2003/6/EC: Commission Decision of 13 December 2000 relating to a proceeding pursuant to Article 82 of the EC Treaty (COMP/33.133-C: Soda ash — Solvay) (notified under document number C(2000) 3795) (Text with EEA relevance)
Date: 2000-12-13
Institutions: European Commission
Subjects: chemical industry, chemical salt, delivery, dominant position, price agreement, reduced price, restriction on competition

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COMMISSION DECISION

of 13 December 2000

relating to a proceeding pursuant to Article 82 of the EC Treaty

(COMP/33.133-C: Soda ash (cid:151) Solvay)

(notified under document number C(2000) 3795)

(Only the French text is authentic)

(Text with EEA relevance)

(2003/6/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

relating to a proceeding pursuant to Article 82 of the EC
Treaty

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

Having regard to the Commission Decision of 19 February
1990 to open a proceeding on its own initiative pursuant to
Article 3 of Regulation No 17,

Having given the undertaking concerned the opportunity to
make known its views on the objections
raised by the
Commission, pursuant to Article 19(1) of Regulation No 17
and Commission Regulation No 99/63/EEC of 25 July 1963
on the hearings provided for in Article 19(1) and (2) of
Council Regulation No 17 (3),

consulting the Advisory Committee on Restrictive

After
Practices and Dominant Positions,

Whereas:

PART I

THE FACTS

A. SUMMARY OF THE INFRINGEMENT

1. THE INVESTIGATIONS

(1)

The present Decision arises out of investigations carried
out by the Commission in March 1989 pursuant to

(1) OJ 13, 21.2.1962, p. 204/62.
(2) OJ L 148, 15.6.1999, p. 5.
(3) OJ 127, 20.8.1963, p. 2268/63.

(2)

(3)

(4)

Article 14(3) of Regulation No 17 at the premises of
Community producers of soda ash. By means of the said
investigations and subsequent enquiries under Article 11
of Regulation No 17 the Commission discovered
documentary evidence showing that an infringement of
Article 86 of the EEC Treaty (now Article 82 of the EC
Treaty) had been committed by Solvay et Cie SA (now
Solvay SA), Brussels (Solvay).

2. THE INFRINGEMENT OF ARTICLE 82 BY SOLVAY

From about 1983 until around the end of 1990 Solvay
abused the dominant position which it held in the
market for soda ash in the Community (excluding the
United Kingdom and Ireland) by applying to its major
customers a system of loyalty rebates and discounts by
reference to marginal tonnage, contractual arrangements
tending to ensure an effective exclusivity of supply for
Solvay and other devices which had the object and
tying the said customers to Solvay for the
effect of
whole
excluding
competitors.

requirements

their

and

of

of

B. THE SODA ASH MARKET

1. THE PRODUCT

The present procedure concerns
soda ash (sodium
carbonate), an alkaline chemical commodity which is
mainly used as a raw material
in the manufacture of
glass. Soda ash is the primary source of sodium oxide,
which acts as a flux in the glass-melting process. Soda
ash is also used in the chemical
industry for making
detergents and in metallurgy.

In Europe, soda ash is manufactured from common salt
and limestone by the (cid:145)ammonia-soda(cid:146) process invented
by Solvay in 1865. The Solvay process initially produces
light ash which requires a further stage of densification
two forms are
to produce

the dense form. The

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chemically identical but dense ash is the preferred form
for glass manufacture.

almost exclusively to the United Kingdom and Ireland
and held over 90 % of the British market.

(5)

(6)

(cid:145)natural(cid:146) soda ash is
In the United States of America,
mined from trona ore deposits
found mainly in
Wyoming. After mining, the trona ore is purified and
roasted in refineries. Natural soda ash is produced only
in dense form. Natural ash is also found in Africa and
Australia.

All soda ash produced in the United States of America
is now obtained naturally (the last synthetic production
plant was closed by 1986) while in Europe the entire
its
production is of synthetic material. By reason of
lower salt content, natural soda ash from the United
States of America is particularly suitable
the
manufacture of glass, and some glass producers who
purchase mainly synthetic ash may seek to mix it with
American natural ash in order to achieve the required
concentration.

for

2. THE PRODUCERS

(7)

During the period under consideration there were six
producers of synthetic soda ash in the Community:

3. THE MARKET WORLDWIDE

annum,

around 1 % per

(12) Worldwide demand for soda ash during the 1980s grew
although there were
at
substantial
In the developed
countries demand was static from 1980 until 1987,
after which there was a considerable upturn in the
market. Over half the soda ash produced worldwide was
consumed by the glass industry.

regional divergences.

(13) World soda ash capacity (natural and synthetic) in 1989
was around 36 million tonnes (nominal) per annum, of
which the Community accounted for some 7,2 million
tonnes, with Solvay having capacity of some 4,3 million
tonnes and ICI 1 million tonnes. (Practical or effective
(cid:145)nameplate(cid:146)
capacity was
capacity.) Soda ash consumption in the Community in
1989 was around 5,5 million tonnes annually, worth
some ECU 900 million.

some 85 % to 90 % of

(14)

(15)

(16)

(cid:151) Solvay,

(cid:151) Imperial Chemical Industries (ICI),

(cid:151) Rh(cid:244)ne-Poulenc,

(cid:151) Akzo,

(cid:151) Matthes & Weber (M & W),

(cid:151) Chemische Fabrik Kalk, Cologne (CFK).

Solvay was the largest single producer of synthetic soda
ash both worldwide and in the Community: it operated
plants in Austria, Belgium, France, Germany, Italy, Spain
and Portugal, and with some 60 % of the west European
market was the undisputed market leader.

Solvay had an established (cid:145)direction nationale(cid:146) ((cid:145)DN(cid:146)) for
each of Austria, Belgium and Luxembourg, France,
Germany,
the Netherlands, Portugal, Spain and
Switzerland to handle its commercial activities, with the
headquarters in Brussels exercising a supervisory and
coordinating role.

Italy,

ICI Soda Ash Products had since 1987 been operated as
a separate business within ICI’s Chemicals and Polymers
Division. Formerly it was part of ICI’s Mond Division.

The six American natural ash producers had total
nominal capacity of 9,5 million tonnes per year and a
domestic market demand in 1989 of some 6,5 million.
Natural ash production in the United States of America
in 1989 was almost 9 million tonnes. The American
producers supplied the whole of their home market and
exported the balance of production. Costs of production
of natural ash are very much lower
the
synthetic product, but the mines are located far from
their principal markets
are
correspondingly high.

and distribution costs

than for

The American producers of dense ash were viewed by
the European manufacturers as the major competitive
threat in their home markets. At the exchange rates
prevailing in the late 1980s it was possible for those
producers to sell in Europe at prices substantially below
the local market price without dumping.

The east European producers accounted for some 30 %
of world soda ash capacity, producing around 9 million
tonnes annually. The Soviet Union consumed over half
the production and was a net importer. Almost all of
the excess production exported by the east European
light ash. Despite the
countries was in the form of
existence of
still
there were
substantial
imports into the Community of light soda
ash from Comecon countries.

anti-dumping duties,

ICI was the second largest Community producer of soda
ash, with two manufacturing sites
in Northwich,
Cheshire, but it confined its sales in the Community

(17) During the 1980s there was a marked increase in
demand and soda ash was fully sold worldwide. Plants
were running at maximum output
in 1990. Chinese
manufacture was to increase by some 500 000 tonnes

(8)

(9)

(10)

(11)

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per annum and production in Botswana (for South
another 300 000 tonnes,
Africa) was
developments which were to result in the displacement
of imports from other production areas.

to produce

4. THE COMMUNITY

Solvay was the market leader with almost 60 % of the
total Community market and sales in all Member States
except for the United Kingdom and Ireland. After three
years of stagnant demand in the mid-1980s, sales of
ash in western Europe began to increase
soda
substantially in 1987.
In 1988 and 1989 producers
worked at full capacity.

still

for soda ash in the late
The west European market
1980s was
characterised by separation along
national lines. The producers tended to concentrate their
sales on those Member States where they possessed
production facilities, although from 1981 or 1982
onwards the smaller producers (cid:151) CFK, M & W and
Akzo (cid:151) increased their
(cid:145)home(cid:146)
markets.

sales outside their

There was no competition between Solvay and ICI, each
limiting its Community sales to its traditional (cid:145)spheres of
influence(cid:146) in continental western Europe and the British
Isles respectively. Both ICI and Solvay had substantial
export business
to non-European overseas markets
which were supplied from the Community. A large part
of ICI’s exports in fact consisted of material supplied by
Solvay on ICI’s behalf.

(18)

(19)

(20)

(21)

In the Member States where Solvay was the sole locally
established producer (Italy, Portugal and Spain) it had a
virtually complete monopoly.

(22)

Solvay’s market share was in excess of 80 % in Belgium,
55 % in France and 52 % in Germany.
ICI had over
90 % of the British market, the only alternative sources
of supply being the United States of America and
Poland.

(23) On the demand side,

the output of

the main customers

in the
Community were the glass manufacturers. Some 65 %
to 70 % of
the west European
manufacturers was used in the manufacture of flat and
hollow (container) glass. Soda ash was one of the major
cost components in glass production, accounting for
some 60 % of raw material batch costs. Most glass
producers operate continuous process plants and require
an assured supply of ash.
In most cases they had a
relatively long-term contract with one major supplier

the

industry was

for the larger part of their requirements, with another
supplier as a secondary source. During the 1980s the
glass
a Europe-wide
consolidation with large manufacturers operating on a
pan-European basis
and manufacturing in several
Member States. The chemical industry took some 20 %
of soda ash consumption and metallurgical applications
around 5 %.

subject of

5. UNITED STATES NATURAL ASH

(24)

Since the development of natural ash mining in the
1960s the American market had shown a substantial
excess of capacity over domestic demand, and in the
late 1980s a surplus of some 2,5 million tonnes was
available annually for export.

(25) Given the oversupply and the presence of a number of
producers with similar costs,
the American domestic
market was marked by strong price competition. The
product was sold in the United States of America at a
substantial discount off (cid:145)list(cid:146) price (USD 93/short ton fob
Wyoming) the net ex-works price at the end of 1989
to which must be
being around USD 73/short
added transport costs
industrial
centres. List prices were raised by most producers to
USD 98/short ton with effect from 1 July 1990 and the
effective price went up to around USD 85.

to the East Coast

ton,

(26)

In 1982 American

The pressure to export
led to the United States
producers attempting to penetrate the European and
other markets. Natural soda ash began to appear in the
Community in the late 1970s, principally in the United
Kingdom.
the
Community amounted to some 100 000 tonnes, almost
80 000 tonnes of
this in the United Kingdom. The
European industry successfully applied for anti-dumping
protection against American dense soda ash imports in
1982. (Anti-dumping measures had also been in force
against east European imports of light, but not dense,
ash since October 1982.)

imports

into

(27)

The measures
in force in the late 1980s granting
anti-dumping protection against American dense ash
involved:

(a)

for the two producers then in the market, Allied
(now General Chemical) and Texas Gulf, minimum
price undertakings of GBP 112,26/tonne ex-store
(Commission Regulation (EEC) No 2253/84) (4);

(4) OJ L 206, 2.8.1984, p. 15.

(28)

(29)

(30)

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(b) for those producers not

in the market, Tenneco,
KMG, FMC and Stauffer, a definitive anti-dumping
duty of ECU 67,49/tonne (Council Regulation (EEC)
No 3337/84) (5).

