2003/7/EC: Commission Decision of 13 December 2000 relating to a proceeding under Article 82 of the EC Treaty (COMP/33.133-D: Soda-ash — ICI) (notified under document number C(2000) 3796) (Text with EEA relevance)
Date: 2000-12-13
Institutions: European Commission
Subjects: chemical industry, chemical salt, dominant position, price agreement, reduced price, restriction on competition, supply

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Official Journal of the European Communities

L 10/33

COMMISSION DECISION

of 13 December 2000

relating to a proceeding under Article 82 of the EC Treaty

(COMP/33.133-D: Soda-ash (cid:151) ICI)

(notified under document number C(2000) 3796)

(Only the English text is authentic)

(Text with EEA relevance)

(2003/7/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

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

by Regulation

amended

last

as

Having regard to the Commission’s 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,
in accordance with 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
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. 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.

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 Imperial Chemical
Industries plc (ICI).

2. INFRINGEMENT OF ARTICLE 82 BY ICI

From about 1983 until about
the end of 1990 ICI
abused the dominant position which it held in the
market for soda-ash in the United Kingdom by applying
to its major customers a system of loyalty rebates and
discounts by reference to marginal tonnage ((cid:145)top-slice(cid:146)
rebates), contractual arrangements tending to ensure an
effective exclusivity of supply for ICI and other devices
which had the object and effect of
tying the said
customers to ICI for the whole of their requirements
and of excluding competitors.

B. THE SODA-ASH MARKET

1. THE PRODUCT

concerns

The present procedure
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

(2)

(3)

(4)

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

(11)

(5)

(6)

In the United States, so-called (cid:145)natural(cid:146) soda-ash is mined
from trona ore deposits found mainly in Wyoming.
After mining, the trona ore is purified and calcinated 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 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 is particularly suitable for 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.

2. THE PRODUCERS

(7)

The six Community producers of synthetic soda-ash at
the relevant times were:

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

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 date 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 accounts for some 7,2 million
tonnes, with Solvay capacity of some 4,3 million tonnes
and ICI 1 million tonnes. (Practical or effective capacity
was some 85 to 90 % of (cid:145)nameplate(cid:146) capacity.) Soda-ash
consumption in the Community in 1989 was around
5,5 million tonnes annually, worth some EUR 900
million.

(cid:151) Solvay,

(cid:151) ICI,

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

(cid:151) AKZO,

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

(cid:151) Chemische Fabrik Kalk (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
the undisputed market
west European market was
leader.

(14)

(15)

(16)

Belgium,

of Austria,
Italy,

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

Luxembourg,

(8)

(9)

The (then) six United States 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 tonnes. Natural ash production in the United
States in 1989 was almost 9 million tonnes. The United
States producers supplied the whole of
their home
market and exported the balance of production. Costs of
production of natural ash are very much lower than for
the synthetic product, but
the mines are located far
from their principal markets and distribution costs are
correspondingly high.

the

European manufacturers

The United States producers of dense ash were viewed
the major
by
the
competitive threat
exchange rates prevailing in the late 1980’s it was
possible for these producers to sell in Europe at prices
substantially below the local market price levels without
dumping.

in their home markets. At

as

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
countries was in the form of
light ash. Despite the
existence of anti-dumping duties, there were substantial
light soda-ash from
imports into the Community of
Comecon countries.

(10) After 1987, ICI Soda Ash Products was operated as a
separate business within ICI’s Chemicals and Polymers
Division. Formerly it was part of ICI’s Mond Division.

(17) During the 1980’s there was a marked increase in
demand and soda-ash was fully sold worldwide. Plants

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were running at maximum output
in 1990. Chinese
manufacture was expected to increase by some 500 000
tonnes per annum and production in Botswana (for
South Africa) was expected to produce another 300 000
tonnes, developments which were considered likely to
from other
result
production areas.

in the displacement of

imports

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
increase
Europe
in western
soda-ash
substantially in 1987.
In 1988 and 1989 producers
worked at full capacity.

began

to

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

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 to
it by Solvay for this purpose.

