98/247/ECSC: Commission Decision of 21 January 1998 relating to a proceeding pursuant to Article 65 of the ECSC Treaty (Case IV/35.814 - Alloy surcharge) (Only the Dutch, French, German, Italian, Spanish and Swedish texts are authentic) (Text with EEA relevance)
Date: 1998-01-21
Institutions: European Commission
Subjects: ECSC Treaty, fine, infringement of EU law, iron and steel industry, restriction on competition, sanction (EU)

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 21 January 1998

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

(Case IV/35.814 — Alloy surcharge)

(Only the Dutch, French, German, Italian, Spanish and Swedish texts are authentic)

(Text with EEA relevance)

(98/247/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 information obtained by the
Commission and the checks made pursuant to Article 47
of the Treaty,

Having regard to the written comments
submitted
pursuant to Article 36 of the Treaty and noting that the
parties
to present oral
comments,

formally waived their

right

Whereas:

(2)

I. THE FACTS

A. Procedure

(1)

from several consumers,

Following reports in the specialised press and unof-
the
ficial complaints
Commission initiated an investigation into the
application by European stainless steel producers of
a general price increase known as
an ‘alloy
surcharge’.

On 16 March 1995, under Article 47 of the ECSC
Treaty, the Commission asked a number of produ-
the
cers for data concerning the price changes,

formula or method used to calculate the amounts
applied, the circumstances and the date on which
the formula was first used, as well as any sub-
sequent amendments or applications.

On the basis of the information obtained and, in
particular, copies of circulars sent by the producers
to their customers which announced a modification
of the bases used to calculate the alloy surcharge,
the Commission sent a statement of objections on
19 December 1995 to 19 undertakings.

Having examined the file, the undertakings replied
to the objections at the beginning of 1996.

The replies prompted the Commission to under-
take further investigations. Checks under Article 47
of the ECSC Treaty were carried out at Acerinox,
Thyssen,
ALZ,
Outokumpu and Usinor Sacilor. Requests for in-
formation were sent to Acerinox, Acciai Speciali
Terni, ALZ, B(cid:148)hler, Olarra, Outokumpu and
Usinor Sacilor.

Sheffield,

Krupp,

Avesta

The undertakings
to which this Decision is
addressed submitted their comments on the new
statement of objections which the Commission
sent to them on 24 April 1977 and which cancels
and replaces that of 19 December 1995. In their
replies,
to put
they formally waived their right
forward their views at a hearing.

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B. The products

C. The geographic market

(3)

(4)

(5)

process. Under

Stainless steel is a type of special steel whose main
property is resistance to corrosion. This resistance
is achieved by the use of different alloying mate-
rials (chrome, nickel, molybdenum) in the produc-
tion
EN
least 10,5 %
10020:5.2222.1, steel containing at
chrome and no more than 1,2 % carbon may be
classed as stainless steel. There are three main types
of stainless steel, depending on the composition of
alloying material:

CEN standard

— austenitic steel, whose basic grade contains

18 % chrome and 8 % nickel,

— ferritic steel, which may contain up to 30 %

chrome,

— martensitic steel, which contains up to 14 %

chrome.

Each of these types has different uses.

Stainless steel is used in the form of flat products
(plates or coils; hot-rolled or cold-rolled) and long
products (bars, wire rod, sections; hot-rolled or fin-
ished). Most of these products are ECSC products
within the meaning of Article 81 of the Treaty.

Flat products account for 82 % of sales of stainless
flat products. Flat products continuously
steel
manufactured in the form of coil (hot-rolled wide
or narrow strip) account for 93 % of flat products,
the rest consisting in thick individually rolled sheet
(reversing-mill plate). About 70 % of hot-rolled
wide strip is then cold rolled to reduce thickness
and give it special properties.

The market for stainless steel flat products is highly
concentrated. There are only six undertakings or
groups in the Community which produce hot wide
strip and cold-rolled plate. Five of the undertakings
also produce reversing-mill plate.

In
the Krupp/Thyssen/Riva/Falck/Tadfin/AST
case (1), the Commission noted that, according to
the forecasts of stainless steel producers, there was a
large amount of excess capacity which would
persist over the next few years.

(7)

(8)

(9)

for which the market

Unlike carbon steel,
is
regarded as mature, the market for stainless steel
products is still expanding. Since 1950 production
of all quantities of steel has grown by 2,4 % annu-
ally, whereas production of stainless steel has grown
by 5,8 % annually. During the same period the
main producing and consuming regions have
changed; North America gave way to Western
Europe (EC plus EFTA) and then to Japan from
the mid-1960s onwards. Today, the growth area is
located in the newly industrialised countries, where
the annual rate of growth is of the order of 16 %. A
number of European producers have decided to
follow this trend by investing in the areas that are
net importers (America and south-east Asia).

Exports by European firms outside Western Europe
their total sales. By
account
contrast,
into Western
Europe account for less than 5 % of consumption
there.

for some 25 % of
imports of stainless steel

The relevant geographic market is Western Europe.
There are no customs duties or legal or technical
barriers to imports between the EFTA countries
and the Community and, although producers have
a large share of their respective domestic markets,
trade between Member States is considerable. On
the other hand, imports from third countries are
relatively low. In the abovementioned AST de-
cision,
imports of cold-rolled products were es-
timated at 3 % of total consumption (2).

D. The parties

The companies Acerinox SA, ALZ NV, Acciai
Speciali Terni SpA, Avesta Sheffield AB, Krupp
Thyssen Nirosta GmbH and Usinor SA account for
almost 90 % of European output of stainless steel
flat products in the form of coils (hot wide strip
and cold sheet) and a very large proportion of the
output of stainless steel long products. All in all,
they account for over 80 % of European produc-
tion of finished stainless steel products.

1. Acerinox SA

(6)

This Decision is addressed to the undertakings
manufacturing flat products, and is restricted to
ECSC products, namely hot-rolled flat products
and cold-rolled flat products at least 500 mm wide.

(10) Acerinox SA (‘Acerinox’) is a listed company in-
corporated under Spanish law. Set up in 1970, the
firm has modern plant and is known for its low
costs and profitability.
the Spanish
producer of stainless long products Rold ´an SA and
a US producer of stainless flat products.

It controls

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(16)

(17)

(18)

2. ALZ NV

(11) ALZ is a company incorporated under Belgian law
that belongs to the Arbed group. Like Acerinox,
ALZ was set up in the 1970s and manufactures
stainless steel flat products.

3. AST SpA

(12) Acciai Speciali Terni SpA (‘AST’) was set up on 1
January 1994, when ILVA’s steel-making activities
were split up into three undertakings with a view to
subsequent sale. AST’s main activity is the produc-
tion of stainless steel flat products, electrical sheet
and welded tubes, the last-named being produced
by a subsidiary. On 24 December 1994 the
Commission authorised the joint acquisition of
AST by Fried. Krupp AG Hoesch-Krupp, Thyssen
Stahl AG, AFL Falck, Tadfin SpA and FI.RE.
Finanziaria SpA (Riva group).

In December 1995 Krupp increased its share in
AST from 50 % to 75 % by purchasing the shares
held by Falck and Riva.

4. Avesta Sheffield AB

(13) Avesta Sheffield AB (‘Avesta’)

is controlled by
British Steel. Avesta came into being as a result of a
merger in 1992 between the British and Swedish
stainless steel divisions. British Steel also controls
the stainless long products manufacturers Fagersta
Stainless AB (in Sweden) and British Steel Engin-
eering Steels Holdings Limited (formerly United
Engineering Steel) and a US manufacturer of stain-
less steel flat products.

