Commission Decision

of 20 December 2001

relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement

Case COMP/E-1/36.212 - Carbonless paper

(notifed under document number C(2001) 4573)

(Only the English, French, German and Spanish texts are authentic)

(Text with EEA relevance)

(2004/337/EC)

TABLE OF CONTENTS

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THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community,

Having regard to the Agreement on the European Economic Area,

Having regard to Council Regulation No 17 of 6 February 1962, First Regulation implementing Articles 85 and 86 of the Treaty(1) as last amended by Regulation (EC) No 1216/1999(2), and in particular Articles 3 and 15 thereof,

Having regard to the Commission decision of 26 July 2000 to open a proceeding in this case,

Having given the undertakings concerned the opportunity to make known their views on the objections raised by the Commission pursuant to Article 19(1) of Regulation No 17 and Commission Regulation (EC) No 2842/98 of 22 December 1998 on the hearing of parties in certain proceedings under Articles 85 and 86 of the EC Treaty(3),

Having consulted the Advisory Committee on Restrictive Practices and Dominant Positions,

Having regard to the final report of the Hearing officer in this case(4),

Whereas:

1. PART I - THE FACTS

1.1. SUMMARY OF THE INFRINGEMENT

(1) The following undertakings, addressees of the present Decision, have infringed Article 81 of the Treaty and Article 53 of the EEA Agreement:

- Arjo Wiggins Appleton Limited (AWA),

- Bolloré SA (Bolloré),

- Carrs Paper Ltd (Carrs),

- Distribuidora Vizcaína de Papeles S.L. (Divipa),

- Mitsubishi HiTech Paper Bielefeld GmbH (MHTP),

- Papelera Guipuzcoana de Zicuñaga SA (Zicuñaga),

- Papeteries Mougeot SA (Mougeot),

- Papierfabrik August Koehler AG (Koehler),

- Sappi Limited (Sappi),

- Torraspapel SA (Torraspapel),

- Zanders Feinpapiere AG (Zanders).

(2) The infringement consists of participation of the members of the Association of European Manufacturers of Carbonless Paper (AEMCP) and three other European carbonless paper producers and/or distributors in a continuing agreement and/or concerted practice, contrary to Article 81(1) of the Treaty and Article 53(1) of the EEA Agreement (from January 1994) covering the whole of the Community and the EEA, by which they fixed price increases, allocated sales quotas and fixed market shares and set up machinery to monitor the implementation of the restrictive agreements.

(3)

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1.2. THE CARBONLESS PAPER INDUSTRY

1.2.1. THE PRODUCT

(4) The product concerned in this case is carbonless paper, which is also known as self-copying paper. Carbonless paper is intended for the multiple duplication of documents and is made from a paper base to which layers of chemical products are applied(5).

(5) The principle behind carbonless paper thus involves obtaining a copy by reaction between two complementary layers under pressure of handwriting or the impact of a computer printer or typewriter. The first layer, the transmitting coated back (CB) layer, is composed of microcapsules which contain colour formers. The pressure or impact bursts the microcapsules, thus releasing these colour formers which are then absorbed by the second layer, the receiving coated front (CF) layer. This CF layer is made from a reactive substance (or "activated clay") which reacts with the colour formers to give a sharp image.

(6) The following types of carbonless paper exist:(6):

- CB (coated back) is a carbonless paper coated with a transmitting layer containing microcapsules. This sort of carbonless paper is used as the top copy of the bundle. It is available in different grades: standard, for optical character reading, or coated lightly on the back to provide a better image.

- CFB (coated front and back) is a carbonless paper coated on the front with a reactive substance, intended to act as a chemical developer, and coated on the back with microcapsules. This type of carbonless paper is used as the middle sheet or one of several middle sheets. It is the central part of the bundle, which receives and transmits the copy. It is the most delicate sheet and is available in standard grade; there are also certain grades for special applications.

- CF (coated front) is a carbonless paper used as the last sheet, which is coated with a receiving layer of reactive substance on the front but no microcapsules on the back capable of bursting under pressure. This sheet is no different to ordinary paper, at least as regards its handling, and it is less delicate than the other sheets that make up the bundle. This type is available in a standard grade, another for optical character reading, a grade receptive on both sides, and certain grades for special applications.

(7) Each of the three types of carbonless paper is available in white and other colours, especially blue, pink, yellow and green. From these families of carbonless paper one can make up bundles of all kinds by inserting carbonless paper of one type or another depending on requirements.

(8) The composition of carbonless paper alone makes it necessary to handle carbonless paper carefully and protect it from pressure. This makes it necessary to take precautions for transport, storage and printing. Nevertheless, with existing techniques carbonless papers can be glued, folded, combined with other bases (cardboard, paper, carbon, plastics), made less sensitive if necessary, marked with pencil, ballpoint pen, typewriter, computer printer, telex or printing machine, made into ordinary bundles or self-separating ones, used for applications requiring optical character reading, etc.

(9) Business forms(7) have always been the single largest application for carbonless papers, accounting for over 90 % of total consumption(8). Other applications for carbonless papers include roll converting(9).

(10) Carbonless paper is sold in reels (80 %) and sheets (20 %)(10). Most carbonless paper producers cater for sheet demand by cutting reels into sheets, whereas some small specialised producers make directly sheeted products(11).

(11) Carrs implies that the carbonless paper reels and sheets form separate relevant product markets. Carrs argues that "the market for sheets is entirely separate in commercial terms from reels - both as regards production costs, pricing and distribution channels". Carrs also says that there are substantial differences between reels and sheets, which in Carrs' case can be evidenced by the differences in the technical specification of its carbonless paper sheet product, Signal Plus. For Carrs the distinction between reels and sheets arise from an understanding of their end-use and the needs of these end-users. Ultimately this means understanding the requirements of printers and the type of printing equipment they use(12).

(12) Printers use two types of printing press: reel-fed and sheet-fed. Reel-fed presses pull the paper through a press from a continuous reel. Sheet-fed presses push sheets through the printing press machine. According to Carrs the sheet-fed press requires paper sheets that are stiffer and more resistant to stress than reel-fed printers in order to achieve less wastage and high speeds. Carrs states that most printers tend to use either reel- or sheet-fed presses, but not both. According to Carrs it is not feasible for a printer to react to any changes in the relationship between the price of sheets and reels by switching from one to the other. It also implies that the cutting of reels into sheets would not be a viable alternative for printers using sheet-fed press(13).

(13) The Commission concludes that, since the cartel covers both the carbonless paper reels and sheets, for the purposes of this case it is not necessary to further define the product market.

1.2.2. THE MARKET FOR CARBONLESS PAPER

1.2.2.1. Supply

(14) Production of carbonless papers in Europe has increasingly become dominated by a relatively small number of major producers as smaller suppliers have withdrawn from the market(14). In the EEA all main producers belong to the Association of European Manufacturers of Carbonless Paper (hereinafter AEMCP). At the time of the infringement under consideration here the following companies were AEMCP members: Arjo Wiggins Appleton (AWA), Cartiere Sottrici Binda, Copigraph(15), Papierfabrik August Koehler, Papeteries Mougeot, Stora Feldmühle (later Stora Carbonless Paper and today Mitsubishi HiTech Paper Bielefeld)(16), Zanders Feinpapiere, Sappi(17), and Torraspapel. To a large extent these producers benefit from integrated production of base paper and chemicals.

(15) According to the MHA report, prepared for the AEMCP in 1996, the size of the EU carbonless paper market was some ECU 850 million in 1995. The report estimated that in the same year the west European (EEA and Switzerland) production capacity of carbonless paper was 1010000 tonnes, of which the AEMCP members accounted for 890000 tonnes (i.e. 88 %). When east European production capacity is added to that figure the total European capacity reaches 1035000 tonnes(18).

(16) At the time of the infringement, the AEMCP members accounted together for 85-90 % of carbonless paper sales in the territory that became the EEA in 1994. Estimated market shares of each of them (except Binda, not active anymore in the market after 1993) are presented in Table 1(a).

TABLE 1(a)

Market shares of AEMCP members in 1995 based on estimates made by Sappi and AWA((File pp. 217 (Sappi's document), 3262-3265 (AWA's document).))

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(17) In addition to the AEMCP members there are a number of non-integrated small producers, including forms printers who produce for their own in-house requirements or supply mainly local markets and buy in base papers ("support") and chemicals from other suppliers(19). The principal non-AEMCP companies include Carrs (UK), Fabriano (Italy), Hauffe (Germany), Bartsch (Germany), Zicuñaga (Spain) and Divipa (Spain). This Decision is also addressed to three of these small producers, namely Carrs, Divipa and Zicuñaga. In addition, two East European companies are known to be producing carbonless papers, namely Aero (Slovenia) and Krkonosské (Czech Republic)(20).

(18) Table 1(b) presents the overall size in 2000 of each addressee of the present Decision, as well as an indication of its relative importance on the EEA-wide carbonless paper market in 1994 and 1995. The figures provided are based on the companies' responses to requests for information and estimates of the Commission(21).

TABLE 1(b)

The size of the addressees and their relative importance in the EEA carbonless paper market((All turnover figures provided in the present Decision are given in ECU or Euro, as appropriate. Exchange rates used for Euro calculation are the official yearly (or, as the case may be, monthly) mean exchange rates published by the Commission for the calculation of turnovers.))

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1.2.2.2. Demand

(19) The principal clients in the self-copying paper sector are printers, who convert carbonless paper to business forms and rolls. Some printers use reels and some sheets. In 1995 the estimated number of reels printers in Europe was 2000, and the number of sheets printers 47000(22).

(20) Reels are sold either directly to reels printers or via merchants, whereas sheets are mainly distributed via merchants.

(21) According to Sappi, merchants have considerable market power, which is mainly due to production over-capacity(23). Merchants demand uniform and regular deliveries. They also require short delivery times and adaptation of deliveries to their needs of forms and sizes, in order to reduce their own stocks(24). Carrs explains that, according to its experience, merchants generally seek price increases in the sheets business wherever possible and encourage the producer to increase its prices(25).

(22) As carbonless paper is a branded product, there is strong relationship between suppliers and merchants. Suppliers tend to have a long-term relationship with their merchants. This is at least partly due to the high cost of switching merchants due to stocks carried by them and the investments made in promotion of a brand(26).

(23) According to Sappi, AWA, Stora and Torraspapel in particular carry out part or all of the distribution function themselves or through their own merchant companies. Some small producers, mainly supplying local markets, likewise often sell direct to customers. The other carbonless producers sell mainly to independent merchants(27).