Commerce: initially its activities were restricted to Japan
and only three producers took part. In December 1983
all
joined to form the
American Natural Soda Ash Corporation (Ansac).

six natural ash producers

(34)

The price undertakings as negotiated provided for
conversion into other currencies at the exchange rates
then prevailing, and with the changes in parities since
1984 the undertaking price for Germany, France and
other markets was substantially above the market price
so no sales were commercially feasible under
the
undertaking outside the United Kingdom.

The function of Ansac was to act as a joint sales agency
for the marketing and distribution of American soda ash
exports outside America. Its sales were around USD 250
million annually. With the objective of extending its
activities to the west European market (to replace sales
its
by
arrangements to the Commission with a request
for
negative clearance or exemption under Article 81(3).

producers),

individual

notified

Ansac

Texas Gulf suffered a loss in volume following the
introduction of anti-dumping measures and withdrew
from the United Kingdom market in 1985 so that in
1990, of
the American producers, only General
Chemical was still supplying in the United Kingdom,
although at a rate of only around 30 000 tonnes per
year.

thereby

affecting mainly

From 1987 onwards General Chemical also targeted
and
France,
Rhone-Poulenc, which shared that market. Texas Gulf
also sold some tonnage in Belgium. In both cases the
imports were made free of anti-dumping duties under
special rules relating to inward processing.

Solvay

(31) A number of large Community customers in the glass
sector had indicated their intention to take a substantial
part of
their business away from the Community
producers and to buy from the United States of
America. Until 1990 however a total of only about
40 000 tonnes was supplied in continental western
Europe (as opposed to the United Kingdom and Ireland)
by the American producers, almost all of it under the
inward processing rules.

(32)

The anti-dumping measures provided for by Regulation
(EEC) No 3337/84 expired in November 1989. A
review of the measures had been requested by certain
the
American producers and by representatives of
Community glassmaking industry in 1988. On 7
September 1990 the review was terminated without
protective measures
(Commission
being
Decision 90/507/EEC) (6).

imposed

(33)

In 1982, some of the American producers formed an
Export Association under the Webb-Pommerene Act of
1918 with the approval of the American Department of

(35) Ansac’s application was

the subject of Commission
Decision 91/301/EEC (7), under which an exemption
was refused.

C. BACKGROUND

1. SOLVAY’S POSITION IN THE COMMUNITY SODA ASH

MARKET DURING THE PERIOD UNDER CONSIDERATION

(36)

In the nine west European national markets in which
Solvay had its own sales organisation (the nine
(cid:145)directions nationales(cid:146) or (cid:145)DNs(cid:146), which included Austria
and Switzerland) it had a stable market share of around
70 %. Its four competitors in the Community together
had only 26 %. In the Community excluding the British
Isles (where ICI had a near-monopoly), Solvay’s market
share was historically around 70 %. With the sole
exception of the Netherlands (left largely to NSI and
then Akzo as a result of a market-sharing agreement
made in 1955 which is not the subject of proceedings)
Solvay was the largest, or in some cases the exclusive,
supplier of soda ash in each of the Member States in
which it sold.

(37)

Solvay as the largest producer of salt in the Community
was very favourably placed as regards the supply of the
principal raw material for soda ash.

2. SOLVAY’S COMPETITORS

(38)

The only other producer
in Europe comparable in
strength to Solvay was ICI, which did not compete in
any of Solvay’s markets. With the possible exception of
Akzo, which by virtue of
its location on the North
Dutch coast claimed as its (cid:145)natural backyard(cid:146) not only
the Netherlands but also north Germany and Denmark,
their
the other producers

tended to concentrate

(5) OJ L 311, 29.11.1984, p. 26.
(6) OJ L 283, 16.10.1990, p. 38.

(7) OJ L 152, 15.6.1991, p. 54.

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some exports

Community sales on their respective national markets.
Thus Rhone-Poulenc conducted 95 % of its Community
soda ash business in France; CFK and Matthes & Weber
sent
to the Netherlands, France and
Luxembourg but again their main effort was on their
local market. Compared with Solvay’s 70 %, the other
producers’ market shares in the continental Community
Member States ranged from 4 % to 11 %.

The main danger seen by Solvay to its position in its
European market came not
from other Community
producers but
from American natural ash. The east
European producers supplied mainly light ash, which is
industry. The
not normally used
anti-dumping measures
in 1983 had
provided Solvay with a substantial degree of protection
against such imports (see recital 49).

glass
introduced

the

by

3. SOLVAY’S CUSTOMERS

Solvay’s principal customer base was in the glass sector,
soda ash
which accounted for 66 % to 68 % of
consumption in western Europe. The glass sector itself
was divided between container glass and flat glass in the
proportion 2:1.

Solvay was the principal or the sole supplier of virtually
all the glass producers in continental western Europe.
There were only very few customers where one of the
other soda ash producers was the (cid:145)first(cid:146) supplier. Thus in
1988, Solvay had 82 % of the soda ash business for flat
glass in the market formed by its nine (cid:145)DNs(cid:146);
in the
container glass sector, it had 74 % of the total available
business.

Solvay’s largest customer was the Saint-Gobain Group,
with (cid:145)evergreen(cid:146) contracts in the different Member States
terminable on 24 months notice, covering an offtake in
western Europe of over 500 000 tonnes per year. There
was also a secret
(cid:145)protocol(cid:146) providing for a (cid:145)group
rebate(cid:146) of 1,5 % per year on all sales in Europe. Prices
and other contractual terms were however negotiated
on a national basis between the appropriate Solvay (cid:145)DN(cid:146)
and the Saint-Gobain company in the Member State in
question. Many other customers also had an (cid:145)evergreen(cid:146)
contract providing for a 24-month notice period.

(39)

(40)

(41)

(42)

4. SOLVAY’S SALES ORGANISATION

(43)

Solvay’s production and marketing operations for soda
ash in western Europe were organised on a national

basis with a separate (cid:145)DN(cid:146) serving each of the different
considerable price variations
markets. There were
between the different Member States, with ex-works
prices in France some 10 % below the levels in Belgium.
In the glass sector in particular there was however
the
during the 1980s a marked tendency towards
formation of Europe-wide groups. While Solvay insists
that price negotiations took place at a national level (i.e.
between the Solvay (cid:145)DN(cid:146) and the local glass-making
subsidiary company of the group concerned), customers
were increasingly aware of the price differences between
the different Member States and sought
to minimise
them. In some cases customers succeeded in negotiating
a formula with Solvay which reduced the price variation
(e.g. the Belgian glassmakers Saint-Roch and Glaverbel).

5. SOLVAY’S TOTAL REQUIREMENTS CONTRACTS UP TO

1981

(44) Up to 1980, Solvay’s supply agreements for soda ash in
the different Member States were of long duration and
generally required the customer
total
requirements from Solvay.

to obtain its

(45) After Solvay’s supply agreements had been brought to
the attention of the Commission, extensive discussions
took place and Solvay eventually agreed to modify its
contractual
(cid:145)total
requirements(cid:146) clause with a clause which stipulated a
particular tonnage and reducing the period of notice for
terminating the agreement (in many cases five years) to
two years.

arrangements

replacing

the

by

(46)

(47)

total

The Commission however informed Solvay by letter that
the tonnages which the customer was
required to
purchase each year should not correspond or be close
soda ash.
to the customer’s
Further, while confirming that it was permissible for
Solvay to grant rebates and discounts off list price, the
Commission insisted that any rebates allowed by Solvay
a disguised method of
should neither
ensuring the
the abandoned (cid:145)total
requirements(cid:146) contracts nor operate as loyalty rebates.

constitute
continuance of

requirements of

Solvay informed the Commission at the end of 1980
that it was instructing its various (cid:145)DNs(cid:146) to amend their
supply agreements and attached a copy of a draft
circular letter to be sent to its various national sales
offices in which it stressed, in two places, that under no
circumstances should any price arrangement constitute
an inducement to ensure the (cid:145)loyalty(cid:146) of the customer.
The customer was also to be free to choose the
tonnages it wished to purchase, and the sales offices

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were expressly prohibited from attempting to discover
total
from the
requirements which the nominated tonnage represented.

the proportion of

customer

its

(48) On the basis of Solvay’s letter, the file was closed in
taken by the
in the present

action was
the investigations

1982 and no further
Commission until
proceedings.

6. ANTI-DUMPING PROTECTION

(49) A major plank of Solvay’s commercial policy in the
soda ash sector was to ensure the maintenance of the
anti-dumping measures in place against the American
producers of dense ash as well as the east European
in exchange
light ash suppliers. With the changes
parities since 1984, Solvay was well aware that
the
American producers could sell
in Europe at prices
substantially below the average Community prices
without being guilty of dumping:
their ex-works
price for exports was not below their domestic price.

i.e.

(50) A number of glass producers had been taking advantage
of a provision in the anti-dumping legislation which
permitted the glassmakers to avoid anti-dumping duties
on imported soda ash used in producing glass for
export outside the Community (inward processing).

(51)

(52)

extension of

anti-dumping duties

the American producers,

The anti-dumping duties on American imports were
under review at the time of the present proceedings and
Solvay was pressing hard for their renewal, as well as
the
to material
imported under inward processing arrangements. One
in particular General
of
Chemical (formerly known as Allied), was according to
European producers targeting France, a strategy that
affected only Solvay and Rh(cid:244)ne-Poulenc. There are,
however, indications in the records of a meeting of the
producers association, the European Chemical Industry
Council (CEFIC), that those two firms were to (cid:145)examine
the possibility of
an arrangement with General
Chemical(cid:146).

that

is significant

It
in the anti-dumping procedure
Solvay pressed for a new minimum price cleared at
tonne to be
Community border of ECU 163 per
imposed on dense ash from eastern Europe and the
United States of America (approximately ECU 170 to
180 delivered) while (as
in several
countries its own average delivered price was under
DEM 300 (ECU 150).

it well knew)

D. EXCLUSIONARY CONDUCT BY SOLVAY

1. SOLVAY’S COMMERCIAL STRATEGY SINCE 1982

(53)

In spite of the express terms of the Commission’s letter
and of Solvay’s internal circular, from 1983 onwards
Solvay made increasing use both of progressive rebates
and of supply contracts which effectively tied the major
customers to Solvay for the whole or virtually the
whole of their soda ash requirements. In the face of a
fall-off in demand (up to 1987), the main concern of
Solvay appears to have been to preserve its dominant
position in the European market against (cid:145)unrest(cid:146) from
smaller producers, as well as the perceived threat of
imports from eastern Europe and the United States. The
main measures taken by Solvay included:

(cid:145)improving
customers
relations with major
(glassmakers, chemicals industry) by bringing into
general use and strengthening our contracts policy,
with the aim of (cid:147)tying in(cid:148) customers (especially
Saint-Gobain which gets a group super-rebate of
1,5 % under
these
contracts are still relatively (cid:147)open(cid:148) owing to EEC
rules (maximum two years’ notice, contract tonnage
limited to around 85 % of customer’s needs to allow
customer the possibility of a second supplier).(cid:146)

contract)(cid:133) but

(cid:147)master(cid:148)

a

(54) A strategy

presentation

(undated

originating in about April 1988)
commercial and pricing policy:

but

probably
sets out Solvay’s

(cid:145)Solvay’s primary concern is to defend its major
commercial positions particularly in Europe (it
is
this market which pays well and is profitable).