5. Krupp Thyssen Nirosta GmbH

(14) Krupp Thyssen Nirosta GmbH was created on 1
January 1995 folllowing the merger of the stainless
steel divisions of Thyssen Stahl AG and Fried.
Krupp AG Hoesch Krupp which make products
resistant to acids and high temperatures (3). It has
agreed to assume full liability in the present case
for events preceding its creation in regard to both
Thyssen Stahl AG and Krupp Hoesch AG. This
Decision is not, therefore, addressed to either of
those undertakings.

6. Usinor SA

(15) Ugine SA (‘Ugine’) was, at the time of the events in
question, a subsidiary of the Usinor Sacilor group
responsible for the production and sale of stainless
steel. On 11 December 1995 Ugine SA became a

division of Usinor Sacilor and thus lost its legal
personality. Usinor Sacilor altered its trading name
in June 1997 and is now known as Usinor SA.
Usinor SA is the largest steel producer in Europe
and one of the leading producers in the world. It
also controls J & L Special Steels, a leading
American producer of stainless cold-rolled sheet
and holds a stake in the leading Thai producer of
stainless cold-rolled sheet.

E. Background: the alloy surcharge and its
calculation

The alloy surcharge is a price supplement which is
calculated on the basis of the prices of alloys and is
added to the basic price for stainless steel.

The cost of the alloys used by stainless steel produ-
cers (nickel, chromium and molybdenum) forms a
very large proportion of the total production costs.
The prices for these alloys are extremely volatile,
which explains the desire of producers to offset the
price fluctuations without recourse to frequent al-
terations in the basic price. The application of the
alloy surcharge has a purely financial basis.

calculate

Producers
alloy
surcharge to be applied in a given month (M) in
the different Communities currencies as follows:

amount of

the

the

They calculate the average price of nickel, ferro-
chromium and molybdenum in the two months
preceding the month before the month of calcula-
tion — in other words, M–2 and M–3.

They compare the values thus obtained with the
reference values since February 1994, namely:

—ECU 3 750/tonne for nickel,

—ECU 5 532/tonne for molybdenum,

—ECU 777/tonne for ferro-chromium.

If the difference between the average prices and the
reference values is positive, a price supplement is
added to the basic price for the month M. If it is
negative, no increase is applied: there is no negative
alloy surcharge. Such a situation occurred between
1991 and 1993, when alloy prices fell below the
trigger values and producers applied a zero alloy
surcharge.

The amounts in excess of the trigger values are
multiplied by the percentage of each alloy in the
quality of steel concerned (for example, for quality
AISI 304, there would be 9 % nickel and 18 %
chromium and for quality AISI 316, 12 % nickel,
18 % chromium and 2,5 % molybdenum.

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(19) Calculation methods have varied, depending on the
the
period and the producer. In the course of
inspections carried out under Article 47 of
the
ECSC Treaty in 1996 and in certain letters to the
Commission, the producers stated that they had all
been using the method described in the statement
of objections of 19 December 1995 (with the
exception of the trigger values) since 1988 (4). In its
Decision
Commission
objected to an agreement and concerted practices
between European producers of
stainless cold-
rolled flat products which related in particular to
prices. The agreement was in force between at least
May 1986 and October 1988. The decision was not
contested. All the parties in question in the present
proceedings were at
the
‘Sendzimir club’ referred to in Decision 90/417/
ECSC.

the time members of

90/417/ECSC (5),

the

F. The behaviour of

the undertakings

in

December 1993 and January 1994

(20)

The prices for alloys and stainless steel fell sharply
in 1993. When nickel prices started to rise in
September 1993, producers’ profits were consid-
erably reduced. To remedy this, the producers of
stainless
flat products, with the exception of
Outokumpu, agreed to hold a meeting in Madrid.
Following that meeting, a number of contacts took
place between the producers.

1. Meeting held in Madrid on 16 December 1993

(a) Participants

(21)

The meeting (hotel reservations and suchlike) was
organized by Acerinox (6), which denies, however,
having been the instigator. The meeting was
attended by:

— Acerinox:

— ALZ:

— AST:

Mr Riestra

Mr R.

Mr Ronchi
Moio

and Mr

— Avesta Sheffield:

Mr T. and Mr W.

— Krupp Hoesch
Stahl AG:

Mr Pl(cid:148)macher and Mr
Hufen

— Thyssen:

— Ugine:

(b) Purpose

Mr Peek

Mr Laquay
Lepage.

and Mr

(22) According to the statements of the undertakings,
the purpose of the meeting was to allow producers

to exchange views on the possible reintroduction of
an alloy surcharge as the most appropriate means
of increasing prices and compensating for higher
nickel prices.

Acerinox stated:

‘Se celebr(cid:155) una reuni(cid:155)n en Madrid con fecha 15 de
diciembre de 1993, que hab(cid:146)a sido acordada entre
las partes para hablar ( . . .) de la problem ´atica situa-
ci(cid:155)n del mercado de las materias primas del acero
inoxidable y las fuertes oscilaciones de los precios
de las mismas.’ (7).

In its statement, Avesta specifies that:

‘The meeting involved an exchange of views on the
difficulties caused by the various price develop-
ments described above and on the possible reintro-
duction of an alloy surcharge to address these dif-
ficulties.’ (8).

According to Krupp and Thyssen:

‘Dort sind die allgemein schlechte wirtschaftliche
Lage sowie m(cid:148)gliche Auswege er(cid:148)rtert worden.’ (9).

Ugine stated (10):

‘Une r(cid:130)union a eu lieu (cid:133) Madrid (cid:133) l’h(cid:147)tel (. . .) le 16
d(cid:130)cembre 1993 qui a permis de proc(cid:130)der (cid:133) un
(cid:130)change de vues entre les producteurs d’acier
inoxydable.’

In its statement, AST even specifies (11) that it is in
order to find a solution to the crisis that the under-
takings met in Madrid:

‘In questo contesto, e al fine di trovare una via
d’uscita dalla situazione di crisi, ebbe luogo un
incontro tra i principali produttori di acciaio
europei.’

(c) Selecting the calculation method and

reference values

(23) Mr Laquay, a representative of Ugine, explained
with the aid of a flip chart how the alloy surcharge
had been applied in the past (12). According to
Krupp and Thyssen:

als

hat

Laquay

Spezialist

‘Herr
f(cid:129)r
LZ-Berechnungen unter Zuhilfenahme eines Flip-
Charts spontan und exemplarisch am Beispiel der
von seinem Unternehmen in Frankreich gefor-
derten Preise errechnet, welche zus(cid:132)tzlichen Erl(cid:148)se
bei entsprechender Umstellung des Stoppreises im
franz(cid:148)sischen Markt erzielbar w(cid:132)ren’ (13).

(24) All

the participants at

the meeting said it was
necessary to use the method adopted in 1991, and
alter the reference values.

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Acerinox stated:

‘En la misma se plante(cid:155), ante las circunstancias ya
conocidas de la volatilidad del mercado de las
materias primas en el que Acerinox SA no tiene
intervenci(cid:155)n alguna, la necesidad de aplicar el extra
de aleaci(cid:155)n a los clientes con arreglo a una f(cid:155)rmula
tradicional ya conocida y aplicada con los valores
m ´as adecuados para paliar la cada vez m ´as especu-
lativa situaci(cid:155)n de la LME’ (14).

AST stated:

‘Nel corso di quell’incontro furono discusse le
iniziative che ciascuno dei partecipanti intendeva
prendere al riguardo, che aveva elaborato in prece-
denza in totale autonomia (almeno per quanto
riguarda AST). Dall’incontro emerse una naturale
convergenza sull’adozione, come livello minimo
della formula, del prezzo del nichel del settembre
1993’ (15).

Avesta states that:

‘The participants exchanged similar views on the
use of the alloy surcharge calculation mechanism
previously applied. In the course of the exchange,
the ASAB representatives put to the meeting their
views on using the previously adopted calculation
mechanism with new trigger values’ (16).

