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CARTELS/ACRYLIC GLASS : GENERAL COURT CUTS ARKEMA'S FINE.

Fines imposed on subsidiaries that have participated in a cartel must be set at a level that ensures a sufficient deterrent effect, but the calculation must also take account of their situation at the time the fine is imposed. The EU General Court, ruling on 7 June, set aside the European Commission's decision fining Arkema and its subsidiaries for their participation in a methacrylate cartel because it failed to take account of their exact situation at the time. On the other hand, the court confirmed the fines for their parent companies, Total and Elf Aquitaine (Cases T-206/06 Total and Elf Aquitaine v Commission and T-217/06 Arkema France and others v Commission).

On 31 May 2006, the Commission found that Arkema and its subsidiaries - Altuglas International SA and Altumax Europe SAS - as well as Total SA and Elf Aquitaine SA, their parent companies at the time, had participated in a cartel in the methacrylate sector (also known as acrylic glass) from 23 January 1997 to 12 September 2002. The infringement consisted in exchanging information and implementing and monitoring price agreements. Arkema France and its subsidiaries were fined 219.1 million, Elf Aquitaine 181.35 million and Total, which intervened at a later date in the cartel, 140.4 million.

The companies disputed this decision before the General Court in two separate cases. The EU court rejected their arguments seeking annulment of the Commission's decision and confirmed the liability of Total and Elf Aquitaine for the infringement.

Based on settled case law recognising the presumption that a subsidiary does not decide independently on its conduct in the market, the court held that Total and Elf Aquitaine failed to prove that Arkema had acted independently on the market during the period of the infringement. The Commission consequently did not err in holding the parent companies liable for the unlawful conduct of their subsidiaries.

On the other hand, the court held that the Commission was not justified in imposing a 200% increase in the fine on Arkema France and its subsidiaries to ensure a deterrent effect. The increase was based on Total's global turnover, although Arkema was no longer controlled by the group as from 18 May 2006, when it was floated on the stock exchange, just a few days before the Commission's decision. The court found this increase to be excessive in view of Arkema's real situation and reduced it by 25%, thus lowering the fine on Arkema and its subsidiaries to 113.3 million.

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Publication:European Report
Date:Jun 8, 2011
Words:414
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