This entails:

(cid:151) a policy of being present

for every customer

plus good market coverage (cid:133),

(cid:151) a policy favouring customers prepared to agree
to long-term commitments = contracts which
provide for significant discounts.(cid:146)

(55) Another

strategy paper dated April 1988 sets out

Solvay’s policy alternatives:

(cid:145)Defensive strategy consists, and will continue to
consist, in:

(cid:151) continuing to (cid:147)tie in(cid:148) customers with bigger and

bigger contractual discounts.(cid:146)

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2. SOLVAY’S REBATE SYSTEM IN GERMANY

(61)

(56)

Solvay’s declared policy on the important German
market was to preserve its overall market share at over
50 % by:

Solvay’s ex-works price for Germany was DEM 403 per
tonne. The average net price per tonne paid by large
customers in Germany in the late 1980s was around
DEM 340 to DEM 360 per tonne. What is not apparent
is that on the marginal tonnage the price per tonne
could go down to DEM 250 per tonne or even lower.

(cid:151) excluding all

imports from the United States of
America and preventing any further growth in
European
imports
producers,

from Akzo

Eastern

and

(cid:151) maintaining its

supplier
industry.

to the

(cid:145)dominant position(cid:146) as

soda ash
flat glass and container glass

(57)

Besides the usual quantity rebates on basic tonnage for
major customers, from 1982 onwards Solvay granted
two additional forms of rebate in Germany:

(cid:151) a rebate on marginal tonnage (called (cid:145)Spitzenrabatt(cid:146)),

almost invariably of 20 % off list price,

(cid:151) a special annual payment by cheque (up to DEM 3,4
million in one case) dependent upon the customer’s
from
obtaining most or all of
Solvay.

requirement

its

(58)

The cheque refund was already being given in late 1982
and the (cid:145)top-slice(cid:146) percentage was introduced in early
1983. The system was extended and refined after 1983
and formed the basis of Solvay’s price structure in
Commission’s
Germany. At
investigations in March 1989 virtually all
the major
customers of Solvay in Germany were receiving both
forms of inducement. The customers in question were
enjoined by Solvay to keep the rebates strictly secret
from third parties.

time

the

the

of

(59) Under the rebate system as applied to major customers,
the (cid:145)core(cid:146) tonnage, usually corresponding to about 80 %
of the customer’s total annual requirement, was invoiced
at list price with the usual quantity rebate (say 10 %).
For the marginal tonnage over and above the customer’s
basic requirement, a rebate of 20 % was given, and in
addition, a substantial cheque payment was made.

(60)

Thus for Vegla, a member of the Saint-Gobain group
and Solvay’s largest customer in Germany, the rebate
system operated as follows for 1989:

1. on the basic contractual tonnage of 85 000 tonnes,

a rebate of 10 %;

2.

the (cid:145)marginal(cid:146)

for
rebate of 20 %;

tonnage of 43 000 tonnes, a

3. a cheque attributable to the marginal tonnage of

DEM 3 349 000.

(62)

To take again the example of Vegla in 1989:

(cid:151) ex-works list price per tonne: DEM 403,

(cid:151) basic tonnage (10 % rebate): 85 000 tonnes,

(cid:151) marginal tonnage (20 % rebate): 43 400 tonnes,

(cid:151) discount price of last tranche (list price (cid:151) 20 %):

DEM 322,40,

(cid:151) special cheque payment: DEM 3 349 000 = DEM

77,16 per tonne,

(cid:151) net price per tonne for marginal

tonnage: DEM

245,24.

(63)

(64)

(65)

In each case where the special top-slice/cheque rebates
were given, Solvay was the sole or the principal supplier
of the customer. It is apparent from the documents that
in each case Solvay had an accurate idea of each
customer’s total requirements and was able to calculate
tonnage to
its price offer accordingly. The marginal
which
referable
corresponded to the tonnage which the customer might
otherwise have considered obtaining from a competing
supplier.

inducements were

financial

the

The effect of the rebate system was that a competitor
attempting to enter as second supplier by taking away
from Solvay part of the customer’s business (i.e. the
marginal tonnage) had to offer the customer a price for
that tonnage which was at least equal to, if not better
than, Solvay’s: in the example given above, DEM 245.
While the competitor had to offer this unprofitably low
price on all the tonnage offered, Solvay only had to do
so on the last
tranche. Thus although the marginal
quantity was being supplied at only DEM 245 per
tonne, the average price per tonne for Solvay across the
whole tonnage supplied was DEM 320.

To put it another way, if the competing supplier was to
hope to take marginal business from Solvay, he would
have to compensate the customer for the loss of the
foregone by not
financial
purchasing it from Solvay.
In the example given the
value of
is some DEM 6 850 000. The
second supplier would have to absorb the cost of

advantage which was

this benefit

15.1.2003

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Official Journal of the European Communities

L 10/17

granting this rebate on just over 43 000 tonnes while
Solvay could average the rebate over three times that
quantity.

strong defensive position (Vegla’s total requirements),
secured by a (cid:147)watertight(cid:148) rebate system(cid:146).

(66)

(67)

The customer thus had little incentive to seek a second
supplier given the favourable price offered by Solvay for
tonnage, and the second supplier had no
marginal
incentive
customer’s marginal
to quote
requirements given the unprofitable price he would
have to offer.

the

for

In most cases, such as that of Vegla, the rebate system
ensured that Solvay was secure in the position of
exclusive supplier. The rebate system also operated
however to ensure that where customers did have a
policy of splitting their business between two suppliers
the dominant share of Solvay was maintained. Flachglas,
Solvay’s second largest customer in Germany, divided its
business roughly 70:30 between Solvay and M & W.
From 1983 onwards, Solvay’s pricing conditions to
Flachglas involved an 8.5 % quantity rebate for tonnage
up to 70 000 tonnes, 20 % on any marginal tonnage,
and a cheque for DEM 500 000 to DEM 750 000. The
additional cheque rebate meant that the real price for
any marginal tonnage taken over 70 000 tonnes was
(depending on the quantity) as low as DEM 250 or
DEM 260 per tonne. It was extremely difficult for the
second supplier to break into Solvay’s (cid:145)core(cid:146) share of the
business, which (as Solvay’s own documents show) was
protected by the rebate (cid:145)barrier(cid:146). While the second
supplier might be able to match the invoiced price of
DEM 322,40 (list price (cid:151) 20 %) it was highly unlikely
that
the customer would risk losing the substantial
cheque payment, which was clearly dependent upon its
purchasing an appropriate tonnage from Solvay in
addition
tonnage.
basic
Documentation obtained from Matthes & Weber
confirms that it was impossible for that company to
make any inroads into Solvay’s share of the Flachglas
business.

contractual

the

to

(68)

Internal Solvay documents make it abundantly clear that
the objective of the rebate system in Germany was to
secure the loyalty of the customers to Solvay.

(69)

(DSW)

The particular case of Vegla is again instructive in this
long
connection. Vegla had an understanding of
to
duration with Deutsche Solvay Werke
purchase its total requirements from Solvay.
In late
1987, however, apparently under pressure from the
Saint-Gobain headquarters
in Paris, Vegla requested
Solvay to agree to its purchasing 15 000 tonnes from
the United States of America. DSW strongly opposed
the suggestion and made it clear to Solvay in Brussels
that the rebate system was intended to reinforce DSW’s
position as
If Vegla were
permitted to buy from the United States of America this
would constitute an (cid:145)unnecessary abandonment of our

sole supplier

to Vegla.

(70) Other DSW documents dating

from early 1988
emphasise that Vegla had to be made aware that the
(cid:145)preferential treatment(cid:146) accorded it by Solvay depended
upon its taking the whole of
its requirements from
DSW. In the event that Vegla did not do so, the cheque
rebate would be withdrawn. The documents also stress
the fact that Solvay’s two-step price system involved a
significant subsidy for marginal tonnages in order to
exclude competition. One note of 1 February 1988
makes the point particularly clear:

(cid:145)2. That the price policy to date, which was based
on the principle of a two-tier pricing structure,
gave a special subsidy to marginal tonnage and
thereby provided protection against competitors’
taking a corresponding part of the customer’s
requirements.

3. That

in consequence DSW must during the
further price negotiations for 1988 concentrate
all its efforts on securing the marginal tonnage
(perhaps by increasing the amount of
the
cheque), and in any case to be fully prepared to
cut off completely the benefits they currently
enjoy in the form of cheques if they do not buy
the marginal tonnage from us.(cid:146)

(71)

In the event
it was agreed that DSW would supply
Vegla with its total requirements for 1988 and 1989
(except for minor tonnages at one factory) with a rebate
of 20 % on purchases over 85 000 tonnes and a cheque
of DEM
including
1 500 000 as well as other discounts.

element

(cid:145)fidelity(cid:146)

express

an

3. SOLVAY’S REBATE SYSTEM IN FRANCE

(72)

In France Solvay applied a system of
marginal tonnage similar to that operated in Germany.

rebates on

(73)

The BSN group was Solvay’s largest customer in France
with an annual consumption of around 300 000 tonnes
per annum. Solvay was to all intents and purposes the
sole supplier of BSN in France. As with Saint-Gobain,
Solvay was particularly anxious to prevent BSN from
finding a second source of supply from among the
United States natural ash producers.

(74) At the end of 1987 an arrangement was made with
BSN for 1988 under which Solvay gave not only the
normal tonnage rebate of 8,5 % but also an extra rebate
on marginal tonnage. A case rebate of FRF 135 per
tonne was to be paid quarterly on offtake over 210 000
tonnes. The arrangement with BSN was extended for
one year on 11 January 1989.

L 10/18

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Official Journal of the European Communities

15.1.2003

(75) Durand (Cristalleries d’Arques) had an annual offtake of
50 000 tonnes to 60 000 tonnes. Up to 1987, Durand
received a rebate of 5 % for
tonnage over 50 000
tonnes. For 1988, the arrangement included not only
the 5 % rebate but also a supplementary rebate of FRF
100 per tonne on purchases over 48 000 tonnes. For
1989,
total
requirements of soda ash would be 68 000 tonnes to
70 000 tonnes, Solvay increased the rebate on tonnages
from 48 000 tonnes to 58 000 tonnes to FRF 140 per
tonne with FRF 175 on the top slice, i.e. anything over
58 000 tonnes.

that Durand’s

ascertained

having

(76)

(77)

(78)

Perrier consumed around 50 000 tonnes to 60 000
tonnes of soda ash per year, all purchased from Solvay.
Under its (cid:145)evergreen(cid:146) supply contract dating from 1981,
it was required to take 50 000 tonnes – 10 % from
Solvay. From 1987 onwards, Perrier received a basic
4 % tonnage rebate but if its offtake exceeded 55 000
tonnes, the rebate was increased to 4,75 % on the whole
of
to
the tonnage purchased. Thus if Perrier went
another supplier for marginal tonnage i.e. anything over
the second supplier would have to
55 000 tonnes,
compensate it
the additional 0,75 %
rebate on the whole of
the 55 000 tonnes already
purchased from Solvay.

for the loss of

The Perrier arrangement is the only example found of a
fidelity rebate where the customer actually lost a benefit
referable to the basic tonnage unless it also took the
marginal tonnage. The other top-slice rebates however
had a similar exclusionary effect as can be demonstrated
by the case of Durand.