(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)

In Belgium Solvay’s market share was in excess of 80 %,
ICI had over
in France 55 % and in Germany 52 %.
90 % of
the only
the United Kingdom market,
alternative sources of supply being the United States 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 is one of the major
cost components in glass production accounting for
some 60 % of raw material batch costs. Most glass

continuous process plants

producers operate
and
required an assured supply of ash. In most cases they
had a relatively long-term contract with one major
supplier for the larger part of their requirements, with
supplier as a secondary source. The glass
another
the subject of a
industry was during the 1980’s
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 %.

5. UNITED STATES NATURAL ASH

(24)

Since the development of natural ash mining in the
1960’s the United States market showed a substantial
excess of capacity over domestic demand and a surplus
of some 2,5 million tonnes was available annually for
export at the end of the 1980s.

(25) Given the over-supply and the presence of a number of
producers with similar costs, the United States domestic
market was marked by strong price competition. The
product was being sold in the United States 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
being around USD 73/short ton, to which had to be
added transport costs by rail to the East Coast industrial
centres. List prices were raised by most producers to
USD 98/short ton effective on 1 July 1990 and the
effective price went up to around USD 85.

(26)

In 1982 United States

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.
into 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 United States dense soda-ash imports
in 1982.
(Anti-dumping measures were also in force
against east European imports of light, but not dense,
ash from October 1982.)

imports

(27)

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

(a)

for the two producers then in the market, Allied
(later 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.

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(b) for those producers not

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

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.

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 by
1990, of
the United States producers, only General
Chemical was still supplying in the United Kingdom,
although at a rate of only around 30 000 tonnes per
year.

From 1987 onwards General Chemical had also been
targeting France, affecting in particular Solvay and
Rhone-Poulenc which shared this 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 (cid:145)inward-processing(cid:146).

(28)

(29)

(30)

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

(32)

(33)

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
United States producers and by representatives of the
Community glassmaking industry in 1988. On 7
September 1990 the review was terminated without
protective measures
(Commission
being
Decision 90/507/EEC (6)).

imposed

In 1982, some of the United States producers formed
an export association under the Webb-Pommerene Act
of 1918 with the approval of
the United States
Department of Commerce:
initially its activities were
restricted to Japan and only three producers took part.
In December 1983 all six natural ash producers joined

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

to form the American Natural Soda Ash Corporation
(Ansac).

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

application

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

subject

the

(34)

(35)

C. BACKGROUND

1. ICI’S POSITION IN THE UNITED KINGDOM SODA-ASH

MARKET AT THE RELEVANT TIME

(36)

ICI was the only soda-ash market producer located in
the United Kingdom. The (cid:145)Page 1000(cid:146) agreement of
1945 (replacing an earlier cartel agreement) recognised
that Solvay and ICI would not compete in each other’s
traditional markets.

(37) Up to the end of 1990, neither Solvay nor any other
producer in continental western Europe had marketed
soda-ash in the United Kingdom. ICI enjoyed a complete
monopoly in the supply of soda-ash to the United
Kingdom until the late 1970s when import penetration
from the United States began. Two United States
producers, TGI and Allied were active on the market
and imports reached 77 000 tonnes in 1982 (some
10 % of the market) before anti-dumping measures were
adopted and reduced the United States presence to
around 30 000 tonnes per year. TGI soon abandoned
the market and the only alternative suppliers to ICI were
General Chemical (as Allied was known) with some 4 %
of the market and Brenntag which supplied Polish ash
(3 %) (8).

(38)

The ICI soda-ash business was continuously profitable
until the early 1980s, when there was a substantial fall
in demand. From 1979 to 1984 soda-ash consumption
in the United Kingdom dropped by one-third, leading to
the closing of the ICI’s production units (Wallerscote) in
September 1984.

(7) OJ L 152, 15.6.1991, p. 54.
(8) The major customers all used ICI as their primary source with the
United States or Polish producers as a possible second supplier
only.

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(39) As a result of

the closure,

the United Kingdom
supply-demand balance was in deficit and ICI bought
material from Solvay under (purchase for resale) (cid:145)PFR(cid:146)
arrangements.

(47)

In the flat glass sector Pilkington was the only United
Kingdom producer, with a requirement of almost
150 000 tonnes per year: ICI had 95 % of the business.

(40)

(41)

ICI’s declared policy was to maximise its share of the
United Kingdom soda-ash market and to maintain it at
over 90 %.