In their statement, Krupp and Thyssen gave the
following explanation:

‘Unter den gegebenen Umst(cid:132)nden lag daher die
einzige M(cid:148)glichkeit, der Entwicklung zu begegnen,
in dem Versuch, den wegen des fr(cid:129)heren Absin-
kens des Preises der Legierungsmetalle unter den
bisherigen Stoppreis ausgesetzten LZ wieder zu
aktivieren.(. . .) Im Rahmen des Treffens hat dann
Herr Pl(cid:148)macher bekundet, daß Krupp k(cid:129)nftig als
Stoppreis die niedrige Septembernotierung f(cid:129)r Ni
zugrunde legen werde’ (17).

Ugine stated:

‘Au cours de la r(cid:130)union, certains participants dont
Ugine ont fait conna(cid:140)tre leur intention, assortie ou
non de r(cid:130)serves, de reprendre l’application de la
formule d’extra assortie d’un nouveau seuil de
d(cid:130)clenchement (le point bas du cours du nickel en
septembre) (cid:133) dater du 1er f(cid:130)vrier 1994’ (18).

(25)

The customers were already familiar with the
mechanism. The September 1993 alloy prices (the
lowest historical prices for nickel) were chosen as
the new trigger thresholds. In its statement, Avesta
states that calculations were carried out during the
meeting using the September/October alloy prices
and an approximate rate of exchange for
that
period:

calculation of
and an approximate rate of exchange for
period’ (19).

the previously adopted surcharge)
that

(d) Date of application

(26) With regard to the date of application of the new
alloy surcharge, most of the participants were in
favour of applying it as soon as possible: 1 February
1994 was considered to be the most realistic date
for first application. In its statement, Avesta speci-
fies:

‘At the meeting, the participants also discussed an
implementation date. 1 February was considered to
be the earliest feasible date for introduction of the
surcharge’ (20).

Acerinox also states that:

‘La mayor(cid:146)a de los presentes eran partidarios de
aplicar el extra de aleaci(cid:155)n lo m ´as pronto posi-
ble’. (21).

(27) Acerinox stated that it did not intend to apply the
surcharge in Spain, as demand on the Spanish
market was depressed:

‘Acerinox indic(cid:155) su intenci(cid:155)n de no aplicar el extra
en Espa ˜na por considerar que no iba a ser positivo
para el aumento de la demanda y para la industria
espa ˜nola que estaba sumida en una profunda
crisis’ (22).

(e) Fax of 20 December 1993

(28)

conclusions

The fax (23) sent by Ugine on 20 December 1993 to
producers participating in the meeting and to
Outokumpu reflects
the
the
meeting. Drafted in English, the fax details the
calculation of
the alloy surcharge including the
trigger values, the ECU/USD exchange rate (USD
1,179/ECU for nickel, USD 1,182/ECU for chro-
mium and USD 1,171/ECU for molybdenum), the
reference months and standard alloy contents.

of

According to Avesta’s statement:

‘On 20 December 1993, ASAB received a fax from
Mr Laquay of Ugine setting out details relating to
the alloy surcharge calculation including trigger
points, an ECU/USD exchange rate calculation, the
monthly basis (i.e. M–2 and M–3) and standard
reflected the
contents. This document
alloy
exchange of views between producers’ (24).

Ugine admits to sending the document in its state-
ment:

‘Calculations were made at
the meeting on the
basis of new trigger values reflecting alloy prices in
September/October 1993 (i.e. using the basis of

‘(cid:211) la suite de cette r(cid:130)union, Ugine a communiqu(cid:130)
aux participants par t(cid:130)l(cid:130)copies les 20 d(cid:130)cembre
1993 et 11 janvier 1994 les bases et les r(cid:130)sultats des

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calculs fond(cid:130)s sur
la formule qu’elle entendait
adopter sur le march(cid:130) national fran(cid:135)ais ou euro-
p(cid:130)en en cas de non alignement’ (25).

In its reply to the statement of objections of 23
April 1997 Ugine refers to the fax as containing the
conclusions of the Madrid meeting (26).

AST could not rule out having either received or
taken account of it in its decision:

‘La mancanza di conoscenza diretta dei dettagli non
permette per(cid:149) di escludere in maniera categorica
che vi sia stato qualche scambio di informazione.
(. . .) Dato l’apparente tenore di tali messaggi non si
pu(cid:149) per il vero neppure escludere che AST ne sia
stata influenzata nella determinazione dei valori
utilizzati nella formula’ (27).

February with details of the calculation in ECU/
tonne, a conversion table of the main European
currencies and the comment that it would apply it
only to austenitic steel.

In their statements, all the undertakings mention
the fax:

‘On 11 January 1994, Mr Laquay of Ugine sent a
fax to Mr W. setting out Ugine’s internal calcula-
tion of the alloy surcharge to be applied by it from
1 February 1994’ (34).

(33) Up to 13 January 1994, contacts had taken place at
least between Avesta and most of its competitors
concerning the latter’s position on the alloy
surcharge. Annexes 2 and 6 to Avesta’s statement
point to the existence of some of these contacts.

2. Sequels to the Madrid meeting

(29)

In accordance with Article 60(2)(a) of the Treaty
and pursuant to Decision 37/54/ECSC (28), as last
amended by Decision 2515/86/ECSC (29), stainless
steel producers must make public their price lists
and conditions of sale. They fulfil that obligation
by addressing them to the Commission and any
other interested party at least two working days
before applying them. Each time the price lists are
amended, they must be made public and notified
to the Commission. This is the legal background to
the facts set out below which the Commission has
identified as having taken place between the
Madrid meeting and the publication of the alloy
surcharges by the undertakings concerned.

(30) On 20 December 1993 Avesta Sheffield warned its
distribution subsidiaries of the probable introduc-
tion of an alloy surcharge (30).

On 22 December 1993 ALZ warned its sales subsi-
diaries of
the alloy sur-
charge (31).

the reintroduction of

(31) On 6 January 1994 Ugine recalculated the figure
using the same reference values, but with another,
single ECU/USD exchange rate for all three alloys:
ECU 1,17506/USD. This centesimal difference is
minimal and its effect on the amount of the alloy
surcharge is negligible (cf. point 37).

On 10 January 1994 Avesta Sheffield carried out
detailed
alloy
to
surcharges. It used the ECU/USD exchange rate
used at the Madrid meeting (32).

calculations

establish

the

Annex 2 is a fax dated 14 January 1994 from S. to
W. The following extracts are relevant:

‘ALZ through their Swedish representative called
this morning saying that he had been
me
instructed from his mill
to start applying alloy
extras as from the 1 of February and that he should
get the exact alloy surcharge details from us. (. . .)
Outokumpu through S. also called me today and
asked what we intend to do. I said that most likely
we are going to apply the surcharge in the same
way as announced by Ugine for
the French
market.(. . .) He said they want to do the same in
both Sweden and Finland and suggested that we
contact him on Monday’ (35).

Annex 6 is a fax dated 14 January 1994 and signed
by W. It takes note of the positions of some of
Avesta’s competitors, as follows:

have

announced

‘Ugine have announced surcharges effective 1
February 94 of 430 GBP 4,36, 304 GBP 47,55, 316
GBP 74,03. Acerinox
that
surcharges will be applied from 1.4.94 (yes April!!).
Outokumpu are thought to be following this line
but no confirmation yet. Thyssen expect
to
announce something next Monday. Krupp — we
have no current information. Ilva have announced
a base price change effective from February but
applicable to stockists and not end-users. ALZ are
still considering their position’ (36).

(34) On 13 January ALZ informed its competitors by
telex of the amounts of the surcharges it was going
to publish (37). It informed the Commission of its
price list only on 24 January 1994.