1.2.2.3. Development of supply and demand in Western Europe, 1990-1996

(24) The Western European carbonless paper market is characterised by structural over-capacity. In 1995 the capacity utilisation rate was 65 %(28). Capacity has not increased over the last decade. Demand on the other hand fell in the mid-1990s, and this decline was expected to continue(29).

(25) The demand for carbonless copy paper grew rapidly in the 1980s as it replaced one-time carbon (OTC) paper. As the European market has matured, transactions have increasingly been carried out by electronic means, and this has hit demand. In 1990 consumption of carbonless in Western Europe (territory that became EEA in 1994 and Switzerland) reached just over 700000 tonnes; thereafter the growth in demand slowed to a standstill, and in 1995 and 1996 demand started to fall(30).

(26) In the mid-1990s consumption was highest in Germany, followed by France and the United Kingdom in joint second place. Italy was the fourth largest consumer in Europe, with the Benelux countries following in fifth place(31).

(27) There were sharp short-term fluctuations in west European consumption in the 1990s. The most dramatic of these occurred in 1994/1995 and in autumn 1996. According to a study carried out for the AEMCP in 1996 by Mikulski Hall Associates, "these fluctuations were generally accepted to be due largely to changes in stocks, resulting mainly from changes in price levels". However, the study did not point to specific changes in demand or supply conditions that would explain these fluctuations. The only development that can be clearly identified from the study is that growth in carbonless demand in Western Europe has been constrained for a number of years. The study draws attention primarily to the trend towards a reduction in the number of copies for multi-part sets. The most significant factor limiting demand for carbonless, however, was the reduced requirement for multi-part forms as a result of the growing use of electronic data interchange (EDI), electronic media and bar-coding, combined with the shift to non-impact printing (laser or ink jet)(32).

(28) In Western Europe, total deliveries by AEMCP suppliers remained rather stable between 1990 and 1996, at just 600000 tonnes, while volumes supplied by non-AEMCP producers fell from 112000 tonnes in 1990 to just over 70000 tonnes in 1996. Imports from outside Western Europe halved over the same period(33). In 1990 the share of imports was 1.4 %, whereas in 1996 it had dropped to around 0.7 %. Table 2 summarises changes in deliveries to and consumption in the European market(34).

TABLE 2

Delivery and consumption of carbonless paper: Western Europe, 1990-1996

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Source:

MHA report, December 1996.

1.2.2.4. Inter-state trade

(29) In the EEA the production of carbonless paper is concentrated and mills are located in five Community Member States: Belgium, France, Germany, Spain and the United Kingdom. Generally speaking, however, producers sell throughout the EEA, and transport costs do not seem to hinder trade inside this area(35).

(30) The Commission has detailed information on sales in the territory that became the EEA in 1994, by country, covering most of the reference period of the cartel, for the following companies: AWA, Divipa, Koehler, Mougeot, Sappi, Stora, Torraspapel, Zanders and Zicuñaga(36). The data shows that at the time of the infringement more than 56 % of these companies' aggregate sales in the EEA was outside their respective domestic markets (i.e. the countries in which their production sites were located).

(31) The reference period of the cartel was also characterised by significant trade flows between the Community and different EFTA countries. In 1994, substantial quantities of carbonless paper were sold to Austria, Finland and Sweden. From 1994 onwards trade flows also existed with Iceland and Norway. There is therefore substantial cross-border trade within the whole EEA territory.

1.2.3. THE PRODUCERS

1.2.3.1. Arjo Wiggins Appleton

(32) Arjo Wiggins Appleton p.l.c. was transformed on 29 November 2001 into Arjo Wiggins Appleton Limited. It is the parent company (hereinafter AWA) of the Arjo Wiggins group, which consists of more than 150 subsidiaries worldwide and is active, among others, in the manufacture and distribution of carbonless, thermal, fine, coated and speciality papers. It has substantial operations throughout Europe and in North America, as well as interests in other parts of the world. The group is the world's largest manufacturer of carbonless paper, with shares of more than 30 % of the European market and 50 % of the North American market. Carbonless papers were organised under the divisional name of Arjo Wiggins Carbonless Paper Operation (CPO) until in 1998 a Carbonless & Thermal division was created. AWA has carbonless paper mills in Belgium, France and the United Kingdom.

1.2.3.2. Binda

(33) Cartiere Sottrici Binda S.p.A, renamed Binda S.p.A in May 1996, produced carbonless paper until October 1993. At that point Binda ceased production and reached various option agreements with AWA on the sale of its trademark "Biplura" and several machines used in the production of carbonless paper. These options have not been fully exercised and AWA has acquired in 1995 the trademark "Biplura" and one machine from Binda. Binda continued to produce release and cast coated paper until August 1998, when it was liquidated(37).

(34) In this Decision, Binda is mentioned for the purpose of the description of the factual situation. However, in view of the disappearance of this undertaking and in the absence of any legal or economic successor, it is not possible for the Commission to address this Decision to any legal or natural person for the behaviour of Binda until October 1993.

1.2.3.3. Carrs

(35) Carrs Paper Limited (Carrs) has its registered office in the West Midlands, United Kingdom. The company's immediate parent company is Carrs (Birmingham) Limited, which is incorporated in England and Wales. Carrs produces and sells carbonless paper (almost entirely sheets) in the United Kingdom, and exports predominantly to Ireland and Denmark.

(36) Carrs has been an innovator in the carbonless market and led the change from blue to black carbonless in 1983. It was the first to launch laser/copier grades in 1991. In 1992 it launched the Signal Plus brand, a product it advertised as the first printer-friendly carbonless paper.

1.2.3.4. Copigraph

(37) Copigraph SA was a wholly owned subsidiary of a French company, Bolloré SA (formerly known as Bolloré Technologies SA) until November 1998, when AWA acquired it. Copigraph SA was part of Bolloré's special papers division. Bolloré produced base paper in its mill at Thonon which was coated at Thonon, at Copigraph's Malesherbes facilities in France and at the Wülfrath facilities belonging to Eupaco grafische Papiere GmbH & Co KG in Germany (Bolloré acquired Eupaco in 1992 and closed its coating facilities in 1995)(38). When Copigraph sold the finished carbonless paper, its main markets in the EEA were France and Germany.

1.2.3.5. Divipa

(38) Distribuidora Vizcaína de Papeles S.L. (Divipa) is a Spanish company, which buys large carbonless paper reels and converts them into sheets and smaller reels for sale in Spain.

1.2.3.6. Koehler

(39) Papierfabrik August Koehler AG, with its registered office in Oberkirch, Germany, is the parent company of the privately-owned Koehler group, and owns the entire capital of Reacto Papier GmbH, Hannover, and Koehler Kehl GmbH, Kehl. Koehler produces carbonless paper, fine paper and thermal paper

1.2.3.7. Mougeot

(40) Papeteries Mougeot SA (Mougeot) is a French company which is incorporated in Laval-sur-Vologne, Vosges, France, and is controlled by the [...](39) family. Mougeot produces carbonless paper in France and its principal export markets are the United Kingdom, Germany and Austria. In addition to carbonless paper Mougeot produces sanitary and household papers and diapers that are sold under the distributors' brands

1.2.3.8. Sappi

(41) Sappi Limited (Sappi) is an international company incorporated in the Republic of South Africa. It is the parent company of the Sappi group of companies.

(42) Sappi entered the European carbonless market in 1990 with the acquisition of the Transcript manufacturing plant from DRG in the United Kingdom. After entering the market it operated in Europe through its subsidiary Sappi UK Limited that set up in 1993 with another Sappi Limited subsidiary (Hannoversche Papierfabriken Alfeld-Gronau AG) a European sales organisation as a joint venture, Sappi Europe SA. From May 1995, Sappi Europe Limited was the European holding company to which Sappi UK Limited and Hannoversche Papierfabriken Alfeld-Gronau AG report(40). In April 1998, following the acquisition of KNP Leykam (Europe's largest producer of coated woodfree paper), the Sappi group was restructured, and now operates as two operating divisions, Sappi Fine Paper plc and Sappi Forest Products. The core businesses of Sappi Fine Paper are coated and uncoated woodfree paper, mechanical paper, coated and uncoated speciality paper, and release paper. Sappi Fine Paper's operations are managed through three regional subsidiaries, Sappi Fine Paper Europe, North America and South Africa. Sappi's carbonless paper mill, the Transcript mill, is owned by Sappi UK limited, a Sappi Fine Paper plc subsidiary.

1.2.3.9. Stora

(43) In 1990 the German paper producer Feldmühle Aktiengesellschaft was taken over by Stora Kopparbergs Bergslags AB, an international industrial group incorporated in Sweden and active in the production and sale of forest industry products, in particular paper, board, pulp and sawn timber. Stora Feldmühle was Stora Kopparbergs Bergslags AB's wholly owned subsidiary. Until the end of 1992 the carbonless paper operations of the group were carried on directly by Stora Feldmühle AG that was a member of the AEMCP. At the beginning of 1993 this business was confined to a new wholly owned subsidiary of Stora Feldmühle, which was named Stora Carbonless Paper GmbH (SCP). Stora Carbonless Paper GmbH produces carbonless paper in Germany and sells it throughout Europe.

(44) In November 1998 the Commission approved a concentration between Stora Kopparbergs Bergslags AB and a Finnish forest industry group, Enso Oyj. As a result of the operation, Enso Oyj acquired 100 % of the share capital of Stora Kopparbergs Bergslags AB. The new entity, Stora Enso Oyj (Stora Enso), started operations at the end of 1998(41).

(45) Immediately after the concentration was finalised Stora Enso sold a majority holding in its carbonless paper subsidiary Stora Carbonless Paper to Mitsubishi Paper Mills Ltd, and a minority holding to Mitsubishi Corporation, with effect from 31 December 1998. Stora Enso still has a minority holding in Stora Carbonless Paper GmbH, whose name was changed after the transaction to Mitsubishi HiTech Paper Bielefeld GmbH.

1.2.3.10. Torraspapel

(46) The Torraspapel group (Torraspapel) is primarily engaged in the manufacture and sale of high-quality paper products for printing, writing and other applications. The parent company of the group is Torraspapel SA. The group's carbonless paper operations are handled by a wholly owned subsidiary, Sarriopapel y Celulosa SA (Sarrió), that has a production site at Leitza, Spain. The group had no carbonless paper production until 1991, when Grupo Torras SA (the then parent company of the Torraspapel group) acquired, through its subsidiary Sarriopapel y Celulosa, the entire non-board paper activities of SarrióSA(42).

