98/4/ECSC: Commission Decision of 26 November 1997 relating to a proceeding pursuant to Article 65 of the ECSC Treaty (Case IV/36.069 Wirtschaftsvereinigung Stahl) (Only the German text is authentic)
Date: 1997-11-26
Institutions: European Commission
Subjects: ECSC Treaty, Germany, exchange of information, infringement of EU law, inter-company agreement, iron and steel product

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COMMISSION

COMMISSION DECISION

of 26 November 1997

relating to a proceeding pursuant to Article 65 of the ECSC Treaty

(Case IV/36.069 Wirtschaftsvereinigung Stahl)

(Only the German text is authentic)

(98/4/ECSC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Coal and Steel Community, and in particular Article 65
thereof,

Having regard to the notification submitted on 28 May
1996 in the name of the Wirtschaftsvereinigung and 16 of
its members,

Having regard to the information transmitted to the
Commission pursuant to Article 47 of the ECSC Treaty
on 24 September 1996,

Having regard to the written comments
submitted
pursuant to Article 36 of the ECSC Treaty in the name
and on behalf of the parties on 29 April 1997 and taking
note of the fact that, by letter dated 12 May 1997, the
parties
to submit oral
comments,

formally waived their

right

Whereas:

I. FACTS

A. PROCEDURE

(1)

On 28 May 1996 an information exchange system
was notified to the Commission in the name and
on behalf of the Wirtschaftsvereinigung Stahl, the
German steel industry trade association, and 16 of
its members.

2-72, 2-73 and 2-74 for
the 16 undertakings
concerned and the past four years, the Commission
sent a statement of objections to the parties on 4
March 1997.

The parties submitted their comments on 29 April
1997. While they did not in any way dispute the
facts as set out in the statement of objections and
recounted below, they stated that,
in their view,
those facts did not constitute an infringement of
the competition rules.

B. THE PARTIES

(2)

(3)

The notification was submitted in the name of 16
German steel producers and that of the trade asso-
ciation to which they belong, the Wirtschaftsver-
einigung Stahl (1).

The Wirtschaftsvereinigung Stahl
(hereinafter
called the WV) is an association bringing together
almost every German steel undertaking and a
number of Belgian and Luxembourg associate
members.

Its object is to defend its members’ collective in-
terests. Its functions include keeping its members
informed of new developments and representing
them before national and Community authorities.

The WV is a member of Eurofer, an association of
Community steel undertakings and of national
associations of European steel undertakings.

A warning letter was sent to the association on 8
July 1996. In view of the extremely brief nature of
the notification and following a meeting with the
parties on 31 July, a request for information was
sent to them pursuant to Article 47 of the ECSC
Treaty. Following analysis of the reply comprising,
among other things, all the questionnaires 2-71,

(4)

The 16 notifying undertakings belong to six sep-
arate groups, namely: Usinor, Cockerill-Sambre,
Preussag, Arbed, Thyssen and Krupp.

(1) The names of the 16 notifying undertakings appear in bold

type.

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(5)

AG der Dillinger H(cid:129)ttenwerk (hereinafter called
Dillinger) produces ordinary steel and alloy steel
(excluding stainless steel), which it processes into
hot-rolled flat products. The French undertaking
Usinor, which, through subsidaries, produces steel
products of every shape and quality, holds 48,75 %
of
the share capital of Dillinger. Usinor is the
second largest steel producer in the Community
and the fourth largest
in the world. It controls
either alone or jointly the following producers of
steel (including finished products):

— in France: Sollac SA, Creusot Loire Industrie,
Unim(cid:130)tal, Ascom(cid:130)tal, Imphy, Lorfonte, Ugine,
Ugine Savoie, GTS, Allevard, Fortech and
Tecphy,

— in Germany: Dillinger

and its

subisdiary

Rogesa,

undertaking ARBED)

— in Spain: Sidmed (jointly with the Luxembourg
based
and Galmed
(jointly with the Luxembourg based under-
taking ARBED and the German undertaking
Thyssen Stahl AG),

— in Portugal:

Siderurgia Nacional Produtos
Planos
(jointly with the Dutch undertaking
Hoogovens, the eighth-ranking steel producer
in the Community),

(7)

(8)

— in Italy: La Magona (jointly with the Italian

(9)

undertaking Lucchini),

— in Luxembourg: SA Train (cid:133) Fil Esch-Schifflange

and Sogerail.

Dillinger is a member of both the WV and Eurofer.
Usinor participates in Eurofer thropugh the F(cid:130)d(cid:130)ra-
tion Fran(cid:135)aise de l’Acier.

(10)

(6)

EKO Stahl GmbH (hereinafter called EKO)
produces ordinary and alloy steel (excluding stain-
less steel), which it processes into hot-rolled, cold-
rolled and coated flat products

EKO is a subsidiary of the Belgian undertaking
Cockerill-Sambre, which,
through subsidiaries,
produces steel products of every shape and quality.
Cockerill-Sambre
seventh-ranking steel
the
producer in Europe and occupies a very prominent
position in the market for flat products. It controls
either alone or jointly the following producers of
steel (including finished products):

is

— in Germany: EKO,

— in France: Beautor, PUM and Haironville,

— in Luxembourg: Galvalange (with the Luxem-

bourg undertaking ARBED).