(32) On 11 January 1994 Ugine sent all its competitors
a fax (33) containing the alloy surcharges it was
from 1
going to apply on the French market

(35) On the same day, AST sent Outokumpu a fax
repeating the contents of
the fax which it had
received from Ugine on 20 December 1993 and the
calculations carried out by Ugine on 6 January (38).

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(36) On 17 January 1994 Ugine, AST and Krupp
informed the Commission of the alloy surcharge
they would be applying from 1 February.

flat products,

For
in the countries without a
domestic producer, the undertakings aligned their
prices on the price list of a single producer.

On the same day, Avesta decided it would formally
reintroduce the alloy surcharge and informed its
distributors, giving them precise instructions on the
application procedures (39).

On 19 January 1994, Thyssen notified the
Commission of the alloy surcharges it would be
applying from 1 February 1994.

G. Application of the allow surcharge

(37) On the basis of Article 60 of the ECSC Treaty, all
the undertakings (with the exception of Acerinox)
informed the Commission of the surcharges they
intended to apply and the date of application: 1
February 1994. Acerinox, which informed the
Commission of the new surcharges only in May
1994, nevertheless applied the amounts in certain
Member States as early as February. The method
used being identical, any differences in the final
amounts are minor and are due to rounding-up or
the exchange rate used.

(38)

The practical aspects of applying the surcharge are
described in an Avesta memo of 17 January 1994.
The following points are worth noting:

‘We will follow the rules set by the home producer
in any given producer market, including applying
the surcharge they declare.

In each non-producer market a lead will be taken
by one of the mills — W. will advise those markets
concerned.

The surcharge will not be imposed outside of the
17 European markets. We will need to secure
appropriate price increases as soon as possible.’ (40).

(39)

The practical aspects of applying the surcharge may
be illustrated by three facts:

the surcharge applied by the
The amounts of
irre-
producers on a given market are identical,
spective of
that would have been
obtained by converting the amount published in
the tariffs.

the amount

In the United Kingdom, all
the producers en-
deavoured to apply the alloy surcharge retroactively,
following Avesta’s lead.

(40)

In its statement, Avesta specifies:

‘In the national markets
in which ASAB was
neither the domestic producer nor, in markets with
no domestic producer, the leading supplier, typ-
ically, but not uniformly, ASAB would align on the
domestic producer or leading supplier as was tradi-
tional in the stainless steel industry generally. The
German producer had, for example, traditionally
been regarded as the leading supplier in Austria
and ALZ the leading supplier in the Nederlands,
whilst the Nordic producers had been regarded as
leading suppliers in Denmark and Norway and the
British producer in Ireland ’(41).

(41)

The producers finally sent letters to their customers
announcing the amendment of the thresholds. The
Commission has copies of some of the letters. The
to the present
following extracts are relevant
proceedings:

On 28 January 1994 Ugine Savoie UK Ltd informs
its customers that the alloy surcharge is being reap-
plied, as follows:

‘It has therefore been decided at a European level
to reactivate the surcharge system to take into
account the increase in alloy costs since September
1993, and this surcharge will be applied generally
from 1st February 1994’ (42).

On 31 January 1994 Thyssen Fine Steels Ltd writes
to its customers:

‘For this reason, we have no choice but to imple-
ment alloy surcharges on all stainless flat products
in line with all other manufacturers. As in the
for
previous
the
surcharge has been agreed to account
changes
and
costs ’ (43).

surcharge situation, a clear basis
for
in relationship between prices

II. LEGAL ASSESSMENT

A. Article 65(1)

1. Background

(42) Article 65(1) of

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

tending directly or

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2. The agreement

(43) Article 65 of the ECSC Treaty is infringed if the
parties reach a consensus on a plan which limits or
is likely to limit
freedom by
determining the lines of their mutual action or
abstention from action in the market. No contrac-
are
sanctions or enforcement procedures
tual
required. Nor is it necessary for such a consensus
to be made in writing.

their commercial

concluded, knowingly substitutes practical
co-
operation between them for the risks of competi-
tion’.

(46)

In any event, the question whether the conduct of
the undertakings in this case is to be described as
an agreement or as a concerted practice has no
bearing on the conclusion that such conduct is
contrary to Article 65 of the ECSC Treaty.

(44)

(45)

following the meeting, all

In the present case,
the Madrid meeting had a
single aim: to secure an across-the-board increase
in stainless steel prices to offset the rise in the price
of alloys. A discussion took place of the different
methods used in the past to calculate the alloy
surcharge and,
the
undertakings took identical action. They applied to
their sales in Europe, except in Spain and Portugal,
from 1 February 1994, an alloy surcharge based on
the method last used in 1991, taking the September
1993 prices as reference values. A consensus had
therefore been reached. That
consensus was
confirmed in the fax from Ugine of 20 December
1993, with the result that the consensus must be
defined as an agreement. The content of the circu-
lars referred to above (point 41) confirms the def-
inition.

In any event, if the definition of the consensus as
an agreement is disputed, the reintroduction by the
stainless steel producers of the alloy surcharge by
deliberately identical methods as to value and date
the very least and without any doubt a
is at
In creating the concept of
concerted practice.
‘concerted practice’,
the Treaty
the authors of
intended to forestall the possibility of undertakings’
evading the prohibiton on concerted practices by
colluding in an anti-competitive manner falling
short of an agreement by, for example, informing
each other in advance of the attitude each intends
to adopt, so that each could regulate its commercial
conduct
its competitors
in the knowledge that
would behave in the same way.

Thus, in its judgment in the ICI case of 13 July
1972 (44), the Court held that

‘Article 85 [of the EEC Treaty] draws a distinction
between the concept of “concerted practices” and
that of “agreements between undertakings” or of
“decisions by associations of undertakings”;
the
object is to bring within the prohibition of that
Article a form of coordination between under-
takings which, without having reached the stage
where an agreement properly so-called has been

‘states in paragraph 1 the scope of

As the Court stated in its opinion delivered on 13
December 1961 at the request of the High Au-
thority and the Council of Ministers concerning
the interpretation of Article 65 of the ECSC Trea-
ty (45), that Article, which contains the provisions
giving effect to the prohibition in Article 4b of the
the
Treaty,
prohibition by forbidding in general
terms all
agreements’. The prohibitation in Article 4, accor-
ding to the Court,
‘is clearly intended to prevent
undertakings from acquiring by means of restrictive
practices a position which enables them to have or
exploit markets.’ The prohibition is ‘of strict appli-
cation and distinguishes the system established by
the Treaty.’

3. Purpose, effect and duration of the agreement

(a) Purpose and effect of the agreement

(47)

The purpose of the agreement is the use by all
undertakings, as from the same date, of lower and
identical alloy reference values in the surcharge
calculation method used previously,
in order to
raise prices. Since the ‘surcharges’ or supplements
form part of the final price of the products in ques-
tion, the purpose of the agreement is to fix part of
the price. Article 65(1) specifically states that agree-
ments and concerted practices tending directly or
indirectly to fix prices restrict competition.

(48)

The agreement appreciably restricts competition.
The undertakings concerned by this Decision
account
flat
products. The impact on the market of a concerted
increase in prices between them is thus necessarily
considerable.

for almost 90 % of stainless steel

Furthermore, the alloy surcharge is a major com-
ponent of the final price. The price increase re-
sulting from the alloy surcharge depends partly on
the amount of alloy used in the steel and partly on
fluctuations in alloy prices. It may account for as
much as 25 % of the total price.

