CHEMICALS/CARTELS : GENERAL COURT UPHOLDS FINES ON ELF AQUITAINE AND ARKEMA.
The European Union's General Court rejected the actions by Arkema France and Elf Aquitaine for annulment of a European Commission decision, upholding the fine of 59 million for their participation in a cartel on the market for sodium chlorate (product used for bleaching paper).
On 11 June 2008, the Commission fined a number of companies, including Arkema France and its parent company at the time of the facts, Elf Aquitaine, for their anti-competitive conduct on the sodium chlorate market. The cartel primarily consisted in the allocation of sales volumes, price fixing and the exchange of commercially sensitive information. The following fines were imposed: Arkema France and Elf Aquitaine: 22.70 million to be paid joint and severally; Arkema France: 20.43 million (for repeated infringement); Elf Aquitaine: 15.89 million (for deterrence).
In its judgement of 17 May (Cases T-299/08 and T-343/08), the court referred to case law establishing that a subsidiary that is wholly or almost wholly owned by its parent company does not freely determine its own conduct on the market. Since Elf Aquitaine owns more than 97% of Arkema France, the Commission did not commit an error in deciding to impute Arkema France's unlawful conduct to the parent company. The General Court added that the fact that the Commission did not impute responsibility to Elf Aquitaine in an earlier decision on the unlawful conduct of its subsidiary did not prevent it from doing so in the decision in question.
As regards the fines imposed on Elf Aquitaine, the court held that it was legitimate for the Commission to increase by 70% the basic amount of the fine for Elf Aquitaine alone for deterrence, considering its particularly high turnover, which makes it easier for it to mobilise the funds needed to pay the fine.
For the 9% increase in the basic amount of the fine imposed on Arkema France for repeated infringement, the court found that the Commission correctly relied on three earlier decisions (procedures in 1984, 1986 and 1994) that provided "evidence of Arkema France's tendency to infringe competition rules and not to draw the appropriate conclusions from previous penalties".
The court also held that the Commission did not commit an error in finding that Arkema France's cooperation in the administrative procedure did not justify granting it a reduction of its fine. First, the information it provided was not of significant value. Second, the court held that Arkema France was not entitled to a reduction in the fine outside the scope of the 2002 leniency notice since it did not establish that, without its cooperation, the Commission would not have been able in this case to impose penalties in full or in part on the cartel at issue.