Cockerill-Sambre participates in Eurofer through
the Groupement de la Sid(cid:130)rurgie Belge.

Krupp Hoesch Stahl AG (2)
(hereinafter called
KHS) produces both directly and through subsidi-
aries steel products of every shape and quality.
KHS is the sixth-ranking steel producer in Europe.
Besided Krupp Thyssen Nirosta and Rasselstein,
which are also notifying parties (see below) and
which it controls
jointly with Thyssen, KHS
controls the following producers of steel (including
finished products) in Germany: Hoesch Hohen-
limburg, Krupp VDM, Krupp Edelstahlpro-
file, and HSP Hoesch Spundwand und Profil.

KHS is a member of the WV and Eurofer.

Krupp Thyssen Nirosta GmbH (hereinafter
called KTN) produces stainless steel flat products.
With a share of approximately 40 % of the flat
products market, it is the leading producer of stain-
less steel in Europe. KTN controls the only Italian
producer of stainless steel
flat products, Acciai
Speciali Terni.

Preussag Stahl AG (hereinafter called Preussag)
produces in Germany ordinary steel and alloy steel
(excluding stainless
steel), most of which is
processed into flat products and beams.

Preussag is a member of the WV and Eurofer.

(excluding stainless

Stahlwerke Bremen GmbH (hereinafter called
Stahlwerke Bremen) produces ordinary steel and
alloy steel
steel), which it
processes into flat products. Stahlwerke Bremen is a
subsidiary of the Luxembourg undertaking Arbed,
which through subsidiaries produces steel products
of every shape and quality. Arbed is the fourth-
ranking steel producer in Europe. It controls alone
or jointly the following producers of steel
(in-
cluding finished products):

— in Luxembourg: Profilarbed, Laminoir de Dude-
lange, Galvalange
(jointly with Cockerill-
Sambre (see above)), Ares, and Giebel (jointly
with Ewald Giebel),

— in Germany: Stahlwerke Bremen, Bregal (jointly
with the Finnish undertaking Rautaruukki and
the Japanese undertaking Itoh) and Stahlwerke
Th(cid:129)ringen,

— in Belgium: Cockerill-Sambre, Carlam, Segal
(jointly with the Dutch undertaking Hoogovens
and the Luxembourg undertaking ARBED) and
Delloye Mathieu,

(2) By Decision of 28 July 1997, the Commission authorized pur-
suant to Article 66 of the ECSC Treaty the merging of the flat
carbon-steel products activities of Thyssen Stahl AG and
Krupp Hoesch Stahl AG.

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— in Belgium: Sidmar, ALZ (stainless steel), Sikel,
Segal
(jointly with the Dutch undertaking
Hoogovens and the Belgian undertaking Cock-
erill-Sambre (see above)), Decosteel and Galtec
(jointly with the Dutch undertaking Hoogo-
vens),

— in France: Stul,

— in Spain: Aceralia.

(11)

Stahlwerke Bremen is a member of the WV and
Eurofer. Arbed participates in Eurofer through the
Groupement des Industries Sid(cid:130)rurgiques Luxem-
bourgeoises.

the fifth-ranking steel producer

Thyssen Stahl AG (3) (hereinafter called Thyssen)
produces both directly and through subsidiaries
steel products of every shape and quality. Thyssen
in Europe.
is
Besides KTN (see above) and Rasselstein (see
below), which are also notifying parties and which
it controls jointly with KHS, Thyssen controls
alone or jointly the following producers of steel
(including finished products):

— the market shares held for each of the products
by the producers on the German market and in
the Community,

— data on deliveries by each producer of

the
various ECSC products in each of the Member
States
qualities
combined,

(questionnaire

2-71),

all

— data on deliveries by each producer of

the
various ECSC products in certan third countries
and by geographic area (questionnaire 2-72),

— deliveries of steel on the national market by
product according to qualities and by consumer
industry (questionnaire 2-73),

— deliveries of certain qualities of steel by product
in each of the Member States (questionnaire
2-74).

The exchange is therefore concerned solely with
data on deliveries and on market shares.

2. Aggregation of the data

— in Germany: R(cid:148)hrenwerke Bous (jointly with
Mannesmann), Rasselstein Hoesch GmbH,
EBG Bochum,
Stahlwerk Oberhausen
GmbH, Walzdraht Hochfeld GmbH (4), and
WK Edelstahl Witten Krefeld GmbH.

(14) All the data exchanged are individual. All those
taking part in the system receive all the informa-
tion concerning the other producers, including that
relating to products which they do not themselves
produce.

— in the Netherlands: Nedstaal,

— in Spain: Galmed (jointly with the Luxembourg
based undertaking ARBED and the French
undertaking Usinor (see above)).

Thyssen is a member of the WV and Eurofer.

C. THE NOTIFIED AGREEMENT

(12)

(13)

The notified agreement is an information exchange
agreement. According to the parties, the agreement
is informal (formlose Vereinbarung). Participation
is voluntary.