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(49) As the purpose of

for

values

the agreement

is to restrict
competition, it is not necessary to demonstrate that
the market has actually been affected. It must be
pointed out, however,
the change in the
that
alloy surcharge was
the
reference
followed by a virtual doubling of stainless steel
prices between January 1994 and March 1995.
While such a sharp increase cannot be explained
solely by the change in the trigger values for the
it did greatly
alloy surcharge in February 1994,
through the mechanical price
contribute to it
increase that
the
components of the price for stainless steel has been
fixed at exactly the same level by all the producers
since February 1994.

it caused. In addition, one of

(b) Duration of

the information

(50)

It is clear from the documents on file that, whilst
the principle of an alloy surcharge is not new and
has been generally applied, the use of an identical
calculation method by all the Community produ-
cers for their sales in Western Europe dates back
approximately to 1988. There is reason to believe,
therefore,
the agreement dates back to the
same period and that the concerted modification of
the reference values in 1994 is only a development
thereof.

that

Nevertheless, the factual elements on which this
conclusion is based are not
sufficiently well-
founded. It must therefore be concluded that the
concerted action began at the Madrid meeting in
December 1993 and has been pursued to date by
all the undertakings with the exception of Avesta
Sheffield, which announced in November 1996
that
it had decided to use another calculation
method.

4. Arguments of the parties

(51) None of the addressees of the statement of objec-
tions has contested the facts as described by the
Commission.

(56)

(52) Avesta and Usinor do not dispute the legal assess-
ment contained in the statement of objections and
simply state that the infringement has ended with
the adoption of a new calculation method (Avesta)
or that it was an insolated measure (Usinor).

(53) Krupp, AST and ALZ, on the other hand, whilst
acknowledging the facts, challenge the Commis-
sion’s perception of
the
Madrid meeting was simply an exchange of views
the amended alloy surcharge reference
and that

them. They claim that

values do not
stem from an agreement or a
concerted practice. This interpretation must be
rejected for the reasons given above.

(54)

Lastly, Acerinox states that it informed its compet-
itors at the Madrid meeting that it would not apply
the surcharge on the Spanish market; according to
Acerinox, this proves that it did not take part in
any agreement. The fact that Acerinox took that
position is explained by the particular characteris-
tics of the Spanish market, where stainless steel
consumption is lower than in other Member States.
Acerinox, however, applied the surcharge outside
Spain from February 1994, thus conforming to the
decision taken at
the Madrid meeting which it
organised in full knowledge of the facts.

In addition, all the undertakings argue that there
are ‘extenuating circumstances’.

(a) All

the undertakings concerned argue
that recourse to the calculation method
is a long-established practice

(55)

It is necessary to distinguish between long-standing
use of a calculation method which allows fluctu-
ations in alloy prices to be reflected in product
prices and the adoption of a uniform calculation
method.

The surcharge calculation includes values which
may be compared to recommendations within the
meaning of
the 1968 Commisson notice con-
cerning agreements, decisions and concerted prac-
tices in the field of cooperation between enter-
prises (46). The method clearly constitutes a restric-
tion of competition

It seems that the general application of the method
in force in 1994 dates back to 1988 (with the
exception of the trigger values). In its abovemen-
tioned Decision 90/417/ECSC of 18 July 1990, the
Commission found against an agreement and
concerted practices between parties which related
in particular to prices. The agreement had been in
force at least between May 1986 and October 1988.
The decision was not contested. The Commission
does not, however, have sufficient evidence that the
adoption of an identical calculation method was
the result of concerted action as such. That is why
the original adoption of the method is not the
subject of
the circum-
this Decision. However,
stances in which the surcharge trigger value was
recently amended points to the existence, at least
in the present case, of collusion in the setting of
the value and the date of implementation.

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(57)

(58)

(59)

(b) Some producers ( 4 7)

tomers are in favour of
method

claim that

cus-
the surcharge

The fact that customers accept a practice that is
contrary to the competition rules does not make it
it was precisely owing to
lawful. What is more,
complaints
the
Commission undertook its investigations.

from certain customers

that

Indeed, the documents obtained in the course of
the proceedings are evidence of the difficulties the
producers encountered when they endeavoured to
have the surcharge accepted by their customers.

(e) Certain undertakings ( 5 0)

alleged that
the Commission encouraged them to
adopt a common method

(62) Commission policy concerning calculation models

was determined in the late 1960s.

The 1968 notice on cooperation between under-
takings provides that agreements having as their
the joint preparation of calculation
sole object
models do not
restrict competition. However,
calculation models containing specified rates of
calculation must be regarded as recommendations
that may lead to restraints of competition.

(c) Some undertakings ( 4 8) minimise
the practice objected to

effect of

the

(63)

In its Decision 80/257/ECSC (51), the Commission
specified how calculation models could amount to
recommendations:

The undertakings claim on the one hand that the
alloy surcharge was applied only to a small propor-
tion of transactions and, on the other, that many
customers benefited from fixed prices. They state
that the increase in stainless steel prices in 1994
was not due to the amendment of the surcharge
to the ratio of supply to
trigger threshold but
demand.

to increase prices,

These arguments must be rejected. In view of the
fact that the concerted action was aimed at revising
reference values in order
it
constitutes an infringement of Article 65 irre-
spective of its effect on the market. In addition, the
application of dissimilar conditions to comparable
transactions constitutes an infringement of Article
60 of the ECSC Treaty, and undertakings are not
entitled to rely on a possible infringement in order
to attempt to conceal or deny the existence of an
alloy
established
surcharge can, depending on the qualities and
products concerned, account for up to 25 % of the
final price.

infringement.

Finally,

the

(d) Several undertakings ( 4 9) pleaded the

principle of

legitimate expectation

(60) According to those firms, the Commission could
have deduced from the price lists sent to it under
Article 60 that there was a single method of calcu-
lation. The fact that it did not initiate proceedings
under Article 65 created a legitimate expectation
on the part of the firms that the use of a common
method was lawful.

(61)

The undertakings simply notified the Commission
of the amounts of the alloy surcharges they were
applying, in the different currencies. The calcula-
tion method itself was never sent to the Commis-
sion, nor were the data on its implementation.

indirectly when setting their

‘They encourage the user companies to work from
the figures contained in the model, or at least to
keep close to them, when calculating their costs
and thus
selling
prices. To this extent it is immaterial whether the
cost components are expressed in straight figures or
in the form of percentage surcharges. Either way,
what may once have been offered as a service to
explain to companies the various ways of achieving
cost-related price formation has become a means of
exerting a real, powerful influence on their pricing
policy.’

The undertakings must therefore have been aware
of the Commission’s position on the adoption of a
single method of
alloy
surcharge.

calculation for

the

(f) Several undertakings invoke the prin-
ciple of market transparency laid down
in Article 60 of the ECSC Treaty

(64) Usinor states in its replies to the two statements of
objections that the price control system known to
industrial economists as the ‘basing point system’
provides specifically for an element of concerted
action, and Thyssen Stahl AG claims that the trans-
parency requirements of Article 60 of the Treaty
require the suppliers to provide general informa-
tion on their intended prices.

(65)

It is true that Article 60 of the Treaty stipulates that
‘the price lists and conditions of sale applied by
undertakings within the common market must be
made public’, but the prices and conditions must
be adopted independently by each firm. They may
not in any event be communicated to the parties
concerned before the Commission is informed. The
obligation to make the prices public does not

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justify holding a meeting having the object or
effect of either influencing the conduct on the
market of an actual or potential competitor or of
disclosing to such a competitor
the course of
conduct which they themselves have decided to
adopt or contemplate adopting on the market.

(66) Usinor also states that the harmonisation of the
alloy surcharge is a result of the ECSC system of
price controls. None of the provisions of the Treaty
or secondary legislation, however, call for the ap-
plication of any surcharge and even less for its
standardization. The decision to add a surcharge to
a price list and the fixing of the amount is a matter
for each individual firm. Article 60 does not allow
undertakings to concert and fix prices between
themselves.