In the face of Solvay’s additional rebate of FRF 175 per
tonne for tonnage above 58 000 tonnes, any second
supplier aiming to obtain the last 10 000 tonnes of the
Durand business would have to equal or better the
inducements offered by Solvay, i.e. the 5 % contractual
discount plus the extra FRF 175 rebate.

(79)

The effective price per tonne of the last 10 000-tonne
tranche from Solvay was as follows:

(cid:151) ex-works list price per

tonne

(cid:151) delivered price per tonne
(cid:151) less: 5 %
(cid:151) additional rebate
(cid:151) delivered price per tonne

FRF 1 125

FRF 1 223

(84)

FRF 56,25

FRF 175,00 FRF 231,25
FRF 991,75
(= FRF 893,75 ex-works)

A competitor wishing to supply the marginal 10 000
tonnes would however have had to offer a delivered
price of FRF 991,75 or better. The second supplier
would have had to compensate the customer
for
moving its business by offering an inducement of FRF
2 312 000 (10 000 (cid:215) FRF 231,25). On the assumption
that its ex-works list price was the same as Solvay’s (FRF
1 125), it would have had to absorb the whole FRF 2,5
million on business worth only FRF 11 250 000 at list
price, i.e. give an effective discount of over 20 %.

4. SAINT-GOBAIN

(81)

The Saint-Gobain group, which operated almost 30
glassworks across Europe (cid:151) in France, Germany, Italy,
Spain, Belgium and Portugal (cid:151) was Solvay’s largest
customer with purchases of over 550 000 tonnes of
soda ash in 1988.

(82)

Saint-Gobain produced both flat and container glass.
Out of its total consumption of soda ash in western
Europe of 822 000 tonnes (1988), Solvay supplied 68 %
(1987: 67 %).

(83)

Solvay supplied 100 % of Saint-Gobain’s requirements
in all important national markets outside France, where
it was in the position of second supplier, 75 % of
Saint-Gobain’s requirement in that Member State having
traditionally been supplied by Rhone-Poulenc. Prices and
other conditions were negotiated at a national
level
between the local Saint-Gobain subsidiary and the
Solvay (cid:145)DN(cid:146) in that country. In most cases the supply
agreement was to run indefinitely ((cid:145)evergreen(cid:146) contracts)
(In Italy however
with a notice period of two years.
there was no formal
France,
and
Saint-Gobain terminated the agreement by giving 24
months’ notice on 10 March 1987; new conditions
were being negotiated at the date of the Commission’s
investigations.)

contract

for

There were substantial price variations between the
different Member States but Saint-Gobain (to Solvay’s
evident dissatisfaction) used its presence in several
countries to exercise downward pressure on Solvay’s
differential pricing.

(80)

Solvay’s average delivered price per tonne if it supplied
the whole 58 000 tonnes was much higher: FRF 1 136.

(85) A secret Protocol was concluded in November 1982
to give expression to the
the
reciprocated

(effective 1 January 1983)
between
special
Saint-Gobain
based
(cid:145)most-favoured partner(cid:146) status.

relationship
group

Solvay
a

and

on

15.1.2003

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Official Journal of the European Communities

L 10/19

(86)

By clause 2 of the Protocol:

than

other

European markets

(cid:145)On
France
Saint-Gobain will continue to give priority to Solvay
for supplies of soda ash, for quantities of at least
400 000
on
Saint-Gobain’s glass production in 1981; in France
Saint-Gobain will progressively increase purchases
from Solvay to bring them to the level of 50 000 to
100 000 tonnes per year.(cid:146)

annum,

tonnes

based

per

(87)

In addition to provisions under which Saint-Gobain was
to receive the lowest prices offered by Solvay in each
country for comparable glass-making uses, clause 4
provided for a special group rebate on Saint-Gobain’s
purchases from Solvay:

Protocol
an

(cid:145)Under
this
Saint-Gobain
calculated
purchases from Solvay in Europe.(cid:146)

additional
Saint-Gobain’s

Solvay

on

further
of
soda

rebate
total

grants
1,5 %
ash

(88)

The Protocol also contained a (cid:145)competition clause(cid:146) under
which:

for

(cid:145)Competing offers received by Saint-Gobain at prices
below Solvay’s
long-term deliveries will be
examined by the parties together in their mutual
If a solution acceptable to both parties
interest.
cannot be agreed,
this Protocol will cease to be
valid. No account shall be taken of (cid:147)spot(cid:148) offers or
offers at (cid:147)dumping(cid:148) prices.(cid:146)

(89)

The
(cid:145)super group rebate(cid:146) granted to Saint-Gobain
amounted to some BEF 50 million to BEF 60 million
annually.

(90)

Internal documentation of Solvay leaves little doubt
this special arrangement with
about
Saint-Gobain:

the purpose of

(cid:145)(cid:151) It should be noted that the SG (cid:147)super group
rebate(cid:148) of 1,5 %, which helps to (cid:147)tie in(cid:148) the SG
group,
is not an (cid:147)absolute(cid:148) weapon (it being
difficult to increase the amount owing to EEC
In particular it requires SG to (cid:147)come
rules).
from
if
clean(cid:148)
competitors.(cid:146)

significant quantities

it buys

(91) DSW frankly

a

informed

representative

of
on two
Saint-Gobain’s German
occasions
between
protocol
Saint-Gobain and Solvay in Brussels was to all intents
and purposes an exclusivity agreement even if
for
obvious reasons the parties could not actually say so in

subsidiary Vegla
concluded

that

the

writing. The object of the agreement was said to be to
maintain the status quo, clearly a reference to Solvay’s
position as exclusive supplier. The only difference of
opinion between DSW and the Solvay headquarters as
to the interpretation of the agreement was that Solvay
taken the view that
in Brussels
Saint-Gobain was not precluded in principle from
making spot purchases.

to have

seems

5. EXCLUSIVITY ARRANGEMENTS IN GERMANY

(92) Quite

apart

secret

from the

(cid:145)Protocol(cid:146) with the
Saint-Gobain group, DSW also had a long-standing, if
(referred to as a (cid:145)gentleman’s
unofficial, arrangement
the German Saint-Gobain
agreement(cid:146)) with Vegla,
subsidiary, by which it was understood that
this
customer took all
its requirements of soda ash from
Solvay. With an eye presumably on the letter of the
Community competition rules, the Vegla agreement had
however been formally expressed as a (cid:145)tonnage(cid:146) contract.
Vegla,
large
in common with most of Solvay’s
in Germany, had an (cid:145)evergreen(cid:146) contract
customers
dating from 1981,
i.e. one of undetermined duration
subject to termination on 24 months’ notice. The exact
quantities were the subject of annual negotiation.

(93) When a Vegla representative reminded DSW that the
Commission had in 1981 required Solvay to amend its
exclusive supply agreements, DSW’s reaction was:

(cid:145)But we (cid:151) Vegla and DSW (cid:151) have always worked
on the understanding that the agreement related to
the total
(except
Bergisch-Gladbach).(cid:146)

requirements of

the factories

(94)

the

The exclusivity arrangements seem to date back to the
time when
concluded with
Protocol was
Saint-Gobain and when Vegla (according to one DSW
It is apparent
document) gave a promise of (cid:145)loyalty(cid:146).
from the documents discovered at DSW that
the
top-slice rebates and other benefits were dependent
upon Vegla obtaining all its requirements from Solvay.

(95)

There are also strong indications that DSW had told
Vegla at one time that unless it purchased its total
consumption from Solvay, all supplies would be cut off:
a Solvay note of a meeting in Paris with senior officials
of Saint-Gobain reads:

that,

[(cid:133)] points out

according to SG/D
(cid:145)He
[Saint-Gobain Germany] DSW has
imposed an
unacceptable condition: SG/D to buy 100 % of
requirements from DSW or DSW will not supply
SG/D at all!(cid:146)

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Official Journal of the European Communities

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(96)

(97)

(98)

(99)

In the margin of the note is written (cid:145)so plump wurde
das nicht gesagt(cid:146) ((cid:145)It was not put as bluntly as that(cid:146)): the
implication, however,
is that, whatever was said, the
meaning was the same.

the (cid:145)special conditions(cid:146)

In at least one other case a major customer in Germany
(Oberlandglas) was told in unambiguous terms by DSW
that
(20 % top-slice rebate,
cheque for DEM 1 million) depended upon its taking
its requirements from Solvay from 1987
100 % of
onwards. Oberlandglas has
total
always
requirements from Solvay.

taken its

6. EXCLUSIVITY ARRANGEMENTS IN FRANCE

In addition to the fidelity rebates given to several major
customers in France, the tie of exclusivity with Solvay
was reinforced by the device of concluding long-term
delivery agreements which, although formulated as
in fact stipulated for a tonnage
(cid:145)tonnage(cid:146) contracts,
which corresponded closely with the customer’s total
requirements. The Commission had warned Solvay
against such a practice in December 1980.

The (cid:145)evergreen(cid:146) supply contract with BSN which dated
from 18 June 1981 required BSN to purchase from
Solvay annually a quantity of 300 000 tonnes – 15 %
for its glass factories in France. BSN’s total soda ash
requirement from 1982 to 1984 was in reality some
300 000 tonnes, falling from 1985 onwards to around
270 000 tonnes
to 280 000 tonnes annually. The
minimum tonnage which BSN was obliged to purchase
from Solvay under the terms of the 1981 agreement
was 265 000 tonnes, a tonnage which was not far short
of its total requirements. The contract was of indefinite
duration and continued for a period of two years after
notice of
the
virtually exclusive supplier of soda ash to BSN from
1982 onwards, supplying each year some 98 % of its
requirements.

termination either

side. Solvay was

close

to its

(100) The supply contracts with a number of other major
glassmaking customers in France (cid:151) for example Perrier,
Verrerie d’Albi (cid:151) also required the customer to take a
tonnage
requirements: Perrier:
actual
tonnage 50 000 tonnes – 10 %; annual
contractual
requirements after 1982, – 55 000 tonnes, all supplied
by Solvay. Verrerie d’Albi: contractual tonnage 25 000
tonnes – 5 000 tonnes; annual requirements after 1982,
20 000 tonnes to 25 000 tonnes, all supplied by Solvay.
Again both these contracts required two years’ notice of
termination.

7. THE BELGIAN GLASSMAKER CONTRACTS

(101) Another example of (cid:145)tonnage(cid:146) contracts for what was
close to the customer’s estimated total requirement is

provided by the contracts concluded between Solvay
and the three major Belgian glass producers Saint-Roch
(Saint-Gobain group), Glaverbel
and Verlipack. As
Solvay stated in an internal note of 11 February 1986
the Belgian price was effectively determined by the price
to these three customers. Up to 1978 these customers
had always purchased almost all of their requirements
from Solvay.
the Belgian
Government
the three glass
producers from entering into a contract with FMC to
purchase substantial quantities of soda ash from the
United States of America.

intervened to prevent

In January of

that year

required to purchase

(102) On 7 February 1978 agreements were signed between
the Belgian glassmakers and Solvay under which they
were
their
requirements from Solvay for a period of five years. The
Commission insisted in the course of the discussions
with Solvay between 1980 and 1981 that
these
contracts would also have to be modified.

totality of

the

(103) New agreements were

three
glassmakers, effective from 1 January 1983, providing
for the customer to take a specified tonnage – 15 %.
The tonnages stipulated were:

concluded with the

St. Roch:

Glaverbel:

Verlipack:

75 000

– 15 %

85 000

– 15 %

70 000

– 15 %.

