between August 1980 and April 1983. Therefore, the Court of First Instance has reduced the fine imposed on SAV from 400 000 euros to 135 000 euros.

In the case of Elf Atochem SA and Imperial Chemical Industries Plc (ICI), the Court has held that, in determining the fine to be imposed on each producer, the Commission is entitled to take into account both the volume and value of the goods which are the subject-matter of the infringement and the size and economic strength of the undertakings concerned. The Court's investigation of the case showed that, in fixing the amount of the fine, the Commission took account of each undertaking's market share in order to ensure a proportionate allocation of the total fine between the various undertakings. The Court's analysis of the average market shares of Elf Atochem SA and ICI for the period between 1980 and 1983 led it to conclude that the Commission had exaggerated their market share and accordingly imposed too high a share of the fine upon them. The Court of First Instance has therefore reduced the fine on Elf Atochem SA from 3 200 000 euros to 2 600 000 euros, and the fine on ICI from 2 500 000 euros to 1 550 000 euros.

N.B.An appeal against this judgment of the Court of First Instance, on points of law only, may be made to the Court of Justice of the European Communities within two months of notification.

"PVC" CASES -SUMMARY