(47) In 1999 the CVC Group, a private equity provider active in the provision of fund management and investment advice services, acquired sole control of Torraspapel (Case No COMP M.1728). Before the acquisition CVC did not have any activities in the carbonless paper market.

(48) The group is the market leader on the paper markets in Spain, and has a strong presence in Portugal, France, Germany, Italy and the United Kingdom.

1.2.3.11. Zanders

(49) Zanders Feinpapiere AG (Zanders) is a German company incorporated in Bergisch Gladblach, with production sites in Bergisch Gladblach and Düren, both in Germany. Zanders produces mainly coated papers and cartonboard, and carbonless and speciality papers.

(50) Until January 2001 Zanders was affiliated to the US forest and paper products company International Paper, and was part of its International Division. International Paper's German subsidiary International Paper Deutschland Inc. & Co. Holdings KG owned approximately 72 % of Zanders' shares. International Paper ranks among the world's largest producers of high-quality printing and writing papers.

(51) On 14 November 2000 the Commission received a notification of a proposed concentration by which Metsä-Serla Corporation, a Finnish based forest industry company, was to acquire a sole control of Zanders Feinpapiere AG (Case No COMP/M.2245 - Metsä-Serla/Zanders). The Commission in December 2000 approved the concentration. On 3 January 2001 Metsä-Serla and International Paper completed Metsä-Serla's acquisition of the control of Zanders. On 6 April 2001 Metsä-Serla renamed itself M-real.

1.2.3.12. Zicuñaga

(52) Papelera Guipuzcoana de Zicuñaga SA (Zicuñaga) belongs to the Madrid-based Iberpapel group. Iberpapel Gestión SA, set up in 1997, is the holding and parent company of the group, which carries on various activities in the paper industry. Zicuñaga owns 100 % of Papeteries de l'Atlantique SA, located at Hendaye, France, which has produced carbonless paper since 1992.

1.2.4. THE ASSOCIATION OF EUROPEAN MANUFACTURERS OF CARBONLESS PAPER - (AEMCP)

(53) AEMCP was founded in 1981 by nine companies(43). It operated as an affiliated Product Group of the European Paper Institute (EPI) until the early 1990s, when the EPI merged with CEPAC, another paper industry trade association, to form the Confederation of the European Paper Industries (CEPI). After this merger the then chairman of the AEMCP, [an AWA employee] from AWA, started to organise a "reconstitution" of the association, aimed at formal and legal establishment of the association in Belgium. Consequently, on 13 September 1993 the following companies signed the new articles of association: Arjo Wiggins Appleton plc, Copigraph SA, Koehler AG, Papeteries Mougeot SA, Alfred Rose, Sappi Europe Ltd, Stora Feldmühle AG, Torraspapel SA and Zanders Feinpapiere AG. The association was approved as an international association under Belgian law in 1994.

1.3. PROCEDURE

1.3.1. ORIGIN OF THE CASE

(54) In autumn 1996 the paper products group Sappi provided to the Commission information and documents which gave the Commission reason to suspect that there was or had been a secret price fixing cartel in the carbonless paper sector, in which Sappi was operating as a producer. Sappi invoked the provisions of the Commission Notice on the non-imposition or reduction of fines in cartel cases (the Leniency Notice(44).

1.3.2. THE INVESTIGATIONS

(55) Further to Sappi's submissions, the Commission, by decisions dated 23 January 1997, ordered a number of carbonless paper producers to submit to investigations under Article 14(3) of Regulation No 17. These investigations were carried out on 18 and 19 February 1997 on the premises of the following undertakings: Arjo Wiggins Belgium SA, Papeteries Mougeot SA, Torraspapel SA, Sarriopapel y Celulosa SA, Grupo Torras SA.

(56) Investigations under Article 14(2) of Regulation 17 were carried out between July and December 1997 on the premises of the following producers:

- on 2, 3 and 4 July, Sappi Limited, Sappi Europe Limited and Sappi (UK) Limited;

- on 21 and 22 October 1997, Arjo Wiggins Appleton P.L.C., Arjo Wiggins Europe Holdings Ltd., Arjo Wiggins SA and its subsidiary Guerimand SA;

- on 23 and 24 October 1997, Papeteries Mougeot SA;

- on 6 and 7 November 1997, Torraspapel SA and Sarriopapel y Celulosa SA;

- on 20 and 21 November 1997, Unipapel, Sociedade Comercial de Celulose e Papel Lda;

- on 4 and 5 December 1997, Stora Carbonless Paper GmbH; and

- on 9 and 10 December 1997, Papierfabrik August Koehler AG.

(57) By mutual agreement with Sappi, a visit to the Brussels offices of Sappi's subsidiary, Sappi Europe SA, took place on 25 July 1997.

1.3.3. REQUESTS FOR INFORMATION

(58) On 8 March 1999 the Commission addressed requests for information under Article 11 of Regulation No 17 to Arjo Wiggins Appleton plc, Papeteries Mougeot S.A., Torraspapel S.A., Cartiere Sottrici Binda S.p.A., Carrs Paper Ltd, Distribuidora Vizcaína de Papeles S.L., Ekman Iberica S.A. and Papelera Guipuzcoana de Zicuñaga S.A. On 15 March 1999 requests for information under Article 11 of Regulation No 17 were also addressed to Papierfabrik August Koehler AG, Stora Carbonless Paper GmbH and Zanders Feinpapiere AG, and on 20 December 1999 to Copigraph S.A.

(59) Further requests under Article 11 of Regulation No 17 were sent to Carrs Paper Ltd, Stora Carbonless Paper GmbH and Torraspapel S.A.

(60) In the requests the undertakings were required to provide information regarding their price increase announcements, sales volumes, customers, turnover and meetings with competitors. The same questions were put to Sappi.

(61) AWA, Stora and Copigraph admitted in their replies to the request for information their participation in multilateral cartel meetings held between the producers of carbonless paper. AWA gave a list of "improper" meetings or groups of meetings between competitors from 1992 to 1998 where carbonless paper prices were also discussed, including discussion of historical trends, but also extending to an exchange of intentions regarding announcements of price increases(45). Most (and the best documented) of these meeting were held during the period 1992-1995. Stora admitted its participation in meetings with competitors at which "there was discussion not just of the general economic situation in the industry but of prices as well", but claimed that "the competitors did not reach agreement on price increases"(46). These meetings took place in the period between the end of 1992 and continuing till the middle of 1995. Copigraph admitted participation in meetings with competitors where "carbonless paper reels prices were raised"(47) and more specifically one Copigraph executive remembers attending two or three meetings in 1993 and 1994.

1.3.4. GENERAL STATEMENTS GIVEN BY THE PRODUCERS BEFORE RECEIVING THE STATEMENT OF OBJECTIONS

(62) Mougeot and Sappi have admitted participation in multilateral cartel meetings held between the producers of carbonless paper. As already described, Sappi provided the Commission with the evidence of the cartel's existence. After having received the request for information under Article 11 of Regulation No 17, Mougeot approached the Commission stating that it was willing to cooperate in the cartel investigation under the Leniency Notice. Mougeot admitted the existence of a carbonless paper price fixing cartel and its own participation in it between October 1993 and July 1995, and provided the Commission with information on the structure of the cartel and, in particular, on the individual price fixing meetings its representatives had attended(48).

1.3.5. THE ADMINISTRATIVE PROCEDURE

(63) On 26 July 2000, the Commission initiated proceedings in the present case and adopted a Statement of Objections against the following undertakings: Arjo Wiggins Appleton p.l.c, Binda S.p.A, Bolloré SA, Carrs Paper Ltd, Copigraph SA, Distribuidora Vizcaína de Papeles S.L., Iberpapel Gestión S.A., International Paper, Mitsubishi HiTech Paper Bielefeld GmbH (MHTP (Stora)), Mitsubishi Paper Mills Ltd, Papelera Guipuzcoana de Zicuñaga SA, Papeteries Mougeot SA, Papierfabrik August Koehler AG, Sappi Limited, Stora Enso Oyj, Torraspapel SA and Zanders Feinpapiere AG.

(64) All addressees of the Statement of Objections except Binda S.p.A, International Paper and Mitsubishi Paper Mills Ltd submitted written observations in response to the Commission's objections.

(65) The undertakings had access to the Commission's investigation file via a CD-ROM copy of the file, which was sent to them on 1 August 2000.

(66) In its reply to the Statement of Objections, Koehler argued that granting access to the file by sending a CD-ROM does not satisfy the Commission's own principles as laid down in its Notice on access to file(49) on the basis of case law. Koehler argued that the undertaking in question is unable to check whether the CD-ROM actually does contain all the documents available to the Commission that must be made accessible to it, whether the documents are complete as such or whether in the scanning documents have been recorded incompletely. Koehler made accordingly a request to have access to the file by way of consultation of the file on the Commission's premises in addition to the access to file given to it via a CD-ROM(50).

(67) With the CD-ROM the undertakings received an enumerative list of all documents in the investigation file (with a running page numbering), which shows for each document its degree of accessibility. In addition, Koehler has been informed that the CD-ROM gives the parties a full access to all documents obtained by the Commission during the course of the investigation, excluding only business secrets or other confidential information. Koehler was offered confirmation of that information by the Hearing Officer but has not made use of this possibility(51).

(68) An Oral Hearing was held on this case on 8 and 9 March 2001. The following undertakings took part in the Hearing: Arjo Wiggins Appleton p.l.c, Carrs Paper Ltd, Distribuidora Vizcaína de Papeles S.L., Mitsubishi HiTech Paper Bielefeld GmbH, Papelera Guipuzcoana de Zicuñaga SA, Papeteries Mougeot SA, Papierfabrik August Koehler AG, Sappi Limited, Torraspapel SA and Zanders Feinpapiere AG.

(69) In their written replies to the Statement of Objections Torraspapel(52), Divipa(53) and Zicuñaga(54) have contested any participation in any collusive agreement. However, most of the addressees of the Statement of Objections have admitted existence of the cartel and their participation in it.

