2001/16/EC: Commission Decision of 12 July 2000 pursuant to Articles 14 and 15 of Council Regulation (EEC) No 4064/89 imposing fines on an undertaking for supplying incomplete information in merger control proceedings (Case COMP/M.1634 — Mitsubishi Heavy Industries) (Text with EEA relevance) (notified under document number C(2000) 1981)
Date: 2000-07-12
Institutions: European Commission
Subjects: economic concentration, exchange of information, fine, infringement of EU law, merger control, thermal equipment

9.1.2001

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Official Journal of the European Communities

L 4/31

COMMISSION DECISION

of 12 July 2000

pursuant to Articles 14 and 15 of Council Regulation (EEC) No 4064/89 imposing fines on an
(Case
undertaking for

supplying incomplete information in merger control proceedings

COMP/M.1634 — Mitsubishi Heavy Industries)

(notified under document number C(2000) 1981)

(Only the English text is authentic)

(Text with EEA relevance)

(2001/16/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

fax dated 14 June 1999 that it had provided all informa-
tion that could be provided.

Having regard to the Treaty establishing the European
Community,

Having regard to the Agreement on the European Economic
Area,

Having regard to Council Regulation (EEC) No 4064/89 of 21
December 1989 on the control of concentrations between
undertakings (1), as last amended by Council Regulation (EC)
No 1310/97 (2) and in particular Articles 14(1)(c) and 15(1)
thereof,

Having given the undertakings concerned the opportunity to
make known their views on the objections raised by the
Commission,

Having regard to the opinion of the Advisory Committee on
Concentrations,

Whereas:

I. INTRODUCTION

(1)

(2)

On 26 March 1999, the Commission received a noti-
fication pursuant to Article 4 of Council Regulation
(EEC) No 4064/89 (‘the Merger Regulation’) of a concen-
tration whereby Kvaerner ASA (‘Kvaerner’) and A.
Ahlström Corporation (‘Ahlström’) notified their inten-
tion to establish a joint venture by combining the
pulping equipment engineering businesses of Kvaerner
Pulp and Paper (‘KPP’) and Ahlström Machinery Group
(‘AMG’) (3).

In relation with its extended investigation into the noti-
the Commission addressed by fax a
fied operation,
request for information to Mitsubishi Heavy Industries
Europe, Ltd (‘Mitsubishi’), pursuant to Article 11 of the
Merger Regulation. The period to supply the information
requested expired on 10 June 1999. Mitsubishi failed to
reply to the request for information and claimed in its

(1) OJ L 395, 30.12.1989, p. 1; corrigendum OJ L 257, 21.9.1990,

p. 13.

(2) OJ L 180, 9.7.1997, p. 1.
(3) Case IV/M.1431 — Ahlström/Kvaerner

(3)

(4)

(5)

(6)

Given that no information as requested was forthcoming
from Mitsubishi, the Commission sent a copy of its
request for information by fax on 17 June 1999. Mitsu-
bishi replied by fax dated 22 June 1999. However, the
information in this fax was incomplete, as was admitted
by Mitsubishi

itself in the reply.

the Commission required Mitsubishi

On 2 July 1999, the Commission adopted a decision
pursuant to Article 11(5) of the Merger Regulation. In
the decision,
to
supply the relevant information no later than on 9 July
1999. The information requested was specified in the
annex to the decision. In its decision, the Commission
indicated, pursuant to Article 15(1) of the Merger Regu-
lation, that should Mitsubishi fail to supply the informa-
tion requested within the period prescribed, it shall incur
a periodic penalty payment of EUR 15 000 per day,
calculated from the end of that period. The decision was
notified to Mitsubishi on 6 July 1999. Mitsubishi has not
provided the information requested by the Commission's
decision, despite several reminders.

On 20 December 1999, the Commission sent a State-
ment of Objections to Mitsubishi
in order to allow
Mitsubishi make known its views on the infringement of
Article 11 of the Merger Regulation committed by it.
Mitsubishi did not reply to the Statement of Objections.

II. INFRINGEMENT OF THE MERGER REGULATION:

RELEVANT FACTS

Mitsubishi failed to supply the full information requested
by the Commission in its decision of 2 July 1999
pursuant to Article 11(5) of the Merger Regulation. In
particular, Mitsubishi failed to supply the information
requested concerning the price charged by Mitsubishi
for:

— each new recovery boiler sold to the chemical pulp
industry in order to be incorporated into a new pulp
mill worldwide since 1990,

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— each new recovery boiler sold to the chemical pulp
industry in order to replace an existing recovery
boiler worldwide since 1990.