1. Nature of the information

The exchange relates to questionnaires 2-71 to 2-74
ECSC (5) and to the market shares of producers in
Germany. These questionnaires, which were drawn
up by the Commission, are transmitted to it
pursuant
the ECSC Treaty to
enable it to ‘carry out its duties laid down in Article
3 of the ECSC Treaty’. The notifying parties have
decided to exchange:

to Article 47 of

(3) See footnote 2.
(4) This undertaking has been acquired by the ISPAT group after

the notification.

(5) Commission Decision No 1566/86/ECSC (OJ L 141, 28. 5.
1986, p. 1), as last amended by Decision No 3641/92/ECSC
(OJ L 376, 22. 12. 1992, p. 1). The data are processed by the
Statistical Office. They are aggregated and serve as a basis for
the production of detailed statistics.

(15) Market shares are calculated by determining the
ratio between the deliveries by each producer and
total deliveries in Germany calculated as follows:

Deliveries in Germany (questionnaire 2-71)

+ Intra-Community deliveries

(statistics of

the

SBA (6))

+ Imports from third countries (statistics of the

SBA)

5 Statistical corrections

= Deliveries on the German market

(16)

The data are presented by product and by country
of delivery. Cross-checking between questionnaires
2-71 and 2-74 makes it possible to break down
deliveries by quality of steel.

A distinction can be made between 45 different
products and eight qualities of steel.

With regard to deliveries on the German market
(questionnaire 2-73), a distinction can be made
between 28 different consumer sectors.

3. Age of the data

(17)

The data are exchanged at the end of the month
following the period to which they relate. What is
involved, therefore, is a monthly exchange of recent
data (one month old).

(6) Statistisches Bundesamt.

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4. Structure of the system

Decision 94/215/ECSC (9) in the field of beams).
The main Community steel groups were involved
in these cases.

(18)

The WV collects the data from the various under-
takings which send them to it in different forms
(letter, electronic mail, etc). The exchanged data are
not made available to third parties.

(22)

Its employees are independent of
Data are not discussed at members’ meetings.

its members.

(19) Only 16 undertakings out of the 74 members of
the WV have notified their participation in the
system, but the stated objective of the WV is that
all should join in the not-too-distant future. The 16
notifying undertakings account for 94 % of all de-
liveries by German undertakings of flat products
and 27 % of all deliveries of long products (in-
cluding 100 % for sheet piling and 80 % for per-
manent way material).

D. THE PRODUCT MARKETS

1. The steel industry: general remarks

(20)

Between 1977 and 1988 the Community steel
industry was governed by more or less binding
production quota or delivery arrangements coupled
with measures concerning prices and external trade.
These arrangements came to an end on 30 June
1988. The Commission nevertheless introduced a
system for monitoring production and deliveries by
producers in the Community and in third coun-
tries. As part of this system, each undertaking was
required to declare its deliveries to the Commis-
sion. The system expired in 1990. Faced with a
worsening situation in the steel industry, in March
1993 the Commission adopted guidelines relating
to production and deliveries of
steel products
within the Community market (7). These guidelines
for
were
products within their product range. Following a
marked improvement in the situation in the steel
market in 1994, the Commission decided to ter-
minate the measure.

communicated to

all undertakings

(21)

In the course of the last seven years, the Commis-
sion has adopted two Decisions relating to infringe-
ments of Article 65 of the ECSC Treaty (Decision
90/471/ECSC (8) in the field of stainless steel, and

(7) OJ C 83, 24. 3. 1993, p. 6.
(8) OJ L 220, 15. 8. 1990, p. 28.

The steel industry is highly capital-intensive, espe-
cially in the flat-products sector. There are there-
fore considerable barriers to entry, linked to the
initial cost of the necessary investment. Fixed costs
are very high. The steel
industry suffers from
chronic overcapacity due among other things to the
size of the exit barriers. To help reduce these, in
financial
1993 the Commission authorized a
mechanism facilitating the closure of production
capacity for heavy sections, hot-rolled wide coils
and strip, and reversing-mill plate (10).

(23) Until the 1980s, steel undertakings had often been
public undertakings with a very distinct national
character. Major merger operations and the forma-
tion of new undertakings have led to the emer-
gence of European groups with plants in a number
of Member
flows
States. Nevertheless,
between Member States are remarkably stable.

trade

(24)

(25)

Except in the case of stainless steel, consumption
of which is increasing, the European steel markets
are mature markets. The products made by the
various producers are homogeneous. As a rule
customers have no preference between one supplier
and another: the quality of products is transparent
and the various parameters (delivery periods, trans-
port costs, etc.) easy to compare.

Steel undertakings are required pursuant to Article
60 of the ECSC Treaty to publish their price lists.
This obligation is discharged by sending the lists to
the Commission at least two working days before
they enter into force. Undertakings are also obliged
to communicate their lists to any interested party
who so requests.

Owing to its having been regulated for so long,
there are numerous sources of detailed statistical
data in the steel industry.

(9) OJ L 116, 6. 5. 1994, p. 1.
(10) Commission Decision 94/6/ECSC of 21 December 1993 au-
thorizing common financial arrangements in respect of indi-
vidual programmes involving the closure of production capa-
city in the Community steel industry for heavy sections, hot-
rolled wide coils and strip, and reversing-mill plate (OJ L 6,
8. 1. 1994, p. 30).