(70) The undertakings which had previously admitted their participation in the cartel have to a large extent not contested the findings of the Commission described in the Statement of Objections except for the period after summer 1995. More precisely Sappi has indicated that its participation "ended prior to its approach of the Commission on 19 September 1996"(55). Mougeot has confirmed its participation to the cartel from September 1993 to summer 1995(56), as does Copigraph(57). AWA has not contested the facts set out in the Statement of Objections but regarding the period after summer 1995 indicates that "there were occasional meetings between sales managers at national level. [...] [S]ome of its individual national sales managers had not entirely broken contacts with their counterparts in other producers. [...] However, where it occurred it resulted from local initiatives by national managers and should not be viewed as a continuation of the cartel that existed until summer 1995(58)". Mitsubishi HiTech/ Stora has not contested the infringement over the period 1992 to summer/autumn 1995(59).

(71) Some undertakings that did contest any collusion in their replies to the requests for information from the Commission have admitted in their replies to the Statement of Objections their participation in the cartel. Carrs has admitted that it participated in the UK meetings during the period January 1993 to March 1997, the extent of Carrs participation varying over the period(60). Koehler has not contested some of the facts for the period from autumn 1993 to May 1995 inclusive(61). Zanders has not contested the description of the cartel made by the Commission for the period 1992 to autumn 1995(62).

1.4. DETAILS OF THE INFRINGEMENT

1.4.1. INTRODUCTION

(72) Most of the addressees have admitted participation in the cartel. However, these undertakings have sometimes given a different description and different times for the beginning and for the end of the existence of the cartel. The undertakings admitting the facts do never contest the existence of the cartel during the period from September 1993 to spring or summer 1995.

(73) As to the beginning of the period, Copigraph, Koehler and Mougeot deny any participation in the cartel before September 1993 and Stora (MHTP) before the end of 1992. However, statements made by Sappi suggest that there were contacts of a collusive nature between the European carbonless producers as long ago as the founding of their trade association, the AEMCP, in 1981, and in particular from the mid-1980s onward(63). The evidence provided by Sappi shows that there were cartel meetings starting in 1989 and continuing until a meeting on 2 February 1995 in Frankfurt.

(74) The Commission will in the present case limit its assessment from January 1992 onward, this date being the moment from which the Commission has converging statements from cartel participants and corroborated evidence of regular collusive contacts between carbonless paper producers.

(75) As to the end of the period, as described in the Statement of Objections, there is also some suspicion that at least some elements of the collusive arrangement put in place at the latest in January 1992 continued after September 1995. However, all parties except AWA, Carrs and Sappi deny any continuation of their participation in the collusion after September 1995 - including parties that admit their participation prior to that date (Copigraph, Mougeot, Stora, Zanders). Moreover, the statements made by AWA, Carrs and Sappi are substantially different from each other as to the nature and the dates of the alleged collusive contacts. Finally, the statements are not well enough documented nor corroborated by sufficient evidence to conclude that the behaviour at issue in these proceedings continued after September 1995.

(76) Therefore, the Commission will in the present case limit its assessment to the period up to September 1995, this date being the moment until which the Commission has corroborated evidence of the existence of the cartel.

1.4.2. BASIC PRINCIPLES OF THE CARTEL

1.4.2.1. Objectives

(77) The Commission's investigation revealed that the parties to the cartel agreed on an overall anti-competitive plan aiming essentially at improving the profitability of the participants by collectively increasing prices. In the framework of this global plan, the principal objective of the cartel was to agree price increases and also the schedule for the increases (effective dates of the increases). This was done by means of cartel meetings held at various levels (general, national or regional).

(78) Documentary evidence on the general cartel meetings shows that this plan was implemented through meetings where the participants agreed on several consecutive price increases expressed in percentage form for each EEA country. At the national and regional cartel meetings the cartel members agreed on percentage price increases and in most cases also monitored the implementation of the price increases fixed previously. In the case of the Spanish and Portuguese markets, instead of a percentage increase the parties often agreed on a target price for each type of the product (CB, CFB and CF). This target price was a minimum price.

(79) A document found on Sappi's premises explains the form of the agreed price increases, at least concerning the Spanish market, in the following way: "On the agreement taken, reels are discussed in terms of buying price, but sheets are discussed as selling price and is left to each supplier the margin he wants their merchants to obtain."(64). The terms "buying prices" and "selling prices" also appear in another document found on Sappi's premises, which summarises the price increases for the UK market from 7 February 1994 until November 1995(65). Given that sheets are mainly distributed via merchants, this means that sheet prices were agreed in the form of prices to merchants. Reels, on the other hand, are sold either directly to the end-users or via merchants, and it seems that reel prices were agreed in the form of prices to end-users. As this pattern of trade is common to all EEA countries, it is likely that the price increases were agreed in the same way for the whole area.

(80) As far as prices for reels are concerned, the producers also agreed to differentiate prices according to the purchasing power of the customer, at least on the Spanish and Portuguese markets. Three documents reporting on Spanish market meetings and one document reporting on a Portuguese market meeting show that the reels customers were divided into three groups - A, B and C - and that the agreed target prices for each of these groups were different(66). In addition, the document on the Portuguese market meeting, held on 9 February 1994, contains a "definition of a minimum price according to potential of purchases" and "customer classification according to potential of purchases"(67). During the investigation at Unipapel (Sappi's agent in the Portuguese market), [an Unipapel employee]* confirmed that clients were classified in categories A, B and C according to their purchasing power(68).

(81) In order to ensure implementation of the agreed price increases, in some national cartel meetings sales quotas were allocated and market shares were fixed for each participant(69). The agreements on volumes and market shares show the intention to avoid departures from the common scheme as well as to refrain from competition on other commercial aspects. The following statement by Mougeot illustrates this: "[an AWA employee]* added that this was a problem of prices rather than volumes, but that on the latter point he would see to it that the problems were sorted out as soon as we were participating in the restoration of profitability"(70).

1.4.2.2. Organisation

(82) Two levels of cartel meetings can be clearly distinguished - the general cartel meetings attended by chief executives, commercial directors or equivalent in the carbonless paper business, and the national or regional cartel meetings attended by national or regional sales managers, often together with those senior managers. Statements from Mougeot and Sappi support the Commission's conclusions on the structure of the cartel(71).

(a) General cartel meetings

(83) The EEA-wide planning and co-ordination of the cartel took place at the general cartel meetings convened under the cover of the official meetings of the trade association, the AEMCP.

(84) At the general cartel meetings the participants decided in principle on timing and the amount (in percentage form) of the price increases for each EEA country. They agreed on several consecutive price increases and for some months ahead.

(85) The AEMCP meetings functioned as cartel meetings at least from January 1992 until September 1993. From that date, separate general cartel meetings were held on the occasion of the official AEMCP meetings (either before or after) (see paragraphs 107) to (109)).

(86) The Commission has received copies of the minutes of the official AEMCP meetings starting from the meeting of 23 January 1992(72). Official AEMCP meetings were held five times a year from 1992 to 1995. Annex I, Table A lists official AEMCP meetings from 1992 onward and general cartel meetings for which there is documentary evidence, beginning with the meeting in September 1993 where separation of the trade association and cartel functions was decided.

(87) The AEMCP meetings were normally well attended, and at the time of the infringement all the then AEMCP members participated in those meetings: AWA, Binda, Copigraph, Koehler, Mougeot, Sappi, Stora, Torraspapel/Sarrió(73) and Zanders. Attendance was checked, and members were requested to explain reasons for any failure to attend. The minutes of the AEMCP meeting on 29 February 1996, for example, note that Sarriówas absent for the second time in succession, and that the chairman would contact the company and ask the reasons for its absence(74).

(88) The attendance of each producer in the official AEMCP meetings from January 1992 until summer 1995 is shown in the Annex I, Table B.

(b) National and regional cartel meetings

(89) The general cartel meetings were followed by a series of national or regional cartel meetings. The purpose of these meetings was to ensure market-by-market implementation of the price increases previously agreed at the general cartel meetings. It appears that the price increases, which were decided at the general cartel meetings by the senior managers, would not have been successful without participation of the regional and national managers.

(90) Concerning the reasons for holding cartel meetings market by market (i.e. separate national/regional meetings) Mougeot has stated that "AWA felt that unless the managers responsible for local markets were involved there was little chance of achieving the results hoped for, which explained the holding of meetings market by market". Mougeot continued by saying that: "the local managers were told by their superiors that they wanted a price rise, and had to decide between themselves how the rise should be secured in practice"(75).

(91) At the national and regional cartel meetings the price increases agreed at European level were confirmed or revised, if necessary, and adherence to the price increases agreed previously was checked. Mougeot's statement also confirms that the participants at these meetings agreed on steps to be taken to implement in practice the price increases.

(92) National and regional cartel meetings were usually held from one to three months prior to implementation of each price increase agreed at a general cartel meeting. Sometimes, however, a national cartel meeting too served to fix several consecutive price increases.

(93) The Commission has evidence that national or regional cartel meetings were held concerning the following markets: France, Portugal and Spain, the United Kingdom and Ireland(76), Austria, Germany, Italy, Benelux and the Nordic countries (paragraphs (129) to (188)).

(94) All the then AEMCP members attended some or all national or regional cartel meetings, and some non-members also attended several national cartel meetings. Of the non-members, in particular, Divipa and Zicuñaga attended the meetings concerning the Spanish market, and Carrs attended the meetings concerning the UK market.

(c) Other contacts between the producers

(95) Those cartel members who did not participate in a cartel meeting were informed by other cartel members of what had been decided, usually by telephone. Mougeot has explained how it received information on the concerted price increases if it did not participate in some cartel meetings: "Papeteries Mougeot received phone calls from one company or another, most often from AWA, announcing the details of price increases by market. This continued essentially until mid-1995"(77).

(96) Occasionally the agreed timetable for implementation of the increases needed to be revised, but there was neither time nor any necessity for a new meeting. On these occasions the competitors kept one another directly informed of their intentions regarding the course of conduct they were going to take. Usually this seems to have been done by telephone, and no traces were left, but there are two documents showing how AWA informed Sappi of its decision to revise some increase dates. The first document is a fax where AWA informs Sappi that the price increase of June 1993 should be withdrawn because competitors have failed to put up their prices(78). The second document, also coming from Sappi, says: "After our call I [a Sappi employee]* was advised by ARJ/W [Arjo Wiggins] that they have decided to go one month later in Scandinavia. E.g. 1/5/94"(79).

1.4.2.3. Monitoring system and sanctions

(97) The carbonless paper producers exchanged individual, confidential information in order to facilitate the reaching of the agreements on price increases and sales quotas and to monitor adherence to the agreements. During the national or regional cartel meetings the participants exchanged detailed and individual information on their prices and sales volumes(80). Mougeot has confirmed both the price and volume information exchange, and emphasised the role of AWA in this procedure(81).