The reply from Mitsubishi did not include either the
turnover achieved by Mitsubishi every year since 1990
for:

— refurbishment activities of recovery boilers,

— maintenance activities of recovery boilers.

Mitsubishi stated that to identify the figures necessary to
provide the information requested would entail excessive
and disproportionate amounts of work, since sales of the
boilers in question represented only a small proportion
of its total boiler turnover.

III. LEGAL ASSESSMENT

By failing to supply the information requested by the
Commission within the period fixed by its decision
pursuant to Article 11(5) of the Merger Regulation, or at
all, Mitsubishi has infringed Article 11 of the Merger
Regulation.

Mitsubishi's failure to supply that information consti-
tutes an infringement for which a fine may be imposed
under Article 14(1)(c) and a periodic penalty payment
may be imposed under Article 15(1) of
the Merger
Regulation

(7)

(8)

(9)

IV. IMPOSITION OF FINES AND PERIODIC PENALTY

PAYMENTS

(10) Under Article 14(1)(c) of the Merger Regulation, the
Commission may by decision impose fines of
from
EUR 1 000 to EUR 50 000 on undertakings which,
intentionally or negligently, supply incorrect informa-
tion in response to a request made pursuant to Article
11 of the Merger Regulation or which fail to supply
information within the period fixed by a decision
pursuant Article 11. Under Article 14(3), in setting the
amount of the fine, the Commission has to take account
the infringement. The
of
Commission thereby takes account of any aggravating or
attenuating circumstances.

the nature and gravity of

(11) Under Article 15(1) of

the Merger Regulation,

the
Commission may impose on undertakings periodic
penalty payments of up to EUR 25 000 for each day of
delay calculated from the date set in the decision in
order to compel them to supply complete and correct
information which it has requested by decision pursuant
to Article 11 of the Merger Regulation.
In addition,
under Article 15(3) of the Merger Regulation, where the
undertakings have satisfied the obligation which it was
the purpose of the periodic penalty payment to enforce,
the Commission may set the total amount of the peri-
odic penalty payments at a lower figure than that which
would arise under the original decision. In its decision of
2 July 1999 the Commission imposed a periodic penalty
payment of EUR 15 000 on Mitsubishi for each day of
failure to provide the required information.

A. Assessment under Article 14

Nature of the infringement

(12)

The infringement committed by Mitsubishi
took the
form of failure to provide information within the period
to Article
fixed by a Commission decision pursuant
information
the Merger Regulation. The
11(5) of
requested concerned the company's activities in the
worldwide recovery boiler business (see recital 6).

Gravity of the infringement

(13)

The Commission considers that the infringement of the
is a very
Merger Regulation committed by Mitsubishi
serious one. The reasons for this are set out hereunder.

(14) Under Article 11(1) of

the Merger Regulation,

the
Commission may obtain all necessary information from
undertakings in carrying out the duties assigned to it by
the Merger Regulation. The information requested by the
Commission from Mitsubishi was necessary, within the
meaning of Article 11(1) of the Merger Regulation, for
the proper assessment of the compatibility of the noti-
fied operation with the common market. In particular,
the information requested was necessary in order to
determine the market share of the parties to the notified
operation and those of the other market participants in
the markets for engineering and supply of recovery
boilers.

(15) Given the limited number of manufacturers of recovery
boilers for the pulp and paper industry worldwide,
Mitsubishi must be considered to be an important
source of information concerning the functioning of this
market. Following Mitsubishi's failure to supply the
information requested, the Commission was forced to
base its assessment of the markets for recovery boilers
partly on estimates. In particular, in view of Mitsubishi's
failure to supply information on prices and turnover
obtained from its worldwide recovery boiler business,
the Commission had no other alternative than to esti-
mate the overall size of the market and the market
shares of the market participants partly on information
obtained from other market operators and customers.
This increased significantly the Commission's workload
and led to estimates, which cannot be considered to be
as reliable as first-hand information from Mitsubishi
itself.

(16)

The information requested from Mitsubishi had a
material impact on the assessment of the substance of
the case. More precisely, the information requested from
Mitsubishi had a direct bearing on the Commission's
assessment of the position of AMG and KPP in the
worldwide markets for recovery boilers. In particular, a
gap of some 10 % persisted between the parties' and the
Commission's estimates concerning the parties' market
share in recovery boilers. Following Mitsubishi's failure
to supply reliable figures on its activities, the Commis-
sion could not establish the exact market shares of the

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In addition,
the competitors.
parties and those of
following Mitsubishi's
failure to supply information
concerning its activities in refurbishment and mainte-
nance of recovery boilers, the Commission could not
verify the parties' claim concerning the importance of
the refurbishment market nor establish Mitsubishi's posi-
tion there. Therefore, it must be considered that Mitsu-
bishi's
failure to supply the information requested
constitutes a very serious infringement.