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2. The various markets for steel products

(26)

Steel is made either from iron ore (‘integrated steel-
works’ (11)) or from scrap (‘electric steelworks’ (12)).
Integrated steelworks account
for approximately
70 % of all steel production in the Community.
The steel obtained from melting ore or scrap
(semi-finished products in the form of ingots, slabs,
blooms and billets) is not usable as such and has to
be rolled to give it its final shape and properties.

(27)

In terms of their shape, there are two major cat-
egories of product:

— flat products obtained in the form of sheets
(plates) or of coils (band steel). Products which
are simply hot-rolled may subsequently be
cold-rolled and coated (tinplate, galvanized
sheets). Most flat products (apart from those of
stainless steel) are made in integrated steel-
works. Flat products are used to make pipes and
tubes, ships, boilers, buildings, cars, packaging,
etc.,

— long products: concrete reinforcing bars, rods,
beams, joists, wire rod. Long products are used
in sectors such as construction, bolt, nut and
screw manufacture, wire drawing, etc.

(28) According to their composition, a distinction is
made between non-alloy steels, stainless and heat-
resisting steels and other alloy steels.

(29)

The products listed in the questionnaires forming
the subject matter of the notification belong to
different product markets depending on their
characteristics, the use to which they are put, and
the plant and know-how needed to produce them.
There are 23 product markets in all: semi-finished
products, 12 flat product markets and 10 long
product markets.

(a) Semi-finished products

(30) After solidification, crude steel takes the form of
large blocks (ingots, slabs, blooms, billets) which
must be rolled, that is to say passed between rollers
which reduce the thickness of the blocks and give
them their final shape. Most producers of finished
products produce steel for their own purposes, but
they also sell part of the semi-finished products

(11) Very large plants (coking, sintering, blast furnaces, conver-
ters); very little operating flexibility; average minimum capa-
city of some 2 million tonnes a year; very high initial invest-
ment and maintenance costs.

(12) Limited investment (electric furnace); considerable operating

flexibility.

they produce. Of the 152 million tonnes of crude
steel produced in 1995, approximately 24 million
were sold in the form of semi-finished products.

There are more than 125 undertakings or groups
producing crude steel
in Europe. The market is
therefore dispersed.

(b) Flat products

(31)

There are 12 markets for flat products:

Hot-rolled wide strip of non-alloy steel: These
products may be sold without further processing (as
is
the case with 40 % of production) or be
processed into cold-rolled sheet, which in turn may
be sold further processing or coated.

the level of

There are 12 undertakings or groups
in the
Community which are independent of one another
at
the production of wide strip.
However, when it comes to processing such hot-
rolled wide strip into cold-rolled sheet or coated
sheet
(which accounts for 60 % of production),
there are in the Community 10 joint ventures,
including
(which
means cooperatives performing no marketing func-
tion): only seven of the 12 groups referred to above
are totally independent of one another.

six production cooperatives

Hot-rolled wide strip of stainless steel: There are
only six producers in the Community, of which the
three largest account for 70 % of production.

Hot-rolled wide strip of alloy (excluding stainless)
steel: There are 10 or so producers in the Com-
munity. Deliveries by German undertakings
in
Europe account for more than half of all deliveries
by European undertakings.

Cold-rolled sheet of non-alloy steel: Cold rolling
helps to reduce further the thickness of products
and to endow them with special properties. Hot-
rolled wide sheet may be cold reduced. Two thirds
of cold-reduced sheet is then coated. The price of
cold-reduced sheet is 25 % higher than that of
hot-rolled wide strip. Only seven of the 13 existing
producers are totally independent of one another.

Cold-rolled sheet of stainless steel: There are only
six producers in the Community, of which the
three largest account for 70 % of production.

Cold-rolled sheet of alloy (excluding stainless)
steel: There are 10 or so producers in the Com-
munity. Deliveries by German undertakings
in
Europe account for 37 % of all deliveries by Euro-
pean undertakings.

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Coated sheet (with the exception of steel for pack-
aging or tinplate): More than 90 % of coated,
non-tinned sheet is galvanized sheet. Nearly half of
all cold-rolled sheet is coated with a metal coating
other than tin (by hot dipping or by electrolysis).
This operation increases
the sheet’s value by
approximately 40 %.

There are a dozen producers in the Community.
There are in the Community 10 joint ventures,
including six production cooperatives (cooperatives
without any marketing function): only five of those
12 producers
are totally independent of one
another.

Steel for packaging (or tinplate): Cold-rolled sheet
is sold tinned, that is, coated with a tin coating to
protect it from oxidation. The value added by the
tinning is of the order of 60 %.

There are eight producers in the Community, of
which the two largest
for 45 % of
Community production.

account

Reversing-mill plate and universal plate of non-
alloy steel: These consist of thick, uncoiled sheet.
There are 20 or so undertakings or groups in the
Community, of which the three largest account for
44 % of production.

Reversing-mill plate and universal plate of stain-
less
steel: There are only five undertakings or
groups in the Community, of which the two largest
account for more than 60 % of deliveries in the
Community.

Reversing-mill plate of alloy (other than stainless)
steel: There are fewer than 15 undertakings or
groups
in the
in the Community. Deliveries
Community by German undertakings account for
more than half of all deliveries by European under-
takings in the Community.