(Since the failure of Verlipack and its restructuring in
1985 its annual consumption fell by half and it
purchased under an annual contract.) The agreements
were to be of an unspecified duration subject
to
termination at 24 months’ notice. Before 1 November
of each year, the customer had to inform Solvay of the
tonnages which it intended to take during the following
year; there were also special provisions dealing with the
eventuality of the customer taking more or less than the
contractual tonnage.

(104)

tonnages were a
the basic contractual
In practice,
reasonably close approximation of
the total annual
consumption of the customers at the time. From 1983
onwards the three customers in fact took virtually all of
their requirements from Solvay (8). An exception was
imported by
the 7 800 tonnes
Saint-Roch in early 1988 under
inward processing
arrangements. This business was the subject of intensive
negotiations between Solvay and Saint-Gobain and was
regained by Solvay for 1989.

to 8 000 tonnes

(8) Glaverbel (to Solvay’s knowledge) had to purchase some 10 000
tonnes per annum from East Germany to offset its exports of glass
to that country. Apart from this tonnage it was supplied only by
Solvay.

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Official Journal of the European Communities

L 10/21

(105)

It is clear that, whatever the formal instructions given
by Solvay in its letter of 19 February 1981 to the (cid:145)DN(cid:146),
in the case of Saint-Roch at least, detailed
there was,
discussion with the
exact
tonnage of
followed by a
total
to secure the customer’s express
successful attempt
agreement
to 8 000 tonnes the volume
which would be acquired in 1988 from competing
suppliers and (b)
to Solvay completely for
1989.

customer
requirements,

regarding the

to revert

to limit

(a)

its

the tie between the customer and Solvay and made it
difficult or impossible for a competitor to take business
from Solvay.

(a) Competition clauses

8. OTHER EXCLUSIVITY ARRANGEMENTS IN BELGIUM

(106) A number of contracts with smaller customers also
contained clauses designed to secure the customer’s tie
to Solvay.

customers

contained variants of

(112) A considerable number of Solvay’s (cid:145)evergreen(cid:146) contracts
with major
the
(cid:145)competition clause(cid:146) or (cid:145)English clause(cid:146) (see Case 85/76
Hoffmann-La Roche v Commission, paragraphs 102 to
108 (9)). These clauses provided for machinery by which
competing offers received during the contract term were
to be notified to Solvay so that it could, if it so wished,
adjust its prices accordingly. The competition clauses are
found in a number of different forms.

(107) Durobur of Soignies had from 1983 onwards a series of
annual or biennial delivery contracts with Solvay with
an annual offtake of some 5 000 tonnes to 5 500
tonnes.

(113)

(108) The contracts made on each occasion contained a clause
which effectively ensured that Durobur did not change
to another supplier at the end of the contractual period.
The agreements provided that Solvay and Durobur
would meet at the end of the period to negotiate the
conditions of the next contract, and then stipulated:

In Germany the supply agreements (most of which
required 24 months’ notice of termination) stipulated
that the customer had to take a minimum tonnage from
Solvay, the exact quantities having to be specified at the
beginning of
thus
contractually bound to Solvay for a specified minimum
tonnage over a long period: this tonnage could in fact
correspond to the customer’s total requirements (see, for
example, Vegla, Oberlandglas).

each year. The

customer was

(cid:145)Before these negotiations take place Durobur will
not make any purchase commitment for soda ash
supplies for (the following year).(cid:146)

(114) The majority of

the supply contracts contained a

competition clause in the following (or similar) terms:

(109) Similar provisions appeared in the Solvay contract with
to

Pittsburg Corning (approximately 4 500 tonnes
6 000 tonnes per year).

(cid:145)Competition clause

(110) There is also one example at least where the agreements
provided for a total requirements clause and a special
fidelity rebate. From mid-1985 the agreements with
Owens Corning (5 000 tonnes per year) provided
expressly for an (cid:145)exceptional(cid:146) rebate based on a total
requirements contract:

(cid:145)In the context of a deal covering your
total
requirements, estimated at around 2 500 tonnes in
the second half of
the year, we grant you an
exceptional rebate of BEF 150 per tonne on the
tonnage supplied.(cid:146)

9. COMPETITION CLAUSES

(111) A number of

contained
supply
particular forms of (cid:145)competition clause(cid:146) which reinforced

agreements

the

and on comparable

If X is able to prove through a certified accountant
that
it received an offer for soda from another
supplier during the term of this contract at a better
the product
price
originating in a
free market
economy, and DSW does not match that price
within four weeks, X shall be free to purchase soda
from that supplier. DSW may in such a case cancel
the contract with immediate effect.(cid:146)

terms,
country with a

(115) While in theory this clause allowed the customer to
its annual requirements from another
obtain part of
it gave Solvay the option in such a
(cheaper) source,
case of
forthwith and
refusing all further supplies. In only a very few cases
(for example, Granus) did the agreement allow the
customer to set off purchases from the competitor
against its contractual obligations vis-(cid:224)-vis Solvay.

terminating the

agreement

(9) [1979] ECR 461.

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(116) The utility of this form of (cid:145)competition clause(cid:146) was that
it informed Solvay of the exact price of any competing
material and allowed it to decide for itself whether or
not it would meet the offer. On the other hand it was
highly unlikely that the customer would risk its security
of supply by purchasing even a limited quantity from
this would give Solvay the
the
since
competitor
opportunity to cancel
the (cid:145)evergreen agreement(cid:146) and
refuse all further supplies.

(117)

In the case of Vegla the standard provision giving
Solvay the right to cancel the whole agreement in the
event of purchases from a competitor was deleted from
the (cid:145)competition clause(cid:146). In practice the understanding
between DSW and Vegla was that the customer would
take all its requirements from Solvay.

(118) Thus when in 1983 Vegla informed Solvay of a
competing offer and asked whether it could purchase,
Solvay refused. The real purpose of the (cid:145)competition
clause(cid:146) is made apparent by DSW’s noting, with some
satisfaction,
it had been informed by this large
customer of the details of the competing offer.

that

(119) A draconian form of (cid:145)competition clause(cid:146) is found in the
the
contract with Verrerie
competition clause in the Albi contract
(Article 4)
allowed Solvay the option of terminating the contract
on receiving notice of a competing offer even if the
customer did not actually commit itself to buying from
the competitor.

d’Albi. As

drafted,

(120) The Saint-Gobain (cid:145)Protocol(cid:146) provided for

in order

a
and Saint-Gobain of

joint
any
examination by Solvay
competing offer
to arrive at a solution
acceptable to both. In this case, there was not even the
limited concession to (cid:145)anonymity(cid:146) which was contained
in the German agreements. The provision allowed
Solvay to be completely informed of the details of the
commercial conduct of
its competitors and potential
competitors so that it could, if it considered it necessary,
in prices and
negotiate with Saint-Gobain changes
conditions which would maintain the relationship of
reciprocal exclusivity. As Solvay itself observed,
the
main purpose of the whole arrangement was to oblige
it bought significant
Saint-Gobain to (cid:145)come clean(cid:146)
quantities from a competitor.

if

(121) The concrete examples of the proposed purchase by
Vegla of 15 000 tonnes of American soda and by
Saint-Roch of 8 000 tonnes in 1988 show exactly how
Solvay was able either
the competitors
entering at all or to restrict the quantity purchased.

to prevent

(122) The amendments made on 30 December 1983 to the
BSN supply agreement required the customer to advise
Solvay of competing offers (although the identity of the
competitor was not to be disclosed) so that the parties
could (cid:145)concert(cid:146) in order to find a solution ((cid:145)The parties
would then concert as quickly as possible (not more
than six months) in order to find a solution.(cid:146)) Like the
Saint-Gobain clause,
this mechanism gave Solvay the
option of adapting its price and conditions with perfect
(apart
knowledge of
from the
It was extremely likely in
identity of
practice that the operation of the clause would enable
Solvay to maintain its effective exclusivity with the
customer.

the competing offer

the supplier).

(b) Safeguard clauses

(123) A number of supply contracts which clearly envisaged
the maintenance of long-term relations between Solvay
and the customer (e.g. Glaverbel, Perrier) provided for a
concertation procedure in case of a change in economic
circumstances,
in particular if competing offers were
more advantageous than those of Solvay. While such
provisions may not be objectionable (cid:145)per se(cid:146),
in the
context of the present case, it is clear that Solvay was
particularly
competing
supplier from entering the market. While the safeguard
clauses allowed the customer the opportunity to use
competing offers to bring down Solvay’s price, it was
unlikely that the competitor would ever actually succeed
in obtaining (or if he did, retaining) a share of
the
business.

concerned to prevent

any

PART II

LEGAL ASSESSMENT

A. ARTICLE 82 OF THE TREATY

1. THE TERMS OF ARTICLE 82

(124) Under Article 82,

any

abuse by one or more
a dominant position within the
undertakings of
common market or in a substantial part
is
prohibited as incompatible with the common market in
so far as it may affect trade between Member States.
Special rebates or other financial inducements granted
to customers by dominant undertakings in order to
secure the whole or a substantial part of their business
may be prohibited by Article 82 as an exclusionary
practice.

thereof

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(125)

In the present case, the essential questions to be decided
are:

(cid:151) whether Solvay held a dominant position within the

meaning of Article 82,

(cid:151) whether the alleged conduct constituted an abuse of

such a dominant position,

(cid:151) whether there was an appreciable effect upon trade

between Member States.

2. DOMINANT POSITION

(a) Definition

it

effective

to prevent

(126) The term (cid:145)dominant position(cid:146) is not defined in Article
82. The Court of
Justice has however described a
dominant position under that Article as (cid:145)a position of
economic strength enjoyed by an undertaking which
enables
competition being
maintained on the relevant market by affording it the
power to behave to an appreciable extent independently
of
its customers and ultimately of
consumers. Such a position does not preclude some
competition but enables the undertaking which profits
by it, if not to determine, at least to have an appreciable
influence on the conditions under which competition
will develop, and in any case to act largely in disregard
of it so long as such conduct does not operate to its
detriment(cid:146) (judgment in Case 85/76 Hoffmann-La Roche
v Commission, paragraphs 38 and 39).

its competitors,

(127)

(cid:145)Dominance(cid:146) is therefore the power to hinder effective
competition. Such power may involve the ability to
eliminate or seriously weaken existing competition or to
prevent potential competitors from entering the market.
the existence of a dominant
As
the producer
position does not however
enjoying it
eliminated all possibility of
competition (see also Case 27/76 (cid:145)United Brands v
Commission(cid:146), paragraph 113 (10)).

the Court

to have

require

stated,

(128) The existence of a dominant position may depend upon
factors, where no single one is

a combination of
necessarily decisive.

(b) The relevant market

the area of business in which conditions of competition
the allegedly dominant
and the market power of
undertaking fall to be assessed. This examination enables
the Commission to identify the actual and potential
competitors of the undertaking in question and other
its
constraints which may exist on the exercise of
supposed market power. Account has to be taken of the
nature of the abuse which is being alleged and of the
particular manner in which competition is impaired in
the case in question: see judgment in Case 22/78 Hugin
v Commission (11)).

(130)

In the present case,
the particular abuses which are
suspected concern the foreclosure by Solvay of actual
and potential competition from other suppliers of soda
ash.