5. Conclusion with regard to Article 65(1)

(71)

(72)

In the ‘beams’ case, the Commission concluded (52)
that since extras form part of the ultimate price to
be paid for the products in the European Com-
munity the agreements to harmonise extras were
agreements to fix prices contrary to Article 65(1).

therefore,

In the present case,
the Commission
considers that the stainless steel producers referred
to in this Decision increased prices in a concerted
manner from 1 February 1994. The facts described
above constitute an infringement of Article 65 of
the Treaty.

B. Fines

(g) Some

undertakings

the
Commission’s finding that the infringe-
ment was continuous

dispute

(67) Usinor states in its reply to the statement of objec-
tions of 23 April 1997 that the increase in one
cost-component is a single, temporary occurrence,
that contacts between the producers did not
continue after January 1994 and that therefore the
infringement cannot be described as being con-
tinuous.

(68) Avesta points out that it announced the introduc-
tion of a new method in November 1996.

(69)

the infringement
Thyssen Stahl AG claims that
ended no later
than July 1994, when nickel
reached the earlier reference values. AST considers
that the infringement was an isolated measure and
that it ended in June 1994.

(70) Only Avesta’s argument can be accepted, as the
introduction of its new system had the effect of
ending the application of the contested measure.
The infringement consisted in a concerted revision
the reference values for the alloy surcharge,
of
values which
been
not
reamended independently by the undertakings
concerned. The fact that nickel reached its former
reference values in July 1994 is irrelevant, as the
surcharge applied by the undertakings was neces-
sarily higher than if the reference values had not
been altered.

subsequently

have

1. Applicability of Article 65(5)

(73)

to Article 65(5)

Pursuant
the Commission may
impose fines or periodic penalty payments on any
undertaking which has entered into an agreement
which is automatically void, or has enforced or
attempted to enforce an agreement or decision
which is automatically void, or has engaged in
practices prohibited by paragraph 1 of that Article.

The Commission may impose fines or periodic
penalty payments not exceeding twice the turnover
on the products which were the subject of
the
agreement, decision or practice prohibited by
Article 65(1); if, however, the purpose of the agree-
ment, decision or practice is to restrict production,
this
technical
maximum may be raised to 10 % of the annual
turnover of the undertakings in question in the
case of fines, and 20 % of the daily turnover in the
case of periodic penalty payments.

development

investment,

or

2. Gravity of the infringement

(74) An agreement or concerted practice aimed at a
uniform increase of a cost component constitutes a
serious
infringement of Community law. The
undertakings justify the decision on the grounds of
the critical economic situation into which the
combined effect of the rise in the price of alloys
and fall in the price of stainless steel had plunged
them. The Commission does not dispute the right
of each undertaking to adopt,
independently,
it cannot,
measures to deal with the situation;
however, accept concerted action by virtually all the
producers of
to the
content of such measures.

flat products as

stainless

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(75)

In view of the blatant nature of the infringement,
symbolic fines would not be appropriate. However,
taking account of the economic and legal elements
referred to above and the relative gravity of the
infringement, the Commission does not consider
that the infringement that is the subject of this
Decision merits very substantial fines.

(76)

For these reasons the amount of the fine imposed
to reflect the gravity of the infringement is set at
ECU 4 million.

onwards, it made the surcharge public only in May
1994 (54), with a view to applying it on its principal
market (Spain) in June.

(83) On the other hand, the economic situation in the
sector at the end of 1993 was particularly critical.
The price of nickel was rising rapidly, while the
price of stainless steel was very low. It should be
noted that this particular situation applies only to
the very beginning of the concerted action.

(77) All the undertakings referred to in this Decision
are large. It is not necessary, therefore, to vary the
amounts of the fines on that score.

(84)

These factors
justify a reduction in the basic
amount of 30 % for Acerinox and 10 % for all the
other undertakings on the grounds of attenuating
circumstances.

(78)

(79)

(80)

(81)

3. Duration of the infringement

The Commission considers (in spite of the views it
sets out in paragraph 50) that the concerted action
began with the meeting in Madrid in December
1993 and has been pursued since then by all the
undertakings concerned, with the exception of
Avesta Sheffield, which announced in November
1996 that it intended to use another calculation
method, and Thyssen Stahl AG, which withdrew
from the stainless flat products sector on 1 January
1995.

The amount imposed to take account of the gravity
of the infringement should therefore be increased
by ECU 1,6 million in the case of Acerinox, ALZ,
AST, Krupp Hoesch Stahl and Usinor. Increases of
ECU 0,4 million and ECU 1,2 million respectively
are applied to Thyssen and Avesta.

The basic amounts are therefore set at ECU 5,6
million for Acerinox, ALZ, AST, Krupp and
Usinor, at ECU 5,2 million for Avesta and at ECU
4,4 million for Thyssen.

4. Aggravating or extenuating circumstances

The Commission considers that Usinor played a
major part in the concerted action: it was Usinor
that did the calculations at the Madrid meeting and
sent the conclusions of the meeting and the defin-
the alloy surcharge to the
itive calculation of
producers after the meeting (53). This justifies an
increase of 25 % in the basic amount for Usinor on
the grounds of aggravating circumstances.

(85)

(86)

(87)

(88)

5. Applicability of the Commission notice on the
non-imposition or reduction of fines in cartel
cases (55)

In their replies to the statement of objections of 19
December 1995,
the undertakings concerned by
this Decision did not deny the existence of a single
method for the calculation of the alloy surcharge
by the various European producers.

The investigations carried out between July 1995
and December 1996 were aimed at determining
any contacts between the undertakings prior to the
modification of the surcharge reference values in
1994.

Some of the undertakings categorically denied that
any communication had taken place at all. In a
statement made during the inspection on 25
September 1996, Acerinox said:

‘No recibieron informaci(cid:155)n’. (56).

Following the inspection on 8 October 1996,
Krupp and Thyssen stated in a letter dated 23
October 1996 that they had notified their decision
only after 17 January 1994 (the same date on
which they notified the surcharge to the Commis-
sion) and had received information from their
competitors only after the latter had notified their
price lists to the Commission (57).

(89) Ugine refused, during the inspection on 17 July
1996, to inform the Commission whether it had
notified its competitors of its plans with regard to a
surcharge (58).

(82)

The Commission also recognises
that while
Acerinox organised the Madrid meeting and
applied the surcharge in Denmark from February

(90) Other undertakings partially confirmed informa-
tion already in the possession of the Commission.
In reply to a request for information, ALZ stated:

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‘ALZ herinnert zich niet
in de periode van 1
augustus 1993 tot 1 februari 1994 inlichtingen
ontvangen te hebben van andere producenten van
roestvrij staal met betrekking tot de wijziging van
(. . .)
de drempelwaarden van de legeringstoeslag.
ALZ heeft vervolgens, rond 15 januari, aan de
andere marktdeelnemers, d.w.z. cli(cid:137)nten, produ-
centen en agenten, meegedeeld dat het voornemens
was een legeringstoeslag bekend te maken voor
leveringen vanaf 1 februari 1994’ (59).

(97) Only Usinor and Avesta acknowledged the exis-
tence of the concerted action. In addition, Avesta
undertook, at the inspection on 18 October 1996,
to examine its files carefully in order to trace any
possible contacts. Some documentary evidence of
such contacts was sent to the Commission on 31
October 1996. Avesta is the only undertaking to
have put an end to the infringement by radically
changing its method of calculating the alloy
surcharge, thereby taking a major commercial risk.
Usinor was the first to inform the Commission of
the Madrid meeting.

(91) AST stated in a letter of 31 October 1996:

‘L’AST precisa comunque di avere sentito dire che
(cid:138) stato rinvenuto dalla Commissione il testo di un
documento che l’AST avrebbe a sua volta successi-
vamente ritrasmesso alla Outokumpu’ (60).