Electrical sheet: There are eight undertakings or
groups in the Community, of which the two largest
account for more than 60 % of production.

The markets for flat products are therefore all
concentrated.

(c) Long products

(32)

There are 10 markets for long products.

Beams and sections for mine shafts: 20 or so
in the
undertakings or groups produce beams
Community, of which the four largest account for
more than 65 % of production.

Wire rod of non-alloy steel: There are forty or so
in the Community, of
undertakings or groups
which the four largest account for more than 40 %
of production.

Wire rod of stainless steel: There are eight produ-
cers in the Community.

Wire rod of alloy (other than stainless)
steel:
There are 30 or so undertakings or groups in the
in the Community by
Community. Deliveries

German undertakings account for 25 % of all de-
liveries by European undertakings in the Com-
munity.

Concrete reinforcing bars: There are more than 50
undertakings or groups in the Community, or
which the four largest account for more than 40 %
of production.

Merchant bars of non-alloy steel: There are more
than 80 undertakings or groups in the Community.
The five largest account for 40 % of production.

Merchant bars of stainless steel: There are 15 or so
undertakings or groups in the Community.

Merchant bars of alloy (other than stainless) steel:
In the absence of more detailed information, it may
be assumed that a large number of merchant bar
producers produce both non-alloy steels and alloy
steels.

Permanent way material: There are 10 or so
in the Community, of
undertakings or groups
which the three largest account for more than half
of production.

Sheet piling: There are only four undertakings or
groups in the Community.

The structures of
the various markets for long
products are therefore diversified. Some markets are
highly concentrated (sheet piling, beams, per-
manent way material), while others are more
dispersed (concrete reinforcing bars, merchant bars,
wire rod).

E. THE GEOGRAPHIC MARKET

for

(33) Numerous decisions pursuant to Article 66 of the
ECSC Treaty have established that
the relevant
the
the various
market
is
Community market owing inter alia to the lack of
barriers to intra-Community trade and the volume
of intra-Community trade, which represents 30 %
of all deliveries by Community producers in the
Community.

steel products

(34) Nevertheless,

this finding must be qualified to
some extent. The figure of approximately 30 %
stems from the fact that, firstly, a large number of
countries do not produce the full range of products
and, secondly, there are countries whose ‘domestic’
market is very small compared with the output of
the national producer. Moreover, where there is a
its deliveries on its domestic
national producer,
market account for more than half of all deliveries
by Community producers on that market (13) and
the market shares of the other producers on each
market are fairly stable over time.

(13) This is especially the case with flat products, special steels
and certain long products (sheet piling, permanent way mate-
rial and sections for mine shafts).

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F. POSITION OF GERMAN UNDERTAKINGS COMPARED WITH THAT OF OTHER

COMMUNITY UNDERTAKINGS

(35) Deliveries by German undertakings:

Share of German undertakings in deliveries by Community undertakings in the Community in 1995

(%)

Non-alloy
steels

Stainless steel

Other alloy
steels

Hot-rolled wide strip

Cold-rolled sheet

Coated sheet

Steel for packaging

Reversing-mill plate

Electrical sheet

Beams

Wire rod

Merchant steels

Concrete reinforcing bars

Sheet piling

Permanent way material

Total

25

26

28

19

25

36

26

31

10

11

40

25

24

18

24

—

—

24

—

—

11

17

—

—

—

21

51

37

21

—

51

38

52

25

25

—

—

—

38

Share of German undertakings in deliveries by Community undertakings in Germany in 1995

(%)

Non-alloy
steels

Stainless steel

Other alloy
steels

Hot-rolled wide strip

Cold-rolled sheet

Coated sheet

Steel for packaging

Reversing-mill plate

Electrical sheet

Beams

Wire rod

Merchant steel

Concrete reinforcing bars

Sheet piling

Permanent way material

Total

76

67

68

71

66

93

57

77

38

60

73

76

67

44

55

—

—

46

—

—

46

52

—

—

—

52

84

57

38

—

89

84

72

67

66

—

—

—

76

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G. LINKS WITH UNDERTAKINGS LOCATED IN

OTHER MEMBER STATES

(36) Account must also be taken of the fact that some
German undertakings form part of larger European
steel groups:

— the British undertaking British Steel controls

Manstaedtwerke,

— the French undertaking Usinor holds 48,75 %

of the share capital of Dillinger,

— the Belgian undertaking Cockerill-Sambre

controls Eko Stahl,

(39) As the Commission decided in the ‘UK Tractors’
case (14), an agreement
to exchange information
which is both sensitive, recent and individualized
in a concentrated market where there are important
barriers to entry, is liable to restrict competition
between the undertakings parties thereto in so far
as it increases market transparency to such a degree
that any independent competitive action on the
part of an undertaking can immediately be noticed
by its competitors, which are able to take suitable
retaliatory measures. By eliminating any hidden
competition in the market,
information
exchange reduces considerably the advantage to be
gained by an undertaking from competitive action
and tends to dissuade it from trying to increase its
market share.

the

— the Luxembourg undertaking Arbed controls
Stahlwerke Bremen, Stahlwerke Th(cid:129)ringen and
Bregal,

(40)

— the Italian undertaking Riva controls Henn-

ingsdorf and Brandenburger,

— the Italian undertaking Feralpi controls ESF

Riesa,

— the Finnish undertaking Rautaruukki controls

Bregal with Arbed.