(131) Solvay produces both light

soda

and dense

ash.
Glassmakers almost all consume dense ash, while for
chemical and metallurgical applications light ash is the
preferred form. Although the competition which Solvay
was aiming to exclude related principally to dense ash,
it would be artificial
to draw a strict boundary line
between light and dense ash.

(132)

Solvay’s

a number of

In Germany
glassmaking
customers purchased both dense and light ash (Schott,
Ruhrglass) while others purchased entirely or almost
entirely light ash (Gerresheimer, Woellner). The fidelity
rebate system was applied to both forms. From the
geographic standpoint,
it is true that the Community
market was still to a large extent divided along national
lines. However, while there were price differences
between the different national markets, the Community
could be divided for purposes of competitive analysis
into two broad zones or (cid:145)spheres of
influence(cid:146), one
the other by ICI. Solvay’s
dominated by Solvay,
the
traditional market area covered the whole of
Community with the exception of the United Kingdom
and Ireland, where because of
their anti-competitive
arrangements entirely different competitive conditions
prevailed.

(133) While there was no other producer which like Solvay
sold in all the countries of continental western Europe,
increased their export
CFK, M & W and Akzo all
operations after 1982 and there was no overwhelming
reason why they should not make their product
available throughout
the Community. Similarly the
American producers of natural ash, which Solvay
regarded as probably the major competitive threat, were
aiming to market the product throughout continental
western Europe.

(129)

In order to determine whether an undertaking holds a
dominant position, it is necessary first of all to identify

(134)

is also significant

It
supplied a
particular market as occasion demanded from a plant in

that Solvay itself

(10) [1978] ECR 207.

(11) [1979] ECR 1869.

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a different Member State and a large proportion of
(cid:145)Solvay
reported interState trade thus consisted of
balancing(cid:146).

(vii)

improbability of

the
any new producer of
synthetic ash entering the market and setting up
manufacturing facilities in the Community;

(135) From the demand side, the larger customers operated in
several Member States and, as Solvay itself observed,
their spread of operations had tended to increase the
pressure for price equalisation.

(136) The appropriate product and geographic area in which
Solvay’s economic power falls to be assessed is thus the
market for soda ash in the Community (excluding the
United Kingdom and Ireland).

(c) Market power

(viii) the protection against non-Community producers

afforded by the anti-dumping duties;

(ix)

Solvay’s traditional role of price leader;

(x)

the perception of Solvay by other Community
producers as the dominant producer and their
reluctance to compete aggressively for Solvay’s
traditional customers.

over

the whole

(137) Solvay’s own documentation recognises that it held a
Its historic
dominant position in western Europe.
market share of some 70 % in continental western
Europe
under
consideration is in itself indicative of a significant degree
of market power. Market share, while important, is only
one of the indicators from which the existence of a
dominant position may be inferred. Its significance may
vary from case to case according to the characteristics
of the relevant market.

period

the

of

(138) To assess market power for the purposes of the present
case, the Commission took into account all the relevant
economic evidence, including the following elements:

(i)

(ii)

Solvay’s position as the only soda ash producer
operating throughout
the Community (with the
exception of the United Kingdom and Ireland);

Solvay’s manufacturing strength, with plants in
Belgium,
Spain and
Portugal;

France, Germany,

Italy,

(iii)

Solvay’s upstream integration in raw materials as
the largest producer of salt in the Community;

(iv)

(v)

the absence of any competition from ICI, the only
other Community producer of comparable market
strength to Solvay;

Solvay’s high market
in the Benelux
countries, France and Germany and its monopoly
or near-monopoly position in Italy, Spain and
Portugal;

share

(vi)

Solvay’s excellent market coverage as the exclusive
or near-exclusive supplier to almost all the major
customers in the Community;

(139)

In assessing the extent of Solvay’s market power, the
Commission took account of the possible substitutability
of caustic soda for soda ash. Caustic soda (sodium
hydroxide) is largely used for the production of paper
and aluminium and may also in theory replace soda ash
for certain manufacturing applications as a source of
alkali particularly in the manufacture of detergents and
in metallurgical processes. (NB: The reverse is also true:
soda ash is in theory also an alternative for caustic soda
in some processes.)
In practice however the possible
a
availability of
substantial limitation on Solvay’s market power in the
Community, which is principally based on supply to
glass manufacturers, few if any of which were prepared
to substitute caustic soda for soda ash.

soda did not

constitute

caustic

(140) Caustic soda is a co-product of

the manufacture of
chlorine, a basic raw material
in the manufacture of
PVC. Since long-term storage is not feasible, production
of chlorine is tailored to current PVC demand. The
supply of caustic soda inevitably fluctuates in line with
that of chlorine. Demand for caustic soda on the other
hand depends largely on the requirements of the paper
industry. The price of caustic soda is therefore, unlike
soda ash, subject to considerable fluctuation.

i.e.

(141) During the period under consideration caustic soda was
the growth in demand for caustic soda
(cid:145)short(cid:146),
exceeded that for chlorine: the product was in short
supply and was likely to remain so for the foreseeable
future. It was also considerably more expensive than the
equivalent in soda ash. There was thus no incentive for
to switch to caustic soda. Further,
soda ash users
conversion from soda
a
substantial capital
investment. Even if caustic soda is
(cid:145)long(cid:146) at a particular time the cyclical nature of the alkali
market and uncertainty as to future pricing acts as a
deterrent to switching.

ash to caustic

requires

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L 10/25

(142)

(143)

In the glass sector, the main consumer of soda ash,
accounting for two-thirds of Solvay’s sales in the period
under consideration, caustic soda substitution is even
detergent
than
and
in metallurgical
less
likely
applications.
the alkali
In theory up to 15 % of
requirement of glassmakers may be provided by caustic
soda. Again, capital investment in plant modification is
required. In practice, by 1990 only one glassmaker had
ever converted to caustic soda.

should also be noted that

soda ash
the major
It
producers
ICI, Akzo) between them made
around one third of the caustic soda produced in the
Community.

(Solvay,

(144) Solvay has also argued that

the availability of cullet
(recycled broken glass) excluded its having a dominant
position. A customer’s requirements of soda ash in
container glass manufacture can be reduced by up to
15 % by using cullet and with appropriate technology
the proportion may be higher. It may well be that the
use of cullet reduces the dependence of customers upon
soda ash suppliers generally.
It does not, however,
reduce the ability of a powerful soda ash producer to
exclude smaller producers of that product.

(145) The possibilities of substitution did not therefore act as
a significant constraint on the exercise of Solvay’s
market power vis-(cid:224)-vis the other producers of soda ash.

(146) The Commission assessed Solvay’s market power in
relation to the whole of
the geographic area within
which it operated, which in the present case consisted
those Member States in which it had production
of
facilities. Solvay’s own internal documentation shows
that it tended to consider the nine (cid:145)directions nationales(cid:146)
as
(This market
delineation included two non-member countries, namely
Switzerland and Austria, and excluded the United
Kingdom and Ireland, which were traditional
(cid:145)ICI(cid:146)
markets,
and Denmark and Greece, which were
(cid:145)non-producer(cid:146) markets.)

forming a homogeneous market.

(147) However,

even if

each of

the national markets
particularly concerned by Solvay’s exclusionary conduct
were considered as a separate market, Solvay was still
dominant in each one, and most of the considerations
set out above apply equally.

(148) On the

the

basis of

the
the period
consideration Solvay occupied a dominant

Commission concludes
under
position within the meaning of Article 82.

considerations

throughout

above

that

3. ABUSE OF DOMINANT POSITION

(a) Exclusionary practices and fidelity rebates

(149) As the Court of Justice has observed in several cases,
conduct by a dominant undertaking which undermines
the objectives of Article 3(g) of the EC Treaty (formerly
Article 3(f) of
the EEC Treaty) by endangering the
structure of competition may constitute an infringement
of Article 82. Exclusionary behaviour which hinders
the development of new
existing competition or
competition has been condemned by
the Court.
Practices designed to block the access of competitors to
customers by tying the latter to the dominant supplier
have been identified as abusive in the following leading
cases in particular: Joined Cases 40 to 48, 50, 54 to 56,
others v
111, 113 and 114/73 Suiker Unie
Commission (12), Case 85/76 Hoffmann-La Roche
v
Commission, and Case 322/81 Nederlandsche Banden
Industrie Michelin v Commission (13) (see also Commission
Decision 89/22/EEC British Gypsum/BPB Industries (14).

and

(150) The present case primarily concerns

the tying of
customers to Solvay by means of a number of devices
which all served the same exclusionary purpose.

(i) Rebates on marginal tonnage

(151) The assessment under

this heading relates

to the

following:

(cid:151) the 20 % (cid:145)Spitzenrabatt(cid:146) system in Germany,

(cid:151) the giving of (cid:145)fidelity(cid:146) cheques in Germany,

(cid:151) rebates on marginal

tonnage

in France

(BSN,

Durand, Vergeze, Hoechst).

(152)

In contrast to a quantity discount, which is linked solely
to the volume of purchases from the manufacturer
concerned, a fidelity rebate involves offering customers
financial advantages in order to prevent
them from
obtaining their supplies from competing producers and
when practised by a dominant undertaking may fall
under Article 82.

(12) [1975] ECR 1663.
(13) [1983] ECR 3465.
(14) OJ L 10, 13.1.1989, p. 50.

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(153) There is no need,

the

customer obtain its

in order for fidelity rebates to fall
under Article 82, for a contractual obligation or express
supplies
stipulation that
exclusively from the dominant undertaking. What
is
important is that the terms of sale of the dominant
supplier make it financially attractive for the customer
to take its supplies exclusively or mainly from it. The
precise means by which this result
is achieved are
immaterial.

(154) From 1982 onwards Solvay adopted a system of
progressive rebates which according to its own internal
documentation was specifically intended to ensure the
limit
loyalty
competition:

customer

exclude

and

the

or

of

(cid:151) granting customers substantial financial inducements
to obtain from Solvay all or the major part of the
marginal tonnage which might otherwise have been
obtained from a competitor,

tonnage,

(cid:151) making it difficult or impossible for an existing or
potential supplier to enter as second supplier for the
marginal
to match the
substantial pecuniary advantages offered by Solvay
and obtain the order for the top (cid:145)slice(cid:146) of business,
they would have to sell at unprofitable or at
(cid:145)dumping prices(cid:146),

since in order

(cid:151) tying the customer to Solvay for an indefinite period
and thereby contributing to the rigidity of
the
market,

(cid:151) removing any interest on the part of the customer
to canvass Solvay’s competitors for some of
its
requirements.

(155) As an example, any supplier attempting to obtain a
share of the business of Vegla in Germany would have
had to match an effective ex-works price per tonne for
the top 40 000 tonnes of DEM 245 per
tonne,
compared with a (cid:145)list price(cid:146) of DEM 403 per tonne and
an (cid:145)average(cid:146) price in Germany of DEM 360 per tonne.

(156) The price of DEM 245 was far below any economic
price which the other Community producers could have
offered. Any natural ash producer selling at that price
would have been in breach of
the anti-dumping
minimum price undertakings.