(98)

The statements and the replies to the objections
submitted
by Krupp-Thyssen-Nirosta GmbH,
Thyssen Stahl AG, AST SpA and ALZ NV do not
contribute anything new and dispute the existence
of concerted action.

(92)

In December 1996 and January 1997, following
Commission inspections at the offices of six of the
addressees of this Decision, as well as Outokumpu
and Edelstahl Witten Krefeld, the legal represent-
atives of ALZ, AST, Avesta, Krupp-Thyssen and
Usinor Sacilor and the representatives of Acerinox
informed the Commission of their desire to co-
operate in the current proceedings. Statements
acknowledging the facts were sent to the Commis-
sion by those undertakings on 17 December 1996
(Acerinox, ALZ, Avesta, Krupp and Thyssen,
Usinor Sacilor) and on 10 January 1997 (AST).

(93)

The cooperation must be assessed in the light of
the criteria laid down in the abovementioned
Commission notice on the non-imposition or
reduction of fines in cartel cases.

(94) None of the undertakings qualifies for the condi-
tions set out in the notice under Section B ‘Non-
imposition of a fine or a very substantial reduction
in its amount’ as none of them reported the agree-
ment to the Commission before it started its invest-
igations or, indeed, before it sent the statement of
objections on 19 December 1995.

(95) Nor do any of the undertakings qualify for the
conditions set out in Section C ‘Substantial reduc-
tion in a fine’. Only Avesta ended the infringement
on 1 November 1996, but it was not the first to
supply decisive evidence of the existence of the
agreement. Such evidence was supplied in par-
ticular by Outokumpu at
the inspection on 17
October 1996.

(96) All the undertakings may benefit to varying degrees
from the provisions of Section D ‘Significant reduc-
tion in a fine’.

(99) Acerinox for its part acknowledges in its reply of
24 April 1997 to the statement of objections that
concerted action was taken, but denied its involve-
ment.

(100) Thus, although certain undertakings (Usinor and
the Commission
Avesta) cooperated extensively,
must also bear in mind that they did so extremely
late. The cooperation shown by the other under-
takings (Krupp, Thyssen, AST, ALZ and Acerinox)
was more limited: the firms did not provide any
documentary evidence or facts not already in the
possession of the Commission and did not acknow-
ledge the infringement.

(101) This justifies a reduction of 10 % in the amount of
the fine for all the undertakings except Avesta and
Usinor, to which a reduction of 40 % is applied.

6. Particular
GmbH

case of Krupp Thyssen Nirosta

(102) By letter dated 23 July 1997, Krupp Thyssen
Nirosta GmbH stated that it was assuming liability
for
the acts of Thyssen Stahl AG and Krupp
Hoesch Stahl AG since 1993. The enacting part of
this Decision takes that into account.

C. Non-applicability of Article 65(2)

(103) Under Article 65(2),

the Commission authorises
specialisation agreements; or joint-buying or joint-
selling agreements; or agreements strictly analogous
in nature and effect provided that they meet certain
conditions. On the supposition that there was a
for authorisation
formal agreement, no request

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within the meaning of Article 65 of the ECSC
Treaty was made. In any event, such an agreement
is not such as to belong to the categories that
might qualify for authorisation. On the contrary,
the Commission takes the view that such an agree-
ment constitutes an agreement to fix or determine
prices within the meaning of Article 65(1) of the
ECSC Treaty,

HAS ADOPTED THIS DECISION:

Article 1

Acerinox SA, ALZ NV, Acciai Speciali Terni SpA, Avesta
Sheffield AB, Krupp Hoesch Stahl AG (Krupp Thyssen
Nirosta GmbH as from 1 January 1995), Thyssen Stahl
AG (Krupp Thyssen Nirosta GmbH as from 1 January
1995) and Ugine SA infringed Article 65(1) of the ECSC
Treaty, in the case of Avesta Sheffield from December
1993 to November 1996 and, in the case of the other
undertakings, up to the date of this Decision, namely by
modifying and by applying in a concerted fashion the

reference values used to calculate the alloy surcharge, such
practice having both the object and the effect of restric-
ting and distorting competition within the common
market.

Article 2

The following fines are hereby imposed in respect of the
infringements described in Article 1:

— Acerinox SA:

— ALZ NV:

— Acciai Speciali Terni SpA:

— Avesta Sheffield AB:

ECU 3 530 000

ECU 4 540 000

ECU 4 540 000

ECU 2 810 000

— Krupp Thyssen Nirosta GmbH:

ECU 8 100 000

— Usinor SA:

ECU 3 860 000

Article 3

The fines referred to in Article 2 shall be paid to the
Commission of the European Communities within three
months of the date of notification of this Decision to the
following account numbers.

Address

Germany

Dresdner Bank AG
(BLZ 300 800 00)
D(cid:129)sseldorf

Belgium

Soci(cid:130)t(cid:130) G(cid:130)n(cid:130)rale de Banque SA
3, Montagne du Parc
B-1000 Bruxelles

Spain

Banco Espa ˜nol de Cr(cid:130)dito
Calle Mesena, 80
E-28033 Madrid

France

Soci(cid:130)t(cid:130) G(cid:130)n(cid:130)rale
Agence Centrale
F-75428 Paris Cedex 09

Italy

Banca Commerciale Italiana
I-20121 Milan

Sweden

Nordbanken
H68
S-105 71 Stockholm

Account number for

National currency

ECU

2 114 628

2 114 628 00

210-0000107-62

210-0000107-62

137.003-270

394.002-278

30003-03010-00067030000/22

30003-03010-00077001001/73

961794/02/09

961794/49/56

3959 77 084 85

3968 77 4 76 76

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Upon expiry of that period, interest shall automatically be
payable on the fines at the rate charged by the European
Monetary Institute for transactions in ecus on the first
working day of the month in which this Decision is
adopted, plus 3,5 percentage points, namely 7,75 %.

Article 4

Acerinox SA, ALZ NV, Acciai Speciali Terni SpA, Krupp
Thyssen Nirosta GmbH and Usinor SA shall immediately
put an end to the infringements referred to in Article 1
and shall inform the Commission within three months of
being notified of this Decision of the measures they have
taken to that end.

The undertakings referred to in Article 1 shall refrain
from repeating the acts or conduct specified in the said
Article and from adopting any measure having an equi-
valent effect.

Article 5

This Decision is addressed to:

1. Acerinox SA, Santiago de Compostela 100, E-28035

Madrid;

2. ALZ NV, Industrieterrein Genk-Zuid Rechteroever,

B-3600 Genk;

3. Acciai Speciali Terni SpA, Viale B. Brin 218, I-05100

Terni;

4. Avesta Sheffield AB, Vasagatan 8-10 P.O. Box 16377,

S-10327 Stockholm;

5. Krupp Thyssen Nirosta GmbH, Alleestraße 165,

D-44793 Bochum;

6. Usinor SA, La D(cid:130)fense 7, 13 Cours Valmy, F-92800

Puteaux.

This Decision is enforceable pursuant to Article 92 of the
Treaty.

Done at Brussels, 21 January 1998.

For the Commission

Karel VAN MIERT

Member of the Commission

NOTES

(1) Commission Decision 95/421/EC of 21 December 1994
declaring a concentration to be compatible with the common
market
IV/M.484 — Krupp/Thyssen/Riva/Falck/
Tadfin/AST)

(OJ L 251, 19.10.1995, p. 18).

(Case

(2) See footnote 1.

(3) Commission Decision of 26 July 1994 authorising Fried.
Krupp AG Hoesch-Krupp and Thyssen Stahl AG to set up a
joint venture for the production of flat special stainless steel
products that are resistant to acids and high temperatures.

