Following the recent adoption of the 2006 Guidelines on Fines, the European Commission ("Commission") has already applied them to two cartels in the last month. Both the professional videotape and flat glass sectors have been subject to the new fining calculations, which enable the Commission to reflect the overall economic significance of the infringement in the penalty.
A fine of over €74 million was imposed on Sony, Fuji and Maxell for their involvement in price fixing in the professional videotape sector. Both TV stations and producers of TV programmes/advertising films are the main purchasers of professional videotapes, annual sales of which totalled €115 million in 2001. With a combined 85% share of the market, the three companies were able to either increase or stabilise prices in order to manipulate the market in their favour.
The investigation into this cartel began in May 2002, with both Fuji and Maxell eventually co-operating with the Commission, thereby receiving 40% and 20% respective reductions in their fines. Sony, however, received no leniency whatsoever. Instead its fine was subject to a 30% increase due to aggravating factors. While one Sony employee refused to answer the Commission official's questions, another was found shredding documents during the course of the inspection. This increase in fine is a firm warning against companies that not only refuse to cooperate with the Commission, but also actively impede the investigative process. The €47 million fine imposed on Sony should also serve as a reminder of the importance of training employees in how to deal with a Commission inspection.
Last month, the Commission also handed out its fifth biggest fine to date, significantly larger than the total fines handed out in 2004 alone. The investigation into the four flat glass producers, Asahi of Japan, Guardian of the USA, Pilkington of the UK and Saint-Gobain of France, began in spring 2005. The offending companies hold a combined 80% share in the market for flat glass, a product mainly used in the construction sector. In 2004, the flat glass sales of these four companies in the EEA totalled €1,700 million.
The investigation revealed that the undertakings had met to agree price increases and minimum prices as well as exchanging commercially sensitive information. By applying for leniency, Asahi and its European subsidiary Glaverbel, escaped with a significantly reduced fine of €65 million, while the other three were hit with fines between €133 and €148 million. The total €486.9 million fine signals an attempt by the Commission to stamp its authority.
Most recently, the Commission has carried out dawn raids at the premises of several producers and importers of exotic fruits. This is the latest sector to be targeted as part of a cartel investigation. While the Commission has not disclosed the names of the undertakings, those involved should be wary of impeding the investigation. With the total fines for 2007 currently at €3.33 billion, the offending undertakings should be conscious of the opportunities to alleviate their potential fine, either through a leniency application or via the Commission's recently proposed settlement procedure.