Duration

(21)

The infringement has not ceased. To date, Mitsubishi has
not complied with the Commission decision of 2 July of
1999 and has not provided the information requested.
However, it may be considered that Mitsubishi's obliga-
tion to provide the information became nugatory when
the proceedings
the merger between
Ahlström and Kvaerner were closed on 8 September
1999.

concerning

(17) Mitsubishi claimed in its fax of 14 June 1999 that it had
provided all
could be provided.
information that
However, Mitsubishi is a large industrial conglomerate,
active worldwide in several business sectors. It is there-
fore reasonable to conclude that Mitsubishi has detailed
knowledge of the activities which it carries on. Accord-
ingly, given the size of the company, it is reasonable to
assume that Mitsubishi has modern reporting systems
that would have enabled it to provide the information
requested. Also, in view of the fact that the Commission
gave Mitsubishi several extensions to the original dead-
line resulting almost in an extra month to comply with
the request to supply information, it must be considered
that Mitsubishi had the necessary time to provide the
requested information. It is also to be noted that all the
other recovery boiler manufacturers contacted by the
Commission could provide the information requested.
Moreover, given the fact that Mitsubishi failed to make
an attempt to provide even its best estimates of the
information requested, it must be considered that Mitsu-
bishi did not intend to comply with the Commission
decision.

V. CONCLUSION

(22) On the basis of the above, and taking account of the
circumstances in the case, the Commission considers it
appropriate to impose the fine of EUR 50 000 on
Mitsubishi for failing to comply with the Commission
decision of 2 July 1999, pursuant to Article 14(1)(c) of
the Merger Regulation.

(23)

the rate of EUR 15 000 per day,

the total amount of periodic penalty
Furthermore,
payments to be paid by Mitsubishi in accordance with
the Commission decision of 2 July 1999 should be fixed
at
from the day
following the expiry of the deadline to provide the infor-
is, 10 July 1999) until 8
mation requested (that
September 1999, the date on which the proceedings
related to the case M.1431 — Ahlström/Kvaerner ended,
that is to say, 60 days,

(18)

Based on the foregoing,
it has to be concluded that
Mitsubishi has deliberately failed to supply the Commis-
sion with the relevant information. The Commission
considers that the failure to comply with the Commis-
sion decision of 2 July 1999 was intentional.

HAS ADOPTED THIS DECISION:

Article 1

(19)

There are no attenuating or aggravating circumstances to
be taken into account.

B. Assessment under Article 15

(20)

The Commission decision of 2 July 1999 imposed on
to
Mitsubishi a periodic penalty payment pursuant
Article 15(1) of the Merger Regulation in the event that
it should fail to supply the information requested within
the period prescribed. As indicated above, Mitsubishi did
not provide the information requested. Therefore, Mitsu-
bishi has not, within the meaning of Article 15(3), satis-
fied the obligation which it was the purpose of the
periodic penalty payment to enforce. Consequently, the
Commission considers that Mitsubishi should be fined
the full amount of periodic penalty payment, pursuant
to Article 15(1) of the Merger Regulation.

A fine of EUR 50 000 is hereby imposed on Mitsubishi Heavy
Industries Europe, Ltd (‘Mitsubishi’) pursuant to Article 14(1)(c)
of Regulation (EEC) No 4064/89 for having supplied incom-
plete information to the Commission in merger control
proceedings.

The total amount of periodic penalty payments to be paid by
Mitsubishi pursuant to the Commission decision of 2 July
1999, for its failure to supply complete and correct informa-
tion as
is hereby fixed at
EUR 900 000.

required by that decision,

Article 2

The fine and the definitive amount of periodic penalty
payments referred to in Article 1 shall be paid within three
months of the date of notification of this Decision into bank
account No 642-0029000-95 of the European Commission
with the bank Banco Bilbao Vizcaya Argentaria BBVA, Avenue
des Arts 43, B-1040 Brussels.

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After the expiry of that period, interest shall be automatically payable at the rate applied by the European
Central Bank to its main refinancing operations on the first working day of the month in which this
Decision is adopted, that is 4,29 %, plus 3,5 percentage points, making 7,79 %.

Article 3

This Decision is addressed to:

Mitsubishi Heavy Industries Europe, Ltd
Bow Bells House
Bread Street (Cheapside)
London, EC4M 9BQ
United Kingdom.

Done at Brussels, 12 July 2000.

For the Commission

Mario MONTI

Member of the Commission