(4) See for example the statement by Acerinox dated 17
December 1996:
‘La f(cid:155)rmula en su estado actual viene apli-
c ´andose desde el a ˜no 1988.’ (‘The current formula has been
applied since 1988.’) or the statement by AST of 10 January
1997:
‘(. . .) la Ilva SpA (che comprendeva la allora Divisione
Acciai Speciali che, dopo la scissione del 1994 (cid:138) divenuta la
AST) applicava l’extra di lega gi(cid:133) nel 1988’.
(‘(. . .) Ilva SpA
(which then included the “special steels” division which, after
the split in 1994, became AST) was already applying the alloy
surcharge in 1988’).

(5) Commission Decision 90/417/ECSC of 18 July 1990 relating
to a proceeding under Article 65 of the ECSC Treaty con-
cerning an agreement and concerted practices engaged in by
European producers of cold-rolled stainless steel flat products
(OJ L 220, 15.8.1990, p. 28).

(6) Statement by Acerinox (see note 4): ‘Acerinox SA conforme lo
muestran los hechos que posteriormente acontecieron, no
promovi(cid:155) dicha reuni(cid:155)n, aunque si, una vez decidida por las
partes su convocatoria en Madrid, a petici(cid:155)n de los asistentes,

reserv(cid:155) un establecimiento para que la misma pudiera tener
lugar.’ (‘As subsequent events proved, Acerinox SA was not
the initiator of this meeting even if, after the participants
decided to meet in Madrid, and at their request, it booked a
venue for that purpose’).

(7)

‘A meeting was held in Madrid on 15 December 1993. The
decision to hold the meeting was taken by the parties in
order to discuss (. . .) the critical situation in the market for
the raw materials used in the production of stainless steel and
the extreme volatility of the prices of these raw materials.’

(8) Original version.

(9)

‘The discussion concerned the generally poor situation as well
as possible solutions.’

(10)

(11)

‘A meeting took place on 16 December 1993 at the Hotel
[ . . . ] in Madrid which allowed stainless steel producers to
hold an exchange of views.’

‘In this context, and in order to find a solution to this crisis, a
meeting was held between the leading European steel produ-
cers’.

(12) Acerinox statement: ‘El Sr Laquay expuso c(cid:155)mo se hab(cid:146)a apli-
cado hist(cid:155)ricamente el extra de aleaci(cid:155)n’.
(‘Mr Laquay
explained how the alloy surcharge had been applied in the
past’).

(13)

‘Mr Laquay, as a specialist in calculating the alloy surcharge,
calculated, with the aid of a flip chart and taking as example
the prices applied by his undertaking in France, the addi-
tional turnover that could be achieved by appropriately al-
tering the trigger threshold on the French market’.

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1. 4. 98

(14)

‘At the meeting, the participants also examined whether it
was necessary, in view of the instability of raw material prices,
a market in which Acerinox has no influence, to apply the
alloy surcharge to customers using the tried and tested
method by means of the most appropriate reference values so
as to counter the increasingly speculative nature of trans-
actions on the London Metals Exchange.’

bases and results based on the method it intended to use on
the French domestic or European markets in the event of
non-alignment’.

(26)

‘Outokumpu a (cid:130)t(cid:130) inform(cid:130)e par t(cid:130)l(cid:130)copie des conclusions de
la r(cid:130)union de Madrid de 20.12.1993’
(‘Outokumpu was
informed by fax of the conclusions of the Madrid meeting on
20.12.1993’).

(15)

‘At the meeting, participants discussed the initiatives they
intended to take in this area, and those they had taken quite
independently before (at least as regards AST). There was a
natural convergence of views on the adoption, as a minimum
level in the context of this formula, of the September 1993
nickel price.’

(27)

‘The lack of direct knowledge of the details does not however
make it possible to deny categorically that
there were
the apparent
exchanges of
content of these messages, it is likewise impossible to state
that they did not influence AST in determining the values
used in the method.’

(. . .) In view of

information.

(16) Original version.

(17)

‘Under the circumstances, the only possible solution to halt
the trend is to try to reintroduce the alloy surcharge, which
had been suspended owing to the fall in prices for alloys
below the trigger level applied till then (. . .) At the meeting,
Mr Pl(cid:148)macher then stated that Krupp would in future take
the low September posted price for nickel as the trigger
threshold.’

(18)

‘During the meeting, certain participants, including Ugine,
expressed their intention, with or without reservations, to
reapply the alloy surcharge together with a new trigger
threshold (the lowest nickel price in September) as from 1
February 1994.’

(19) Original version.

(20) Original version.

(21)

‘A majority of those present was in favour of applying the
surcharge as soon as possible.’

(22)

‘Acerinox said it did not plan to apply the surcharge in Spain
because it considered the measure would not help to increase
demand and would not have a positive effect on Spanish
industry which was in the depths of a severe crisis.’

(23) Fax obtained at Outokumpu’s offices during the inspection

on 17 October 1996.

(24) Original version.

(28) OJ 18 of the ECSC, 1.8.1954, p. 470.

(29) OJ L 221, 7.8.1986, p. 14.

(30) Avesta statement — Attachment 1:

‘Alloy surcharges are
likely to be introduced on CR and CPP products from 1
February. The details may not be available until early January
1994 when I will let you know.’

(31) Reply given by ALZ to the request for information.

(32) Avesta statement:

‘On 10 January 1994, ASAB produced a
full internal surcharge calculation for application in February.
This internal calculation used the same trigger values as
contained in Mr Laquay’s fax of 20 December 1993.’

(33) Document obtained from the offices of Outokumpu.

(34) Original text, from the Avesta statement.

(35) Original text.

(36) Original text.

(37) Document taken from the offices of Outokumpu.

(38) Document taken from the offices of Outokumpu.

(25)

‘Following the meeting, Ugine notified participants by fax on
20 December 1993 and 11 January 1994 of the calculation

(39) Avesta statement.

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(40) Original text.

(41) Original text.

(42) Original text.

(43) Original text.

(44) Judgment of 13 July 1972, Case 48/69 ICI v. Commission of

the European Communities [1972] ECR 619.

(45) Opinion 1-61 of 13 December 1961 of the Court of Justice

[1961] ECR 505.

(46) OJ C 75, 29.7.1968, p. 3.

(47) ALZ, Avesta, AST, Krupp, Thyssen.

(48) ALZ, AST, Krupp, Thyssen.

(49) ALZ, AST, Avesta, Krupp, Thyssen, Usinor Sacilor.

(50) AST, Krupp, Thyssen.

(51) Commission Decision 80/257/ECSC of 8 February 1980 re-
lating to a proceeding under Article 65 of the ECSC Treaty in
respect of a price-fixing system for the sale of rolled steel
products ex stock by stockholders on the German market (OJ
L 62, 7.3.1980, p. 28, at paragraph 25).

(60)

(52) Commission Decision 94/215/ECSC of 16 February 1994
relating to a proceeding pursuant to Article 65 of the ECSC
Treaty
and concerted practices
engaged in by European producers of beams (OJ L 116,
6.5.1994, p. 1, at paragraph 249).

concerning agreements

(53) See paragraphs 23, 28 and 32.
(54) See paragraphs 21, 27, 33 and 37.
(55) OJ C 207, 18.7.1996, p. 4.
(56)
(57) Inspection minutes — Krupp.
(58) Inspection minutes — Ugine.
(59)

‘We did not receive any information’.

amendment of

‘ALZ does not recall having received from other stainless
steel producers, between 1 August 1993 and 1 February 1994,
alloy
information concerning the
surcharge trigger values. (. . .) ALZ subsequently, towards 15
January, informed the other market operators, i.e. its cus-
tomers, producers and agents, that it intended to announce
the application of a new alloy surcharge from 1 February
1994.’
‘AST would point out, however, that it had heard that the
Commission had discovered a document which AST in turn
allegedly sent to Outokumpu’.

the