(98) The official co-operation of the AEMCP members within the association includes the collection and distribution of statistical information on carbonless paper deliveries. Since the end of 1994 the statistical service has been run by Deloitte & Touche, and before that was run by COPACEL. AEMCP members supply individual data on a monthly basis to Deloitte & Touche, which collates the information and produced aggregated statistics for west European countries and combined statistics for both the other European countries and the overseas markets. These aggregated statistics provided for the AEMCP members do not identify the sales volumes of individual producers.

(99) However, on AWA's premises the Commission also discovered tables containing detailed information on individual carbonless paper producers' sales. The first type of table shows annual sales by individual producers in the years 1992, 1993 and 1994 and "forecast" sales for 1995 and "budgeted" sales for 1996 in the Benelux area(82). Tables of the same kind were also found on AWA's premises showing the individual producers' sales in the UK, Spanish and Portuguese markets in 1995 (and even 1996 and "forecasts" for 1997)(83). The second type of table lists individual producers' shares of the Dutch, Belgium/Luxembourg and total Benelux markets in 1993 and 1994, and "estimated" shares for 1995 (and "forecasted" shares for 1996)(84). Yet another set of tables shows the percentage growth or decrease in each producers' sales in the Benelux area in the periods 1993/1994, 1994/1995, 1995/1996 and 1992/1995(85). The market share and growth figures are given with an accuracy of one decimal place. All the tables are dated December 1995(86).

(100) Equally detailed market share figures (accurate to one decimal place) are shown in hand-written notes taken by Mougeot's representative at the meeting in Geneva on 6 December 1994(87). These notes list shares of the French market in 1994 and 1995 (1995 shares agreed in the meeting) for AWA, Copigraph, Zanders, Sarrió(Torraspapel), Koehler, Feldmühle (Stora) and Mougeot. Meeting minutes and company statements show that the cartel members also exchanged individual sales volume data(88).

(101) The tables found on AWA's premises and the minutes and notes of cartel meetings confirm that, in order to monitor the operation of the price-fixing and quota system, at least the AEMCP members exchanged their individual sales and market share figures outside the official arrangements for the collection and distribution of statistical information operating within the AEMCP.

(102) Standard form letters announcing price increases to customers were also used to ensure compliance with the price-fixing agreements. According to Mougeot, [an AWA employee]* required that the price increases should be announced by sending standarf form letters to customers(89). Mougeot has confirmed that AWA and "some of the main players on this market" used such price increase letters(90). The Commission has found and received from several producers numerous standard form letters.

(103) Mougeot claims that it received the competitors' price increase letters found on its premises from customers. Even if customers sometimes worked as the channel to transmit the information, it is clear that at least AWA kept its competitors directly informed of its price increase announcements. This is confirmed by a set of AWA's price increase letters to its customers found at Sappi's London offices with a signed AWA card "with compliments" from Arjo Wiggins Belgium s.a.(91).

(104) Mougeot's account of the meeting of 1 October 1993 indicates that there were sanctions for failure to comply with the agreements: "[an AWA employee]* said quite expressly that he would not tolerate any failure to follow this price increase and hat he would 'personally look after' anyone who did not 'play the game'"(92). When asked to describe the control mechanism and the reasons for the authority of [this AWA employee]* and AWA, Mougeot replied: "As far as we know there were no contracts, documents or legal circumstances which gave AWA any sort of authority. But they had a position of moral and economic leadership on the market. To the old manufacturers [he]* was the man who had successfully launched self-copying papier in Europe for AWA, and then secured encouraging results in the United States. AWA's financial and industrial weight enabled him to say that if any of these increases were not passed on AWA would make it its business to push the market right down by applying a price poliy that would leave most people high and dry. He showed quit clearly what he was capable of by crushing Binda in Italy"(93).

(105) AWA was (and still is) clearly the largest carbonless paper producer in Europe, with an EEA market share of approximately 30-35 %. It also had by far the largest production capacity, twice as much as the second or third competitor in the EEA. It appears, however, that AWA would not have been able to "crush" the largest of its competitors, Stora and Zanders.

(106) It appears that AWA's threats worked better on the smaller competitors. Mougeot claims that in view of the small scale of their production the sanctions and threats they received were limited to reprimands ("reproches"), to which they replied by promising to implement any future price increases. There are, however, indications that stronger measures were taken by AWA against Torraspapel (another smaller producer) in order to ensure compliance with the agreements. Indeed, in the French market meeting held on 6 December 1994 there was some disagreement between the cartel members on the accuracy of price increase and volume information exchanged in the course of the meeting(94). In order to verify the figures submitted, [an AWA employee]*, who doubted the figures supplied by Sarrió (Torraspapel), had asked and received permission to audit the information on Sarrió's sales volumes on Sarrió's premises(95).

1.4.3. THE CARTEL MEETINGS AND OTHER COLLUSIVE CONTACTS

1.4.3.1. General cartel meetings

(a) General cartel meetings up to restructuring of the AEMCP in 1993

(107) Sappi admitted that there was collusion between the competing manufacturers at regular meetings that took place at least from the beginning of 1992 onward. A Sappi employee stated that such meetings were held "at an EC-wide level" from 1991 onward. AWA admitted as well that such meetings took place as from the beginning of 1992. In addition, the period for which the Commission has extensive evidence of regular meetings and contact of a national or regional character begins in January 1992. The evidence relates in particular to meetings concerning the Spanish and Portuguese markets. Other meetings and contacts beginning at the same time concern the markets in France, Italy, the Nordic countries and the United Kingdom.

(108) Mougeot, which joined the AEMCP at the end of 1992(96), has given a statement concerning the contents of an official AEMCP meeting held in 1993, on the basis of which the Commission infers that the "reconstitution" of the association also involved a restructuring of the cartel. Mougeot says: "Probably on the occasion of the official AEMCP meeting in Frankfurt on 14 September 1993, or at the meeting before that, but certainly when [an AWA employee]*1993, or at the meeting before that, but certainly when [an AWA employee]* became head of AWA's self-copying division [he]*clearly decided to invite the main self-copying manufactureres on each market to thies unofficial meetings, and to change the organisation of the official AEMCP meetings. [He]* decided that from now on there would be a lawyer present at all AEMCP meetings in order to give them an official character and ensure that the proceedings were not open to criticism. Anything to do with prices would no longer be discussed at those meetings but only at 'unofficial' meetings, and to change the organisation of the official AEMCP meetings. [He]* decided that from now on there would be a lawyer present at all AEMCP meetings in order to give them an official character and ensure that the proceedings were not open to criticism. Anything to do with prices would no longer be discussed at those meetings but only at 'unofficial' meetings"(97).

(109) The statement quoted above shows that the election of [an AWA employee]* as the chairman of the AEMCP on 9 February 1993(98) triggered the subsequent restructuring of the cartel. Also according to this statement, at the AEMCP meeting of 14 September 1993 (or at the meeting before)(99) [An AWA employee]*. [An AWA employee]* informed other AEMCP members of his decision to start to organise carbonless paper producers cartel meetings outside those of the association. It appears that on the basis of AWA's proposal there was a consensus reached among the AEMCP members to seprate the trade association activities from the cartel activitites.

(110) As the first official AEMCP meeting with a lawyer was held on 18 November 1993(100), it appears that at least from that meeting onward the cartel activities were effectively moved from "official" AEMCP meetings to the "non-official" meetings, i.e. the general cartel meetings and the national/regional cartel meetings.

(111) Thus Mougeot's statement confirms that, before the reconstitution of the AEMCP, carbonless paper price-fixing agreements were concluded within the official AEMCP meetings, and, after that, those agreements were concluded outside those meetings.

(112) The following recollection of a Sappi employee who worked in Sappi Europe SA from February 1993 regarding his then superiors' and colleagues' participation in the cartel meetings confirms that prices were agreed at the official AEMCP meetings or at meetings held on the occasion of these meetings: "However, he admits that he had very strong suspicions, close to a degree of knowledge, that [two Sappi employees]* had been to meetings with competitors. He recollects that one or other of them would come back from meetings, including AEMCP meetings, with a very definite view on the price increases that were to be implemented and that they were relatively unconcerned by competitor reactions. He knew that they did meet competitors from time to time but was not aware of the details or structure. He assumed that the collusion related to prices and was EC-wide"(101).

(113) The Commission therefore concludes that, until restructuring of the association AEMCP and the cartel in September 1993, general cartel meetings already took place. The Commission infers from the Mougeot statement quoted in paragraph 108 that these meetings took place in the framework of the regular AEMCP meetings. The Commission has information on the dates and also minutes of the official AEMCP meetings since the meeting of 23 January 1992. The minutes of these meetings in the Commission's possession show that between January 1992 and the restructuring in September 1993 there were eight AEMCP meetings, all held in Zurich (see Annex I, Table A).

(114) The AEMCP meeting of 14 September 1993 was held in Frankfurt. Representatives of the following companies (all the then AEMCP members) attended this meeting and, therefore, participated in the restructuring of the cartel: AWA, Copigraph, Koehler, Mougeot, Sappi, Stora, Torraspapel and Zanders(102).

(b) General cartel meetings after the restructuring

(115) As regards the general cartel meetings held after the restructuring, the Commission has documentary evidence and statements which allow identification of the proceedings, outcome and participants of four such meetings:

- meeting on 19 January 1994 in Paris,

- meeting on 21 June 1994 in Frankfurt,

- meeting on 22 September 1994 in Frankfurt,

- meeting on 2 February 1995 in Frankfurt,

(116) All of those general cartel meetings were held on the occasion of an official AEMCP meeting.

(117) The first general cartel meeting in 1994, aiming at fixing and controlling the price increases of the first half of the year in the EEA, was held on 19 January in Paris(103). According to the minutes of the official AEMCP meeting of 19 January 1994, it opened at 13.55 and ended at 15.30(104). AWA has confirmed that the cartel meeting took place before the official AEMCP meeting and that AWA was represented in the meeting by [...]* (then Chief Executive, AWA Printing and Writing)(105) and [...]* (then Sales Director, AWA Carbonless Paper). As for the other participants, AWA says "This meeting is believed to have been attended by executives from some or all of Koehler, Stora-Feldmühle, and Zanders."(106). The Commission also has a travel expense form which shows that Koehler's representative in the official AEMCP meeting could have participated in the general cartel meeting before the official meeting(107). A copy of the diary of [a Mougeot employee]* shows that he was also in Paris on 19 January 1994(108).