(37)

Similarly, German undertakings have interests in
other Member States: Krupp and Thyssen in Italy
(AST) and Thyssen in Spain (Galmed).

their

This view was upheld on 27 October 1994 by the
Court of First Instance, which held in the UK
Tractors case (15) that general use, as between main
suppliers, of exchanges of precise information at
short intervals, identifying registered vehicles and
the place of
registration is, on a highly
concentrated oligopolistic market on which compe-
tition is already greatly reduced and exchange of
likely to impair consid-
information facilitated,
erably the
competition which exists between
traders. In such circumstances, the sharing, on a
regular and frequent basis, of
information con-
cerning the operation of the market has the effect
of periodically revealing to all competitors the
market positions and strategies of the various indi-
vidual competitors.

II. ASSESSMENT

A. ARTICLE 65 (1)

1. General

(38) Article 65 (1) of

the ECSC Treaty prohibits all
agreements between undertakings, decisions by
associations of undertakings and concerted prac-
tices
indirectly to prevent,
restrict or distort normal competition within the
common market, particularly those tending:

tending directly or

(a) to fix or determine prices;

(b) to restrict or control production, technical de-

velopment or investment;

(c) to share the markets, products, customers or

sources of supply.

(41) Although they concern Article 85 of the EC Treaty,
these findings are transposable to Article 65 of the
ECSC Treaty, both Treaties being motivated, as the
Court of Justice held in its judgment of 18 May
1962 (16), by a ‘common intention’. Moreover, the
Commission normally interprets
similar
fashion the prohibition in Article 65 (1) of the
ECSC Treaty and that in Article 85 (1) of the EC
Treaty, notably as regards exchanges of information
between undertakings. In the notice concerning
agreements, decisions and concerted practices in
the field of cooperation between enterprises (17), the
Commission viewed such cooperation in the same
way under both Treaties.

in a

(14) Commission Decision 92/157/EEC of 17 February 1992 re-
lating to a proceeding pursuant to Article 85 of the EEC
Treaty — UK Agricultural Tractor Registration Exchange
(OJ L 68, 13. 3. 1992, p. 19).

(15) Judgments in Cases T-34/92, Fiatagri UK Ltd and New Hol-
land Ford Ltd v. Commission [1994] ECR II, p. 905, at para-
graph 91 and T-35/92, John Deere Ltd v. Commission [1994]
ECR II p. 957, at paragraph 51.

(16) Case 13/60 ‘Geitling’, Ruhrk(cid:148)hlen-Verkaufsgesellschaft mbH
and others v. High Authority of the European Coal and Steel
Community [1962] ECR p. 165.

(17) OJ C 75, 29. 7. 1968, p. 3, corrigendum OJ C 84, 28. 8. 1968,

p. 14.

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3. 1. 98

2. Restrictive effects of the notified agree-

ment

(42)

The undertakings decided to exchange question-
naires ECSC 2-71, 2-72, 2-73 and 2-74 (see foot-
note 5). The latter two are inextricably linked to the
first, which must therefore be analysed first.

(a) Questionnaires 2-71, 2-73 and 2-74

(43) Questionnaire 2-71 is concerned with data on de-
liveries by type of product and by Member State of
destination. They are individual, monthly and
recent data. They are sensitive and confidential
inasmuch as they make it possible to establish the
various undertakings’ market position. Combined
with questionnaires 2-73 and 2-74, this question-
naire reveals the strategy of each undertaking in
each Member State for the various products (45
products, eight qualities), and more particularly on
the German market (28 different consumer sectors).

(44)

The assessment of the notified exchange is directly
linked to the degree of concentration of the market
for the products in question and to its character-
istics. The case-law (see above) has clearly es-
tablished that the restriction of competition stems
from the fact that, on an oligopolistic market, the
exchange increases transparency in such a way as to
deter competition between participants.

(45) All

the markets for flat products and those for
beams, sheet piling, permanent way material and
stainless
steel wire rod are concentrated. The
concentration must be assessed in the light of
various criteria, including the number of producers
present in the market, the existence of structural
links between them, the combined market shares
of the main undertakings, and the barriers to entry.
In the present case, for flat products, beams, sheet
piling, permanent way material and wire rod of
stainless steel, the number of producers in Europe
is no greater than 20 (see above). For all these
products, the sum of the production of the four
leading producers comes to more than half of total
production. The barriers to entry are very high
owing to the capital intensity of the industry. There
are numerous structural
links between the steel
groups. Thus, for example, only seven of the 12
producers of hot-rolled wide strip and sheet and
five of the 12 producers of coated sheet are totally
independent of one another
(see above). These
markets may therefore be characterized as highly
concentrated markets.