(157) The ability of a second supplier to displace Solvay for a
part of the business of a major customer was rendered
even more difficult by the obligation of secrecy with
regard to the percentage
cheque
payment.

and the

rebate

(158) The Commission’s objections to the rebate system apply
not only to cases where Solvay had complete exclusivity
but also to those where it was the principal, but not the
sole, supplier.
In such cases the progressive rebates
contributed to the maintenance of Solvay’s overall
the
dominant position by
customer’s business. The rigidity of
the market was
preserved since it was extremely difficult for any second
supplier to break into Solvay’s (cid:145)core(cid:146) business.

securing its

share of

(159) Solvay claimed in its written observations in reply to
the statement of objections that the rebates were not
simply
intended as an inducement
represented a form of volume rebate which depended
upon the
and
predetermined tonnage threshold. Such an argument
wholly ignores the character attributed to the rebates in
Solvay’s own documents.

to loyalty but

an objective

customers

reaching

(160)

It is also clear that the various rebates and financial
advantages which they conferred were not related to
any cost savings associated with the quantities delivered.
There were substantial differences
from country to
country in the amount of the rebates, and inside each
Member State the (cid:145)trigger(cid:146) tonnage at which the top-slice
rebate was activated varied from customer to customer
according to its total offtake. For instance, in Germany
the 20 % rebate was activated for PLM at 3 000 tonnes
and for Vegla at 85 000 tonnes.

(ii) The Saint-Gobain group rebate

(161) The secret Saint-Gobain (cid:145)Protocol(cid:146) was

intended to
confirm Solvay in the position of Saint-Gobain’s
exclusive or near-exclusive supplier in western Europe
apart from France. As DSW itself said, it was designed
to maintain the status quo but the parties were reluctant
to say so in writing.

in

(cid:145)best

each

country

conditions(cid:146)

(162) The provision by which Saint-Gobain benefited from
Solvay’s
for
comparable usages was not necessarily anti-competitive
on its own. However in addition to this stipulation
Saint-Gobain received a (cid:145)group rebate(cid:146) of 1,5 % on the
whole of its purchases across Europe. It was implicit in
the agreement
that payment was dependent upon
Saint-Gobain continuing to give Solvay (cid:145)priority(cid:146) as its
supplier. Solvay in its own documentation recognises
this rebate, although not an (cid:145)absolute weapon(cid:146),
that
contributed to ensuring the loyalty of the group. The
remark that (cid:145)it requires SG to (cid:147)come clean(cid:148) if it buys
significant quantities
from competitors(cid:146) demonstrates
also that Solvay had to be satisfied that it had been
given (cid:145)priority(cid:146).

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(163) Solvay claimed that

the Saint-Gobain rebate did no
savings attributable to
the cost
more than reflect
Saint-Gobain’s position as
in
Europe. The argument overlooks the fact that at Solvay’s
insistence the individual Saint-Gobain subsidiaries were
supplied by the national Solvay subsidiaries in each
Member State and not on any global basis.

the largest customer

(164)

is also clear from the documents that

It
the whole
purpose of the Saint-Gobain rebate was to secure the
loyalty of the group in Member States other than France
and thus exclude competitors.

(165) The assessment of

in the
Saint-Gobain protocol in the light of Article 82 is set
out in recitals 177 to 180.

the (cid:145)competition clause(cid:146)

(iii) Exclusivity agreements

(166) This part of the assessment applies in particular to:

(cid:151) Vegla

(cid:151) Oberland

(cid:151) Owens Corning

(cid:151) BSN

(cid:151) Saint Roch

(cid:151) Verreries d’Albi

(cid:151) Perrier

(cid:151) Glaverbel

(cid:151) Verlipack.

(167) Solvay was informed by the Commission in 1981 that it
had to abandon the system of
requirements
contracts. It was also informed that any new tonnage
in fact stipulate for a quantity
contracts should not
which
total
corresponded
requirements.

customer’s

total

the

to

(168)

In a number of cases however it is apparent that:

(cid:151) even if the supply agreement was expressed in the
form of a (cid:145)tonnage(cid:146) contract, the clear understanding
was that the customer was to obtain all or nearly all
of its requirement from Solvay,

or

(cid:151) the

stipulated

tonnage

corresponded

to

the

customer’s total requirements,

or

(cid:151) the customer was informed that the payment of any
rebate was dependent upon its taking 100 % from
Solvay.

(169)

(170)

(171)

if unofficial, understanding that

In the case of Vegla, apart from the various financial
inducements (20 % (cid:145)Spitzenrabatt(cid:146), fidelity cheque) there
the
was a clear,
customer would take its total requirement from Solvay.
Similarly, Oberlandglas was informed that the (cid:145)special
conditions(cid:146)
total
upon
requirements from DSW. In the case of Owens Corning
in Belgium the agreement made the BEF 150 rebate
dependent upon its committing its total requirements to
Solvay.

depended

taking

its

its

In some cases (Vegla, Oberlandglas, Owens Corning),
the express understanding was that the customer would
obtain all
from Solvay. Any such
arrangement was clearly intended to bind the customer
to Solvay for its total requirement and constituted an
exclusionary practice under Article 82.

requirements

its

In the other cases, the contractual tonnage stipulated in
the main (cid:145)evergreen(cid:146) contract (which required two years’
notice of termination) corresponded to the customer’s
total anticipated requirements but allowed for a margin
(usually 15 %) up or down. The customer indicated to
Solvay at the beginning of each year what its exact
requirements would be within that range.

(172) The

does

Commission

the
exclusionary effect of these agreements, based as they
were on the maintenance of a long-term commercial
relationship, was alleviated by the tolerance margin.

consider

that

not

(173)

In the first place, even if the customer did consider a
second source, it was still contractually bound to Solvay
for a very large proportion of its requirements so long
as the (cid:145)evergreen(cid:146) contract was in operation. In the case
the Belgian glassmakers there was even a clause
of
providing that
the forecast offtake in one year
exceeded the maximum provided in the basic contract
of 1 January 1983 (i.e. X tonnes + 15 %),
the basic
to be revised upward. The
contract
purpose of
to ensure that Solvay
remained the preponderant supplier.

the clause was

tonnage was

if

(174) Secondly, it is clear that Solvay made it its business to
obtain full details of any competing offers and any
intention on the part of the customer to look for other

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informed as

sources of supply (e.g. Saint-Gobain’s American imports
in 1988). In many cases it is also shown that Solvay
was
annual
requirements. It could thus, with full knowledge of the
relevant details of the offer (price, tonnage, etc.) and the
requirements, ensure
customer’s intentions and total
that the competitive effect was limited or even removed.

customer’s

to the

total

of competitors’ activity while effectively excluding the
the competitor actually obtaining any
possibility of
business. (cid:145)Competition clauses(cid:146) which give the dominant
supplier the option of terminating the whole agreement
if the customer obtains even a small part of its supplies
to
from a
already
competition:
is extremely unlikely to
jeopardise its security of supply in such circumstances.

are
the customer

competitor

deterrent

a

(175)

It may well be that
in some cases a customer was
content (cid:151) for the time being at least (cid:151) to purchase all
its requirements from Solvay. The Commission fully
recognises the freedom of customers to obtain all their
requirements from one supplier if they wish to do so.
They should not however be obliged to do so.

(179) All the above measures as set out in recitals 149 to 178
were designed to remove or restrict the opportunity of
other producers or suppliers of soda ash to compete
effectively with Solvay. They also consolidated the
dominant position of Solvay in a manner which is
incompatible with the concept of competition inherent
in Article 82.

(176)

total

requirements,

If a customer contracts for a tonnage which is in fact
equivalent or close to its
such
arrangements may still be exclusionary and fall under
Article 82, particularly if they are of long duration. In
the case of (cid:145)evergreen(cid:146) contracts the 24-month notice
period imposed by Solvay was excessively long.
It
prevented the customer from reacting in an informed or
competitive manner to changes in market conditions.
Since it is impossible to predict with any certainty what
conditions will prevail
the long
period of notice acted as a strong deterrent against
terminating the link with Solvay. Some customers at
the notice period
length of
least
oppressive.

considered the

in two years’

time,

(180) Even considered on their own, each of the arrangements
described tended to bind the customer to Solvay in such
a way as to exclude competitors. The combined effect of
the various devices was such as to ensure that Solvay’s
dominant position was almost wholly protected from
competition.

(b) Discrimination

(181)

(iv) Competition clauses and other exclusionary

clauses in agreements

the
In addition to its exclusionary object and effect,
rebate system applied by Solvay also falls under the
the
express prohibition in Article 82(c)
to equivalent
application of dissimilar
transactions.
financial
inducements did not reflect possible differences in costs
based on the quantities supplied but were prompted by
the concern to secure the whole or the largest possible
percentage of the customer’s requirements.

conditions
and

rebates

against

other

The

(177) The various forms of

(cid:145)competition clause(cid:146) and other
similar mechanisms set out in recitals 111 to 123 all
reinforced the tie with Solvay, limited the opportunities
for the customer to change suppliers and made entry
for competitors at established Solvay customers more
difficult. The purpose of these various clauses was to
the established supplier a built-in
give Solvay as
advantage over
attempting to
any other
compete for all or even a part of the business of the
customer in question.

supplier

(182) Within

a

State

particular Member

there were
considerable differences both as to the size of the rebate
tonnage at
and other inducements and the (cid:145)trigger(cid:146)
which it was activated. The amount of
the special
(cid:145)cheque rebate(cid:146) also seems to have varied in a wholly
arbitrary way.

(178) Far from mitigating the anticompetitive effect of the
long-term supply agreements with Solvay (with their
fidelity rebates and de facto exclusivity), the competition
clauses in fact strengthened the tie between Solvay and
the customer and were exclusionary in object and effect.
They allowed Solvay to be fully informed of the details

(183) The result of the rebate system in Germany was not
only in theory to disadvantage customers who might
not take their full or the major part of their requirement
from Solvay (only a few did not do so) but also to
discriminate as between customers who did. Thus a
large customer could well pay substantially more per
tonne than a smaller producer even though both were
buying their total requirement from Solvay.

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Official Journal of the European Communities

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(184) The

to

the

given

rebate

largest

special

1,5 % group

customer but under

the
Saint-Gobain companies was also discriminatory in
nature. It is true that the Saint-Gobain group as a whole
was by far
the
agreements with Solvay the group’s purchases were
fragmented on a national basis. The group rebate did
not in fact reflect any cost advantage attributable to the
quantities delivered but was (as Solvay itself stated in its
own documents) intended to secure the loyalty of the
group. The result was that the Saint-Gobain subsidiary
in one Member State could receive a substantially better
price from Solvay than a competitor which actually
took a similar or even larger volume from the local
Solvay factory.

the majority of

(185) The price discrimination had a considerable effect upon
the costs of the undertakings affected. In the glass sector
ash
soda
for
(which accounts
consumption) soda ash is, after fuel costs,
the most
expensive single item in the manufacturing process.
Although it
the finished
is only 13 % by weight of
product, it accounts for up to 70 % of the raw material
the
batch cost. The cost of
profitability
glass
manufacturers.

soda ash thus affects
position

competitive

and

of

ash from the United States of America were seen as the
the soda ash
to Solvay’s domination of
main threat
market
in continental western Europe. The activities
therefore affected the basic competitive structure of the
soda ash industry within the Community.

(189)

It should also be noted that if the major glass producers
had imported soda ash from the United States of
America in substantial quantities, they would probably
have done so in order to supply their works in several
exclusionary
Furthermore,
Member
States.
measures were
the American
aimed not only at
producers but also at smaller producers of synthetic ash
located inside the Community. All of these producers
had since 1982 been making deliveries from their own
national market
to other Community Member States
although their opportunities were severely constrained
by Solvay’s pricing policies.