(118) The Commission has found on Sappi's premises a table dated 21 January 1994 (two days after the meeting) setting out price increases for most EEA countries from January 1994 to May 1995(109). Some of these increases correspond to those shown in minutes of national cartel meetings held before the general cartel meeting of 19 January. The Commission has also evidence on implementation of the price increases set out in that table by those companies and some other carbonless paper producers. This all provides further evidence on the general cartel meeting and the agreements reached therein (see paragraphs to 189) to (206)).

(119) On 21 June 1994 an official AEMCP meeting took place in Frankfurt. According to the minutes the meeting opened at 11.00 and closed at 13.00(110). The official AEMCP meetings were normally well attended, and at the meeting of 21 June 1994 all AEMCP member companies (AWA, Copigraph, Koehler, Mougeot, Sappi, Stora, Torraspapel and Zanders) were represented. It appears that, following the established pattern, a general cartel meeting was held shortly before or after the official AEMCP meeting of 21 June. This is confirmed by a table dated 23 June 1994 (two days after the AEMCP meeting) setting out price increases for various EEA countries from 1 June 1994 to 1 October 1994(111) and the evidence on implementation of these price increases by the abovementioned companies (see paragraphs (207) to (216)).

(120) Another general cartel meeting, aimed at fixing price increases in the EEA, was held on the occasion of the official AEMCP meeting of 22 September 1994 in Frankfurt. The official AEMCP meeting opened at 11.00 hrs and ended at 13.30 hrs(112). The general cartel meeting was held just before that at Hotel Steinberger (Frankfurt), in the Jagdzimmer room starting at 08.30 hrs and it was convened by [an AWA employee]* ]*. Holding of the meeting is confirmed by AWA and Mougeot and by notes in the diary of Mougeot's representative(113). According to Mougeot, at the meeting [the AWA employee]* informed the participants of percentage price increases and the implementation dates decided country by country, and urged them to implement the same increases simultaneously(114).

(121) On the basis of the statements from AWA and Mougeot and travel expense forms of Koehler's and Stora's representatives(115), the Commission considers that representatives at least of AWA, Koehler, Mougeot, Stora and Zanders participated in this general cartel meeting. Tables found in Sappi, Torraspapel and AWA(116), setting out identical price increases, indicate that Sappi and Torraspapel were also represented at the meeting (see paragraphs (217) to (221)).

(122) The Commission has in its possession minutes of a general cartel meeting between the European producers of carbonless paper held on 2 February 1995 at Frankfurt airport(117). According to Sappi, the purpose of this secret meeting was to "discuss price increases in various countries"(118). On the same date there was also an official meeting of the AEMCP, which was held in a conference room at the Sheraton Hotel, at Frankfurt Airport, Terminal 1 and chaired by [a Koehler employee]*. The official meeting was held between 11.00 and 13.00 hrs and the participants continued with a lunch(119).

(123) The cartel meeting probably took place after the official AEMCP meeting. Sheraton Hotel had confirmed Koehler's reservation of a conference room for 25 persons from 11.00 until 18.00 hrs. Hand-written notes found on the premises of Koehler, dated 26 January, show that two different meetings were planned, of which the first is the official AEMCP meeting. The second meeting seems to be the cartel meeting, planned for a smaller group after the official meeting. The notes contain the following remarks on the time and place of the second meeting: "Room reservation for eight to ten persons, Airport Center, room No 19 ['room No 19' is written on the margin of the page], 2 February 1995 from 14.00 to 17.00 or 18.00, in the name of Koehler"(120).

(124) The minutes of the cartel meeting give the following list of participants(121):

- [three AWA employees]*

- [a Mougeot employee]*

- [two Zanders employees]*

- [two Stora employees]*

- [two Koehler employees]*

- [a Sappi employee]*

- [two Torraspapel employees]*.

(125) The Commission has pages from diaries, travel bills, tickets and oral explanations given during the investigations which prove that the representatives of AWA, Stora, Koehler and Torraspapel named in the cartel meeting minutes were in Frankfurt on the date of the meeting(122).

(126) Mougeot denies having participated in any cartel meeting on 2 February 1995, and says it knows nothing of a general price agreement of that date(123). Mougeot has provided statements and documents on its representatives' use of their time after the official meeting according to which [a Mougeot employee]* left Frankfurt at 14.33 hrs and [another Mougeot employee]* at 15.30 hrs(124). In any event it is clear from the evidence on Mougeot's participation in the price increase initiatives agreed in the meeting and the discussion concerning Mougeot's volume needs recorded in the meeting minutes that Mougeot did adhere to the agreements reached at the meeting (see paragraphs (237) and (250) to (251)). Therefore, its claim that it did not participate in the meeting is not relevant to the assessment of the case. The documentary evidence on implementation of the price increases agreed in the meeting provide further evidence also on other companies' participation (see paragraphs (228) to (240)).

(127) A document found on the premises of Koehler indicates that after the general cartel meeting of 2 February 1995 the parties had agreed to hold at least another three such meetings in 1995(125). Following the pattern already established, each of these meetings was to be held on the occasion of an official AEMCP meeting. The document, dated 14 February 1995, shows that [two Koehler employees]* (Koehler, the AEMCP chairman in 1995) and (Koehler, the AEMCP secretary in 1995) had arranged the reservation of meeting rooms for three AEMCP meetings(126) and after each of them for meetings in a smaller group(127) for 21 April, 28 June and 29 September 1995.

(128) The minutes of the official AEMCP meeting of 29 September 1995 report a dramatic drop in orders and deliveries in July, August and September. The minutes continues with the following statement: "the main problem in June were the increasing costs of raw materials and the fact that the paper price could not be increased as fast as necessary in the individual markets"(128). Discussion on the decline of the European carbonless market and on price development continued at the AEMCP meeting of 1 December 1995 and the AEMCP chairman, [a Koehler employee]*, emphasised that "every member has to make every effort to return to profitability in the carbonless sector". [He]* also went on to speak of the problem of over-capacity and declining carbonless prices in most countries, which he said would lead to zero profits and even to losses(129).

1.4.3.2. National and regional cartel meetings and collusive contacts

(a) General

(129) In addition to the general cartel meetings the Commission has been able to identify dates and often also venues of 20 national or regional cartel meetings between carbonless paper producers concerning the French, Portuguese, Spanish and United Kingdom (including Ireland) markets. Table 3 contains a list of these meetings. The Commission identified also other meetings for which the date cannot be established so precisely.

TABLE 3

National and regional cartel meetings from February 1992 until spring 1995.

>TABLE>

(130) For the meetings listed in Table 3, there is documentary evidence (including unofficial minutes) and statements detailing the object, proceedings, outcome and often also the participants.

(131) Participation of the carbonless paper producers, and their representatives if known, is shown meeting by meeting in Annex II. This identification of participants cannot be taken as exhaustive, as it has not been possible to establish all the participants for each meeting with certainty. For example the companies giving information on the participants have often indicated that there may have been also other participants in addition to those explicitly mentioned.

(132) In addition to the meetings listed in Table 3, the Commission concludes from AWA's and Copigraph's replies to the Commission request for information and from Sappi's statements that during the period 1992-1995 improper, anti-competitive contacts and meetings took place at least in the following periods and concerning the following markets(130):

- between 1992 and 1995 concerning the French, Italian, Portuguese and Spanish markets;

- between 1992 and 1995 concerning the UK, Irish, Benelux and the Nordic countries markets(131);

- between 1993 and 1994 concerning the Austrian and German markets.

(133) The information provided by AWA, Copigraph and Sappi, together with the documentation and statements concerning the meetings for the French, Portuguese, Spanish and the United Kingdom markets, indicates that the system of regular national or regional meetings covered the whole EEA territory.

(134) In addition to those national and regional cartel meetings there is a considerable amount of documentation on other anti-competitive contacts and meetings between carbonless paper producers during the same period. This documentation provides evidence of collusion in respect of the same markets, namely France, Portugal, Spain and the United Kingdom, and also Germany, the Nordic countries and Italy.

(b) France

(135) In its reply to the Commission's request for information, AWA has stated that there were meetings between competitors in Paris, Zurich and Geneva over the period 1992-1995 which were attended by [...]* (Sales Managers, Tenor brand France, AWA Carbonless papers) and sometimes by [...]* (then Sales Manager, Idem brand France, AWA Carbonless Papers), [...]* (then Sales Director, AWA Carbonless Papers) and [...]* (then Chief Executive, AWA Printing and Writing Papers)(132). According to AWA these meetings were among the "improper meetings ... at some of these ... carbonless paper prices were also discussed, including discussion of historical trends, but also extending to an exchange of intentions regarding announcements of price increases"(133).

(136) Sappi and Mougeot have in their statements confirmed holding of several French market cartel meetings. Based on the statements and documents from these two companies, the Commission has been able to identify dates and venues of eight of the cartel meetings held for the French market during the period from spring 1992 to spring 1995 (see Annex II for participants and Table 3).

(137) The first two of these meetings were held in Paris, one in spring 1992 and the other in spring 1993(134), both probably in April(135). Sappi states that the purpose of these meetings was "to exchange information, discuss customers and the prices that were being applied to those customers"(136).

(138) One French market cartel meeting was held on 1 October 1993 in Paris(137). An "attendance note" drawn up by Sappi's representative at the meeting records the outcome of the meeting(138). Both Sappi and Mougeot have admitted that the purpose of this meeting was to agree a price increase for the French market. The note of Sappi's representative shows that, in addition to price increases, participants also agreed "Q4 1993 quotas to allow price increases", that "merchants must be controlled" and that "AWA and Sarrio will make press releases re cost increases etc."(139).

(139) Mougeot's statement provides evidence of further five French market cartel meetings held respectively on 20 January 1994 in Châtillon, in spring 1994 in Nogent-sur-Marne, 6 December 1994 in Geneva, 20 January 1995 in Zurich and in spring 1995.

(140) The French market meeting of 20 January 1994 was held immediately after the general cartel meeting of 19 January 1994 in Paris and it was convened by [an AWA employee]*. The purpose of the meeting was to follow up the price increases of December 1993 (agreed in the meeting of October 1993) and to prepare an increase on the French market to take place on 1 April 1994(140).