(46) On these concentrated markets, the notified deci-
sion to carry out the exchange of information in
question is liable to restrict competition. The fact
of informing one’s competitors each month of de-
liveries of each product in the different Member
States and of one’s market shares in one’s domestic
market
is likely to deter them from trying to
increase market shares. Competitors will be able to
identify those undertakings which try to increase
their market share and to take retaliatory measures
against them. The notified exchange is therefore
liable to induce undertakings to abandon a funda-
mental competitive activity consisting in increasing
their market shares. The period during which an
undertaking can engage in competitive activity is
greatly reduced by the frequency of the exchange
and the recentness of the data exchanged. By re-
moving any remaining hidden competition in
markets characterized by a small degree of openess,
by fairly stable trade flows between Member States,
by considerable homogeneity of products and
chronic overcapacity, the notified agreement makes
highly probable the development of behaviour
having the effect of freezing market shares.

(47)

(48)

The undertakings party to the agreement account
for approximately one quarter of all Community
deliveries in the Community. The notified infor-
mation exchange is liable to restrict competition
appreciably. This effect is even more noticeable on
the German market, where
the undertakings
account for between one half and three-quarters of
Community deliveries.

there

For some of these products (beams, grain-oriented
electrical sheet, steel for packaging, most stainless
steel products),
is only one notifying
producer. The undertakings to which it would
communicate the date relating to its deliveries are
not active on the same product market and there is
therefore no restriction of competition directly
caused by that exchange. However, some of the
undertakings which receive data but
are not
competitors of the data-provider are controlled by
undertakings which themselves control competitors
of the data provider. There is no guarantee that
such particularly sensitive data would not end up in
the hands of such competitors.

In view of the above, the Commission considers
that the exchange of questionnaires 2-71, 2-73 and
2-74 restricts competition in respect of the fol-
lowing products:

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Product

Lines of question-
naire 2-71

Lines of question-
naire 2-73

Lines of question-
naire 2-74

Hot-rolled wide strip

311 to 336

311 to 336

8320, 8330

Cold-rolled sheet

411, 416

411, 416

8410

Coated sheet

451 to 457

451 to 457

Steel for packaging

430, 440

430, 440

Reversing-mill plate

341 to 350

341 to 350

8340

Electrical sheet

421 to 427

420

Beams

540 to 559

540, 550

1550, 8550

Wire rod of stainless steel

1510, 2510, 3510,
4510, 5510, 6510,
7510 and 8510

Permanent way material

Sheet piling

570

560

570

560

(49) A large number of undertakings are active on the
other product markets. The restrictive effect of an
exchange of sensitive information is less marked in
such cases. There is therefore no objection to the
notified exchange in respect of
the following
products: semi-finished products, merchant bars,
concrete reinforcing bars and wire rod (with the
exception of wire rod of stainless steel).

haviour of competitors may largely be anticipated
on the basis of their recent transactions. The obser-
vation of competitors’ behaviour and past per-
formance is at the root of all the agreement’s res-
trictive effects as described above. The more ac-
curate and recent
the information on quantities
sold and market shares, the greater its impact on
undertakings’ future market behaviour.

(b) Questionnaire 2-72

(50)

The Commission has no objections
exchange of this questionnaire.

to the

3. Arguments put forward by the parties

(51)

their notification,

In support of
the parties
submitted a legal study and two economic studies.
The main arguments put
forward are outlined
below.

Age of the data

(52)

In their notification the parties state that:
‘The
exchange is confined to the communication of data
on quantities; no data on prices or turnover will be
exchanged. The exchanged data concern only past
conduct on the market and not future conduct’.

In a market where demand is stable, as is the case
with the relevant product markets, the future be-

From a certain point in time, however, data con-
cerning past
transactions becomes truly historic
and no longer has any real impact on future be-
haviour (18).
In the present case, although the
exchanged data relate to a past period, they must be
deemed to be recent if they are less than a year old
(here, they are one month old).

Proof of the restrictive effect

(53)

state that

The notifying parties
‘the notified
exchange of information is not caught by Article
65 (1) of the ECSC Treaty because it has neither as
its object nor as its effect a restriction of competi-
tion’.

(18) Thus, for example, in the UK Tractors case the Commission
considered that an annual exchange of one-year-old informa-
tion on sales by the various competitors did not significantly
distort competition (abovementioned Decision, recital 50).

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3. 1. 98

of

for

being

potentially

anti-competitive

The Commission considers that account must be
taken not only of the immediate, visible effects of
an agreement but also of its potential effects and of
the fact that an agreement can create a structure
anti-competitive
used
capable
purposes. Article 65 (1) must be interpreted as
covering
effects
because the objective of that provision is the main-
tenance of an effective competitive structure. This
in a highly
objective is particularly material
concentrated market where
information
an
exchange creates a structure of transparency which
prevents any hidden competition. The fact that the
Commission has been unable to establish the exis-
tence of an actual effect on the market therefore
has no bearing on the outcome of the proceeding
inasmuch as Article 65 (1) of the ECSC Treaty
prohibits both actual anti-competitive effects and
potential effects, provided that these are sufficiently
marked.

The UK Tractors judgment

(54)

The parties consider that
the
Court of First Instance in the UK Tractors case was
to some extent unfavourable to the Commission.

the judgment of

According to the legal study submitted in support
of the notification, the Court of First Instance only
partly concurred with the Commission in the UK
Tractors case,
in that it required the exchanges,
before they could constitute an infringement of
Article 85 (1) of the EC Treaty, to take place on a
concentrated market
in which competition is
already reduced.