Solvay’s

B. ARTICLE 15(2) OF REGULATION No 17

4. EFFECT ON TRADE BETWEEN MEMBER STATES

(186) Article 82 covers not only abuse which may directly
prejudice consumers but also abuse which indirectly
prejudices them by impairing the effective competitive
structure in the common market as envisaged by Article
3(g) of the Treaty.

(191)

(187) The fidelity rebates and other inducements to exclusivity
applied by Solvay affected trade between Member States
by reinforcing the links between the customers and the
dominant supplier. The opportunities for competing
suppliers to enter new markets or obtain new customers
were effectively removed since the customer’s marginal
tonnage
for which they would be
competing were then being supplied by Solvay at prices
which they were unable to meet. The various devices
employed by Solvay to tie customers had the result of
reinforcing the structural rigidity and the division of the
soda ash market along national lines, and thus harmed
or threatened to harm the attainment of the objective of
a single market between Member States.

requirements

(188) The fact that Solvay’s measures were aimed principally
at imports from the United States of America does not
affect the application of Article 82. Imports of natural

(190) Under Article 15(2) of Regulation No 17,

the
Commission may by decision impose on undertakings
fines of from EUR 1 000 to EUR 1 million, or a sum in
excess thereof but not exceeding 10 % of the turnover
in the preceding business
the
undertakings participating in the infringement where,
either intentionally or negligently, they infringe Article
82. In fixing the amount of the fine, regard shall be had
both to the gravity and to the duration of
the
infringement.

each of

year of

(a) Gravity

to the detriment of

In the present case the Commission considers that the
infringements were of extreme gravity. Solvay was the
major producer of soda ash in the Community and the
infringements enabled it to consolidate its hold over the
market by excluding effective competition in a large
part of the common market. By foreclosing for a long
time sales opportunities
for all competitors, Solvay
caused lasting damage to the structure of the market
concerned,
consumers. This
infringement is under the specific circumstances of the
case more serious than the infringements of Article 81
in which Solvay was also involved. Solvay was well
extensive negotiations with the
aware
Commission
the
1980
requirements of Article 82 in relation to exclusivity. It
was also clearly cognisant of the prohibition of fidelity
rebates. The documentation obtained from Solvay shows
that company officials at a high level knew the risk
involved but nevertheless persisted in the abusive
conduct.

from its

between

1982

and

of

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Official Journal of the European Communities

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(192)

In determining the amount of the fine the Commission
will take account of the fact that in the negotiations
with Solvay between 1980 and 1982 it accepted a
notice period of two years in the case of (cid:145)evergreen(cid:146)
contracts and did not object to the competition clauses
is also
in the form in which they were drafted.
possible that Solvay was led to believe that long-term
tonnage contracts could be concluded which limited
purchases from other sources to 15 % of the customer’s
requirements.

It

(197)

(193) From its

case

in the present

the
investigations
in practice these
Commission has ascertained that
exclusivity,
tended to reinforce Solvay’s
provisions
particularly when combined with other abusive devices
and unofficial
such as
the
(cid:145)undertakings(cid:146)
its
It will therefore impose a
requirements from Solvay.
the fidelity rebates and the
fine only in respect of
(cid:145)unofficial(cid:146) exclusivity agreements.

the customer would obtain all

fidelity rebates

secret
that

judgment in Case C-137/92 P Commission v BASF and
others (16) and annulled the Decision at issue in those
proceedings (Decision 89/190/EEC) on the grounds that
the Commission had failed to comply with Article 12 of
its Rules of Procedure,
in the version in force at the
time, which required decisions to be authenticated in
the language or languages in which they are binding by
the
the
the
signatures
Secretary-General.

President

and

of

II)

(Solvay

In its judgment of 29 June 1995 in Case T-32/91 Solvay
v Commission (17)
concerning Decision
91/299/EEC, adopted by the Commission in the present
proceedings on 19 December 1990, the Court of First
Instance ruled that the new plea submitted by Solvay
was admissible and,
the
contested Decision had not been authenticated before it
the
was notified, annulled it on the grounds
Commission had infringed an essential procedural
requirement within the meaning of Article 173 of the
EEC Treaty (now Article 230 of the EC Treaty).

finding that

the text of

that

(194) Solvay has been the

subject on several previous
occasions
the
imposed
Commission for collusion in the chemicals industry:
Peroxides, Polypropylene, PVC.

substantial

fines

by

of

(198) The Commission brought

that
against
judgment before the Court of
Justice. The Court
dismissed the appeal in its judgment of 6 April 2000 in
Joined Cases C-287/95 P and C-288/95 P (18).

an appeal

(b) Duration

(195) The infringements began in about 1983 (cid:151) very shortly
after the negotiations with the Commission and the
closure of the Commission’s file (cid:151) and continued up
until at least the end of 1990.

C. PROCEEDINGS BEFORE THE COURT OF FIRST INSTANCE AND
THE COURT OF JUSTICE

(199) The Court of First

Instance took the view in its
judgment of 20 April 1999 in Joined Cases T-305/94,
T-306/94, T-307/94, T-313/94 to T-316/94, T-318/94,
T-325/94, T-328/94, T-329/94 and T-335/94 LVM and
others v Commission (19) (PVC II) that the Commission
is entitled to adopt again a decision that has been
annulled on account of purely procedural defects; a new
decision may in such cases be adopted without initiating
fresh administrative proceedings; the Commission is not
required to organise a further hearing if the text of the
new decision does not contain objections other than
those set out in the first decision; and the rights of the
defence of the undertakings concerned are not infringed
if the new decision is taken within a reasonable time.

(196) On 19 December 1990 the Commission,

that

Solvay

finding

to Article 86 of
91/299/EEC

acting
the EEC Treaty, adopted
pursuant
Decision
had
committed an infringement and requiring it to pay a
fine of ECU 20 million. The Decision was notified to
the undertaking by registered letter on 1 March 1991.
Solvay brought an action for annulment of the Decision
before the Court of First Instance on 2 May 1991. On
10 April 1992 Solvay submitted a (cid:145)supplementary
application(cid:146), in which it put forward a new plea to the
effect that the contested Decision should be declared
non-existent following the judgment delivered by the
Court of First Instance on 27 February 1992 in Joined
Cases T-79/89, 84/89, 85/89, 86/89, 89/89, 91/89,
92/89, 94/89, 96/89, 98/89, 102/89 and 104/89 BASF
and others v Commission (15). The Court of Justice ruled
on the appeal brought by the Commission against that

(15) [1992] ECR II-315.

(200) The Court

of

also

First

Instance

the
Commission’s interpretation of Council Regulation (EEC)
No 2988/74 of 26 November 1974 concerning
limitation periods in proceedings and the enforcement
of sanctions under the rules of the European Economic
Community relating to transport and competition (20).

upheld

(201)

In accordance with Regulation (EEC) No 2988/74, the
Commission’s power to impose fines or penalties for

(16) [1994] ECR I-2555.
(17) [1995] ECR II-1825.
(18) [2000] ECR I-2391.
(19) [1999] ECR II-931.
(20) OJ L 319, 29.11.1974, p. 1.

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infringement of the competition rules is subject to a
limitation period of five years. In the case of continuing
or repeated infringements, time begins to run on the
day on which the infringement ceases (i.e. the end of
1990 in the present case).

handed down on 6 April 2000. Even disregarding the
time that elapsed between delivery of the judgment of
the Court of First
the
appeal to the Court of Justice, the limitation period was
suspended for at least eight years, nine months and four
days.

Instance and introduction of

(202) Under Article 2 of Regulation (EEC) No 2988/74, any
action taken by the Commission to investigate or
initiate proceedings against an infringement interrupts
the limitation period. Each interruption starts
time
running afresh, but the limitation period expires at the
latest on the day on which a period equal to twice the
limitation period has elapsed without the Commission
having imposed a fine or a penalty, in other words ten
years from the date on which the infringement ceases.

the limitation period,

(203) Article 2(1) of Regulation (EEC) No 2988/74 lists
certain Commission actions which interrupt the running
of
including the statement of
objections. The list is not exhaustive. The Court of First
Instance left open the question whether adoption of the
annulled Decision itself constituted an action that
interrupted the running of the limitation period. Even
supposing that
the infringement ceased on 31
December 1990 and (ii) adoption (and notification) of
the annulled Decision did not interrupt the running of
the limitation period, the Commission would have had
at least until the end of 1995 in order to adopt its
decision.

(i)

(204) The limitation period must be extended by the time
during which the action for annulment of the Decision
was pending before the Court of First Instance. Under
Article 3 of Regulation (EEC) No 2988/74,
the
limitation period in proceedings is to be suspended for
as long as the Commission decision is the subject of
proceedings pending before the Court of Justice (which,
in this context,
is to be understood as including the
Court of First Instance).

(207)

If
that suspension is added to the limitation period
expiring on 31 December 1995, the Commission has
until September 2004 in order to adopt again the
annulled Decision,

HAS ADOPTED THIS DECISION:

Article 1

Solvay et Cie SA, now Solvay SA (Solvay), infringed Article 86
of the EEC Treaty (now Article 82 of the EC Treaty) from
1983 until around the end of 1990 by a course of conduct
aimed at excluding or
severely limiting competition and
consisting of:

(a)

the conclusion of agreements with customers which
required them to purchase the whole or a very large
proportion of their requirements of soda ash from Solvay
for an indefinite or excessively long period;

(b) the granting of substantial rebates and other financial
inducements referable to marginal tonnage over and above
the customer’s basic contracted tonnage in order to ensure
that they bought all or most of their requirements from
Solvay;

(c) making the granting of

rebates dependent upon the
customer agreeing to buy the whole of its requirements
from Solvay.

(205) As the Court of First Instance stated in paragraph 1098
of its judgment in PVC II, the specific purpose of Article
3 is to enable the limitation period to be suspended
where a decision finding an infringement and imposing
a fine is annulled. The limitation period was therefore
suspended for as long as Decision 91/299/EEC was the
subject of proceedings pending before the Court of First
Instance and the Court of Justice.

Article 2

A fine of EUR 20 million is imposed on Solvay in respect of
the infringement specified in Article 1(b) and (c).

The fine shall be paid within three months of the date of
notification of this Decision to the following account:

(206)

In the case in point, Solvay’s action for annulment was
brought before the Court of First Instance on 2 May
1991 and the latter delivered its judgment on 29 June
1995. The Commission’s appeal to the Court of Justice
was brought by an application introduced on 30 August
in those proceedings was
1995 and the judgment

Account No 642-0029000-95
European Commission
Banco Bilbao Vizcaya Argentaria (BBVA)
SWIFT code: BBVABEBB
IBAN code: BE76 6420 0290 0095
Avenue des Arts/Kunstlaan, 43
B-1040 Brussels.

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Official Journal of the European Communities

15.1.2003

After expiry of that period, interest shall become 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 was adopted plus 3,5 percentage
points, namely 8,32 %.

Article 3

This Decision is addressed to Solvay SA,
Albert/Prins Albertstraat 33, B-1050 Brussels.

rue du Prince

This Decision shall be enforceable pursuant to Article 256 of
the Treaty.

Done at Brussels, 13 December 2000.

For the Commission

Mario MONTI

Member of the Commission