(141) Another French market meeting was held in spring 1994. Mougeot has stated that it was probably held on 31 May at the Hotel Nogentel in Nogent-sur-Marne and that [an AWA employee]* convened this meeting also(141). Mougeot says that the object of this meeting was "monitoring the French market, price increase probably 1 July 1994" and that [an AWA employee]* "urged others to follow the price increase of 6 % which AWA intended to apply on 1 July 1994"(142).

(142) Regarding the meeting of 6 December 1994 held in the Mövenpick Hotel in Geneva, Mougeot has provided hand-written notes taken by its representative there(143). The Commission also has a page from the 1994 diary of [a Mougeot employee]*, which against the date of 6 December refers to Mövenpick, Geneva, and sets out some details of the meeting(144). The meeting reviewed the implementation of the price increases agreed previously, starting from the December 1993 increase and ending with the October 1994 increase. On the basis of the meeting notes, Mougeot confirms that for reels the following increases were decided at the following meetings:

- 10 % on 1 December 1993 decided at the meeting of 1 October 1993,

- 6 % on 1 April 1994 decided at the meeting of 20 January 1994,

- 6 % on 1 July 1994(145) decided at the meeting of 31 May 1994, and

- 10 % on 1 October 1994 [probably decided at a meeting on July 1994].

(143) As these increases were cumulative, the total increase was to be 36 %, whereas Mougeot increased its prices for reels by a total of only 29 %. Mougeot says that because of this [an AWA employee]* %. Mougeot says that because of this [an AWA employee] reproached it in the meeting for failing to comply with AWA's instructions(146).

(144) The note of Mougeot's representative on the meeting also sets out the following plan for the movement of the carbonless paper price from November 1994 until January 1996: "Nov 118 F, Decem. 132 F, Mi 95 ['mid-1995'] 165 F, Fin 95 ['end 1995'] 170 F"(147). This indicates that at the meeting the participants agreed on price increases and on their timing for the end of 1994 and for the year 1995. According to this scheme, the carbonless paper price was to be increased by FRF 70 by the end of 1995.

(145) Mougeot has stated that a 6 % increase for reels was agreed at the French market meeting of 6 December 1994, to be implemented on 1 January 1995(148). The general cartel meeting of 22 September 1994 referred to in paragraph (120), however, had agreed a 10 % increase for reels and a 5 % increases for sheets, both likewise to be effective from 1 January 1995 (see Table 6). The conclusion that these increases were in fact confirmed at the 6 December meeting is supported by the fact that at least AWA, Copigraph, Sappi, Stora, Torraspapel and Zanders announced these increases to take effect in January 1995 (Zanders's announcement concerned reels only).

(146) The next French market meeting was held on 20 January 1995 in Zurich. The participants at this meeting fixed a price increase for 1 April 1995 and reviewed the implementation of increases agreed previously. They also exchanged information on their individual sales volumes on the French market(149). The next French market meeting was held in spring 1995; at this meeting the participants agreed on price increases for July 1995 (see paragraphs (231) and (232))(150).

(147) There are also indications that in addition to the cartel meetings referred to in paragraphs (137), (138) and (139), two further French market meetings were held in 1994, one in July and another in October. Mougeot has stated that "Although we have no record or precise memory, it is likely that a meeting was held in July 1994 to prepare for a price increase in October the same year. Another meeting may have been held in October 1994"(151).

(148) AWA confirms in its reply to the Statement of Objections(152) that the meetings in spring 1992, spring and October 1993, 6 December 1994 and 20 January 1995 were among the "improper"(153) meetings between competitors referred to in its reply to the request for information.

(149) Those documents and statements from Sappi, Mougeot and AWA, together with some travel documents and diary remarks,(154) show that the following undertakings were represented at the French market cartel meetings: AWA, Copigraph, Koehler, Mougeot, Sappi, Stora, Torraspapel and Zanders. (See Annex II.)

(c) Germany

(150) In its reply to the Commission request for information AWA admits among the "improper" meetings four such meetings in Basel in Switzerland and in Ettlingen and Wiesbaden in Germany in 1993 and 1994, which were attended by [...]*, AWA Carbonless Papers' regional manager for Germany, Austria, Switzerland and Italy. According to AWA some or all of Koehler, Stora, Sarrió (Torraspapel), Hauffe and Eupaco(155) attended these meetings(156).

(151) Copigraph confirms that during the period 1993-1994 there were meetings between competitors, which were attended by the "joint Geschaftsführer" of Eupaco KG and Copigraph GmbH and executives from all the companies referred to in paragraph (150), including AWA. Copigraph recalls that in these meetings, one of which was held in Basel, "carbonless paper reels prices were raised"(157).

(152) The note by Sappi's representative in the French market meeting held in Paris on 1 October 1993 provides evidence of the planning of a German market meeting, which was scheduled to be held in late 1993: "Other markets; ... German meeting - 26.11.93"(158). Sappi has confirmed that this meeting took place and that its representative probably participated in the meeting(159). The exact number and identity of the participants is not known to the Commission.

(d) Spain and Portugal

(153) There is a large amount of documentation and statements providing evidence of collusion on the Spanish and Portuguese markets. These markets were characterised by the integration of producers into distribution. Copigraph and Sappi had sales offices in Spain and AWA and Torraspapel had their own merchant companies on the market. Divipa and Zicuñaga were both selling direct to printers. Only Koehler, Stora and Zanders (and until early 1994 also Sappi(160)) were not integrated into distribution in Spain (Zanders sold through Torraspapel). In addition, as already described at paragraph (17), two producers, Divipa and Zicuñaga were small non-integrated producers of carbonless paper sheets or small reels purchasing base papers and chemicals or even large reels ("jumbo reels") from other producers. The collusive contacts took place between all the producers (often qualified in the documentation as "distributors") including these small producers/processors.

(154) Concerning the Spanish and Portuguese markets, AWA admits among the "improper" meetings four such meetings in Lisbon and Barcelona between 1992 and 1994, which were attended by [...]* (then AWA Carbonless Papers' Sales Manager for Portugal) and [...]* (Area Manager for the Iberian Peninsula) and another three or four meetings in the period 1992 to 1994 attended by [...]* (then AWA Carbonless Papers' Sales Manager for Spain) with [...]*(161).

(155) Sappi admits its participation in the Spanish market cartel meetings starting from February 1992 and submits documents showing that there was a concerted price rise of ESP 10/kg at the beginning of February 1992 the application of which was discussed at cartel meetings on 17 February and 5 March 1992.

(156) The first document, a memo dated 9 March 1992 from Sappi's agent in Spain to Sappi Europe, speaks about a price increase of "PTAs 10.-" per kg at the beginning of February set as the target by the distributors (i.e. sellers of carbonless paper in Spain). The memo describes how difficult it was to have this price increase applied on the market. It mentions that "2) The merchants selling TRANSCRIPT seem to be the only ones, who have raised prices by PTAs 10.- per kg to all customers", "3) 'S' [Sarrió] claims that they have raised their prices to everybody", "4) The distributors selling 'K' [Koehler] have only in very few cases raised the prices ... Divipa has absolutely not raised prices" and that "5) WT [Wiggins Teape, today Arjo Wiggins Appleton] speaks loudly about the price increase and how firmly they stick to it". Sappi's agent argues in the memo that "... It is obvious that Sappi Europe cannot make the price go up, unless other suppliers follow", and suggests that Papelera Zicuñaga should also be integrated into the concerted price rises on the Spanish market(162).

(157) The memo indicates that the concerted increase of February 1992 was probably not followed by Koehler and Sarrió, who attempted to win over Sappi's customers. This led to the meeting of 17 February 1992. The gravity of the situation and the importance of the subject-matter of the meeting, of which [a Sappi employee]* informed [another Sappi employee]* by fax the same day, can be deduced from the haste shown by [the first one]*, who tried to contact [the latter one]* over a weekend: "I tried to ring you at the weekend regarding further information from our mutual friend at Sarrio but there was no reply and I assume you were out. I have spoken to [a Norandum employee]* today and the situation remains, to say at least, rather uncertain due to the conduct of Kohler and Sarrio. There is a meeting of interested parties today and I will be informed about this first thing tomorrow morning. I will phone you tomorrow to discuss"(163).

(158) The discussions continued in a meeting held on 5 March 1992. A memo dated 27 February 1992 from [a Sappi employee]* to his superior [a Sappi employee]* refers to "Carbonless market-Spain" and says that: "I have arranged to attend a meeting next week with other interested parties in Barcelona to discuss the recent moves that there have been in the Spanish market. The meeting is on Thursday 5th March and I will accompanied by [a Norandum employee]*"(164). Sappi has confirmed that this meeting between the European manufacturers of self-copying paper did take place. It maintains that the purpose was "to discuss recent moves in the Spanish market"(165). The increase of ESP 10/kg in February had apparently been applied only by Sappi, which had lost several customers as a result, and the situation which had arisen made it necessary to ensure that increases agreed in future would be applied by all the manufacturers on the market; this was no doubt discussed at the March meeting in Spain.

(159) Unipapel, Sappi's agent in Portugal has confirmed that on 16 July 1992 there was a cartel meeting in Barcelona regarding the marketsin Spain and Portugal. At this meeting it was decided to increase the prices of reels of self-copying paper in Spain and Portugal(166). According to Unipapel's representative, Sarrió (Torraspapel) and Stora were charging very low prices in Portugal, below the price of the base paper. He says that, in addition to Unipapel, the meeting was attended by representatives of Sarrió (Torraspapel), AWA and Koehler and that the purpose of the meeting was "to discuss price increases and market shares. The agreements are concerned mainly with 'reels'; there may be similar agreements regarding 'sheets', but he cannot confirm this". This shows that in the meeting an agreement was reached on price increases and market shares at least for reels. The Unipapel's representative indicates that there were more "meetings of this kind" and that in these meetings "information is exchanged on the quantities sold and the prices applied by each company"(167).

(160) Concerning the years 1993-1995, Sappi has submitted to the Commission evidence supplied by one of its employees on the operation of the cartel and, in particular, on price-fixing meetings between carbonless paper producers in Spain. Sappi says "he [the employee] had attended six or seven meetings in Barcelona with other suppliers. These meetings had taken place about four or five times a year. He believed that he had first attended such a meeting on 19 October 1993. He last attended a meeting in 1995"(168).

(161) As to the purpose and subject matter of the Spanish market cartel meetings in 1993-1995 Sappi says "the purpose of the meetings was to fix prices in the Spanish market" and "the meetings normally resulted in an agreed price percentage increase". Although Sappi claims that "the price agreements that were reached were never fully implemented or adhered to" it is clear that there was a concerted attempt to increase prices in the Spanish market(169).