The Commission considers that this interpretation
is wrong. In the above case, the Court of First
Instance held (19) that general use, as between main
suppliers, of exchanges of precise information at
short intervals, identifying registered vehicles and
registration is, on a highly
the place of
their
concentrated oligopolistic market
the
market in question on which competition is, as a
result, already greatly reduced and exchange of
information facilitated,
likely to impair consid-
erably the
competition which exists between
traders.

such as

Impairment of competition was
therefore con-
sidered in the case in point, not as an additional
condition for the application of Article 85 (1), but
as a logical consequence of the oligopolistic nature
of the relevant market.

Competition in the relevant market

(55)

Following the logic of the argument set out above,
submitted to the Commission an
the parties

(56)

(57)

(58)

(59)

(60)

economic study which seeks to show that competi-
tion in the steel market is intense.

The study does not distinguish between the various
product markets despite the fact that they differ
considerably from one another (degree of concen-
tration of the market, rate of utilization of produc-
tion capacity, price trends, barriers to entry due
inter alia to differences in fixed costs, transport
costs, etc.). In view of
these
various factors when it comes to assessing the
restrictive effect of
the
furnished study is not really relevant to this case.

the notified agreement,

the importance of

Existence of information on quantities in other
economic sectors

The parties submitted in support of their notifica-
tion a study seeking to show that the availability of
recent, individualized information in the consumer
goods sector promotes competition and that the
notified exchange would accordingly have a benefi-
cial effect on competition.

This argument is invalid, for two main reasons.
First of all, they are not agreements between com-
petitors capable of being caught by Article 65 of
the ECSC Treaty or Article 85 of the EC Treaty.
Specialist organizations carry out studies on the
basis of surveys at the point of sale. Secondly, the
information is sold by those organizations and not
exchanged between competitors. However accurate
those surveys are, this is an instance of a provision
of services by a third party and not of an agreement
capable of being assessed in the light of Article 65
of the ECSC Treaty.

4. Applicability of Article 65 (1)

In a communication dated 31 December 1994 (20)
concerning the withdrawal of the quarterly guide-
lines relating to production and deliveries of steel
products, the Commission reminded undertakings
and their associations that pursuant to Article 65 (1)
they are prohibited from replacing the flanking
measures introduced so far by the Commission by
a
information
exchange system.

equivalent

similar

private

or

The exchange of questionnaires 2-71 and 2-73 is
contrary to Article 65 (1)
in that it institutes a
system for the exchange of information on recent
individual data on deliveries and market shares in
the fields of flat products, beams, sheet piling and
permanent way material.

(19) See footnote 15.

(20) OJ C 379, 31. 12. 1994, p. 36.

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(61)

The echange of questionnaire 2-74 is contrary to
Article 65 (1) for the products mentioned above
and for wire rod.

(62)

(63)

(64)

B. INAPPLICABILITY OF ARTICLE 65 (2)

Since it is neither a specialization agreement nor a
joint-buying or joint-selling agreement, the notified
agreement cannot be authorized by the Commis-
sion on the basis of Article 65 (2).

C. APPLICABILITY OF ARTICLE 65 (5)

Pursuant to Article 65 (5), the Commission may
impose fines or periodic penalty payments on
undertakings which have entered into an agree-
ment which is automatically void or have enforced
or attempted to enforce an agreement or decision
which is automatically void, or have engaged in
practices prohibited by paragraph 1 of that Article.

In this case, the parties have stated that they have
not implemented the notified agreement following
the warning letter which the Commission sent to
them on 8 July 1996. There are therefore no
grounds for fining them,

HAS ADOPTED THIS DECISION:

Article 1

The information exchange agreement notified on 28 May
1996 infringes Article 65 of the ECSC Treaty in so far as
it involves an exchange of questionnaires 2-71, 2-73 and
2-74 in respect of
flat products, beams, sheet piling,
permanent way material and wire rod of stainless steel.

Article 2

The information exchange agreement notified on 28 May
the conditions for authorization
1996 does not
pursuant Article 65 (2).

fulfil

Article 3

The Wirtschaftsvereinigung Stahl and the 16 notifying
undertakings shall refrain from implementing the notified
exchange.

Article 4

This Decision is addressed to:

Wirtschaftsvereinigung Stahl
Breitestraße 69
D-40213 D(cid:129)sseldorf

AG der Dillinger H(cid:129)ttenwerke
Postfach 1580
D-66748 Dillingen

EKO Stahl GmbH
Werkstraße 1
D-15890 Eisenh(cid:129)ttenstadt

Krupp Hoesch Stahl AG
Eberhardstraße 12
D-44145 Dortmund

Krupp Thyssen Nirosta GmbH
Alleestraße 165
D-44793 Bochum

Preussag Stahl AG
Eisenh(cid:129)ttenstraße 99
D-38239 Salzgitter

Stahlwerke Bremen GmbH
Auf den Delben 35
D-28237 Bremen

Thyssen Stahl AG
Kaiser-Wilhelm-Straße 100
D-47166 Duisburg.

Done at Brussels, 26 November 1997.

For the Commission

Karel VAN MIERT

Member of the Commission