(162) The Commission has several notes on Spanish market cartel meetings during the said period written by Sappi representatives in the meetings and one written by Mougeot's representative in a meeting. These notes record the outcome of the following meetings: 30 September 1993 in Barcelona, 19 October 1993, 3 May 1994 in Barcelona, 29 June 1994 in Barcelona and 19 October 1994 in Barcelona.

(163) Sappi has provided the Commission with a note written by its representative at the meeting of 30 September 1993 in Barcelona. The note shows that in the meeting an agreement was reached on "Q4 Quota" for each participant for year 1993 and on a price increase for both reels and sheets. There was also an agreement to "re-convene for confirmation that quotas adhered to"(170). Sappi has confirmed that the purpose of this meeting was "to agree on a price percentage increase"(171).

(164) Three further notes written by Sappi representatives record the outcome of Spanish market meetings held on 19 October 1993, 3 May 1994 and 29 June 1994(172). The last two meetings were both convened by [a Torraspapel employee]* and held in Barcelona whereas the location of the first meeting is not known. Also these meetings involved price-fixing. The note on the meeting of 3 May also shows that Torraspapel opened the discussion on price increases in the meeting.

(165) According to the note on the meeting of 19 October 1993 "all distributors ... except Copigraph" participated in the meeting(173). The note on the meeting of 3 May 1994 shows a table with prices for "today" ("hoy", i.e. 3 May 1994)(174) and 16 May 1994 and says that these prices were a result of "agreements between distributors" ("acuerdos entre los distribuidores"). The use of the term "distributors" in the meeting notes must be understood in the light of the fact that at the time of these meetings most of the carbonless paper suppliers selling in Spain were directly involved in distribution on this market, as already described in paragraph (153). Consequently, the Commission holds that the carbonless paper producers named in the meeting notes both attended the meetings and participated in the agreements on price increases reached in the meetings (see Annex II for participants).

(166) According to the notes on the Spanish market meeting of 29 June 1994, another cartel meeting for this market was scheduled for 23 September (the day after the general cartel meeting). It appears that around that date a Spanish market meeting or other collusive contacts took place whereby an agreement was reached on a price increase that was to be implemented on this market in November 1994. This follows from a Sappi internal fax, which indicates that the carbonless paper producers had agreed on a price increase for November 1994. The fax reveals that the Spanish market cartel leader, Torraspapel, had reduced prices, which the writer assumed would render the agreed November price increase ineffective: "Our leader (TP) [Torraspapel] has announced a price reduction of ESP 10, and everything suggests that the November increases will have no effect; so far no distributor has announced them"(175).

(167) The carbonless paper producers met again in Barcelona on 19 October 1994 to conclude another agreement on price increases for the Spanish market. A hand-written note of Mougeot's representative reports on this meeting. According to Mougeot, the meeting was convened by Torraspapel and the purpose of the meeting was "organisation of the Spanish market" ("Organisation du Marché Espagnol"). At the meeting, prices were fixed for the Spanish market depending on the size of the client(176).

(168) Concerning the Portuguese market, there was a cartel meeting in Lisbon on 9 February 1994, which was organised by Sarrió (Torraspapel), probably together with AWA(177). Sappi's agent Unipapel sent two faxes to Sappi on 31 January 1994 and 1 February 1994 concerning a forthcoming meeting between competitors and asking Sappi to confirm whether it would be represented at the meeting(178). As no one from Sappi was able to attend the meeting, [a Sappi employee]* told Unipapel by fax that they had to represent Sappi, and also gave him instructions to try to increase prices. Hand-written notes in this fax message shows that the presence of the agent as representative of Sappi at "secret mill meetings" was subject of discussion at Sappi(179).

(169) Unipapel sent a report on this "Portuguese market suppliers meeting 09.02.94" to Sappi Europe by fax dated 14 February 1994(180). In the oral explanations given during the investigation at Unipapel, the company representative claimed that he did not participate in the meeting, and that the information in the report was supplied by [...]*, the then AWA Carbonless Papers Sales Manager for Portugal(181). Even supposing that the representative of Unipapel did not attend the meeting, he was well informed on the outcome and communicated it to Sappi as something he had agreed to on behalf of Sappi.

(170) AWA confirms in its reply to the Statement of Objections that all the above-identified Spanish and Portuguese market meetings during the period 1992-1994 were among the "improper" meetings between competitors referred to in its reply to the request for information(182).

(171) Most of those documents on Spanish and Portuguese market meetings contain also a list of the participants while some of them give indirect indication on the participants. Often these participants are the same as those that AWA identifies as participants to meetings in the period 1992-1994(183). Sappi and Mougeot have confirmed and completed the participants identified in or deduced on the basis of the meeting reports originating from their companies(184). These documents and statement together with some travel documents and diary remarks(185) show that the following undertakings were represented in some or all of the Spanish and Portuguese market cartel meetings: AWA, Binda, Copigraph, Divipa, Koehler, Mougeot, Sappi, Stora, Torraspapel, Zanders and Zicuñaga (see also Annex II).

(172) In addition to those Spanish and Portuguese market meetings, Sappi has indicated several other dates for meetings between competitors concerning specifically the Spanish market. Sappi says that its employee who had always attended Spanish market meetings with [a Sappi employee]* from Sappi "believed ... that all the pages in his diary marked with [a Sappi employee]*'s name or initials indicated that meetings with competitors had been held. Relevant pages of his diary are attached ... and these show that meetings appear to have occurred on 24 January 1994, 18, 19 or 20 April 1994, 29 June 1994 ... and 19 December 1994."(186).

(173) That the price-fixing cartel continued on the Spanish market in 1995 is confirmed by a Sappi document that gives some details of attempted price increases on that market from February until September/October 1995(187). According to Sappi this document, dated 26 September 1995, is part of an internal survey of price movements on its main markets(188). Concerning reels, the document reads: "But, at the end, the increases agreed were the increases applied (keeping everybody at the same level except for Zicuñaga, 10 % lower). These increases are the result of secret agreements, so everybody coincides in date and amount. Big accounts always enjoy special prices, but we have not done any special operation"(189).

(174) As for the Portuguese market, a report by Sappi's agent, Unipapel, on a meeting held on 9 February 1994 says that at this meeting the participants agreed on a set of cartel meetings to be held concerning the Portuguese market in the following months in 1994: April, May, June, September and November(190). In all these months, except in May, official AEMCP meetings were also held. The provisional timetable for the Portuguese market meetings is consistent with the pattern of holding general cartel meetings on the occasion of the official AEMCP meeting and of holding national cartel meetings following each general cartel meeting.

(175) There is also evidence that the collusion continued in the Portuguese market in 1995. A fax from Unipapel to Sappi, describing the movement of reels prices, indicates that competitors had colluded on attempted price increases in Portugal from January to September 1995. The fax refers to "an intention to apply 15 % increase (no one respected)" on 1 January 1995, and says that on 1 April 1995 there was "again an intention to increase prices (no one respected)". On 1 September 1995 there was some "other intention to rectify prices"(191). During the first eight months of 1995 total market consumption in Portugal decreased by 4,4 %. Hence, it seems that the carbonless paper producers tried to offset their losses in sales volumes by collusive price increases.

(176) In his reply to oral questions during the investigation a representative of Unipapel described the Portuguese market and the reasons for the collusion by stating that "Customers were saying that all producers had increased prices at the same time ... There was a feeling that there was a market logic at the European level between the producers. Events in the Portuguese market could fit into this scheme."(192).

(e) United Kingdom

(177) Sappi has acknowledged its involvement in the carbonless paper producers' cartel activities in the UK market from 1989/1990(193). A memorandum from [a Sappi employee]* to [a Sappi employee]* dated 24 September 1990 refers to two "club agreements" reached in 1989, based on confidential discussions among "the UK market participants" in Zurich, aiming at increasing the price of carbonless reels. The document refers to another "pricing committee" meeting held on 15 January 1990 in Zurich and to "the March price increase" that "went through in the main quite successfully"(194).

(178) In addition, Sappi has admitted its participation in UK market cartel meetings on "various dates in 1992, 1993, 1994"(195). AWA has also admitted the existence of "improper meetings" during the period from 1992 to 1994 attended by [...]*, AWA Carbonless Papers' Regional Manager for the UK and Ireland(196).

(179) Sappi has submitted to the Commission evidence supplied by one of its sales employees who participated in those meetings in the United Kingdom(197). That employee confirms that "he attended three such meetings one in each 1992, 1993 and 1994. He also may have attended one or two (but not more) further meetings". He adds, "The practice of holding such meetings was already established by this industry when he entered carbonless sales". According to this statement, "two meetings had taken place at the Heathrow airport(198) and one at the Intercontinental Hotel in London".

(180) Based on the statements and documents from Sappi and Mougeot, the Commission has been able to identify dates and venues of two of the UK market cartel meetings held during the period from 1992 to 1994: a meeting on 14 January 1993 and another meeting on 9 November 1993.

(181) The meeting of 14 January 1993 was held at the Heathrow Business Centre at Terminal 2 at 10.00 and Arjo Wiggins "led" the meeting. On the subject matter of the meeting, from Sappi statements it appears that "[t]he meeting was primarily concerned with the exchange of information as to which supplier was selling to which customers, markets trends and expectations." According to Sappi "No agreement was reached"(199).

(182) The meeting of 9 November 1993 was convened and organised by [...]* then Sales Director of AWA Carbonless Papers and it was held in the Orlon hall at the London Sheraton Sky hotel at Heathrow airport. The object of the meeting was a price increase in the UK market on 1 February 1994(200).

(183) AWA confirms in its reply to the Statement of Objections that both of these meetings were among the "improper" meetings between competitors referred to in its reply to the request for information(201).

(184) The statements of Sappi, Mougeot and AWA together with some travel documents and diary remarks(202) show that the following undertakings were represented at the UK market cartel meetings: AWA, Binda, Carrs, Copigraph, Koehler, Mougeot, Sappi, Stora, and Torraspapel(203). (For details see Annex II).

(185) There is also evidence of collusive contacts in the UK market in summer 1993. As a "significant piece of documentary evidence in relation to the cartel's activities", Sappi has given the Commission a letter dated 2 August 1993 from [an AWA employee]* to Sappi referring to the UK market, which includes the following: "Idem [AWA brand] price increase June 93. It appears th