Following the introduction of anti-dumping measures,
ICI’s market share remained stable at about 93 %. The
ICI soda-ash operation returned to profitability from
1986
a mature
onwards
cash-generating business.

considered

and was

2. ICI’S COMPETITORS

(42) Whatever the reason,

(cid:145)major competitive incursions(cid:146) by
other Community producers were considered unlikely
by ICI, although from 1980 the list price levels of ICI in
the United Kingdom were substantially (cid:151) up to 20 %
(cid:151) higher than those of producers in the neighbouring
markets.

(43) According to a briefing by the Soda Ash Business Team
Leader ICI
(cid:145)have managed to reduce the number of
competitors in the market to two (cid:151) Poland and one
American supplier (cid:151) and plan to keep it this way(cid:146).

(44)

(45)

Imports of soda-ash from Poland continued to reach the
United Kingdom market via a trader, Brenntag (formerly
TR International). There were no anti-dumping duties
on dense-ash from eastern Europe, but non-Community
ash imported to the United Kingdom was subject to a
10 % customs duty. At 30 000 tonnes per year (of
which half was a special metallurgical grade) Polish
imports were however considered (cid:145)troublesome rather
than critical(cid:146) by ICI. ICI seemed to have developed a
policy of eliminating supplies of Polish heavy-ash
leaving only imports of light-ash from that source.

The United States producers of natural-ash were
considered by ICI as the main source of potential
competition. Up to 1990, the anti-dumping measures
(undertakings from two producers and anti-dumping
duties on the others) provided ICI with a substantial
measure of protection. According to ICI, perhaps half of
its profit would have been at risk if anti-dumping
protection against United States
imports had been
removed.

3. ICI’S CUSTOMERS

(46) Most of

ICI’s major soda-ash customers were in the
sector which in the United
(Dense-ash

glass manufacturing
Kingdom used
dense-ash.
accounted for 75 % of ICI’s soda-ash sales.)

exclusively

(48)

(49)

(50)

(51)

(52)

(53)

(such as United Glass,
Container glass producers
Rockware, Redfearn, Beatson Clarke) accounted for up
to 300 000 tonnes per annum of dense soda-ash: again,
they sourced primarily or exclusively from ICI.

ICI’s 10 largest
Kingdom accounted for almost 80 % of
business.

soda-ash customers

in the United
total
its

The major
metallurgical and chemical sectors.

customers

for

light-ash were

in the

4. ANTI-DUMPING MEASURES AGAINST UNITED STATES

PRODUCERS

The undertakings offered by Allied and TGI in August
1984 and accepted by the Commission (Commission
Regulation (EEC) No 2253/84 (9)) were not published
but
the minimum price
ICI was well aware that
undertaking was GBP 112,26 ex-store.

TGI withdrew from the market in 1985 leaving Allied
(which after reorganization became General Chemical)
the
as the only United States supplier. For most of
period covered by the present decision,
the General
Chemical price was GBP 119 per tonne ex-store. Allied’s
from GBP 112,26 in
price was raised to this level
the
contacts with
following
1985
November
Commission’s Directorate-General for External Relations
(DG I) but no official review was undertaken until the
expiry of Council Regulation (EEC) No 3337/84 (10) in
late 1989.

Both ICI and Solvay became aware that as a result of
exchange rate movements since 1984 the United States
producers would be able to offer natural-ash in the
Community at prices
competitive with (and even
substantially below) their own without dumping. Both
of these producers also knew that in many cases their
own prices, particularly on marginal
tonnage, were
substantially below the minimum price undertakings.
They foresaw a strong likelihood that the United States
producers could make a successful case for the removal
of anti-dumping protection in 1989 when the measures
were due for review. However ICI considered that in
soda-ash
order
to
products business at current

to maintain the profitability of

levels it was crucial

its

(9) OJ L 206, 2.8.1984, p. 15.
(10) OJ L 311, 29.11.1984, p. 26.

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ensure that anti-dumping measures against United States
ash remained in place. On a number of occasions ICI
wrote to the Commission arguing that irreparable harm
would be caused to its business unless a minimum price
for imported material of GBP 120 per tonne ex-store
was maintained. At the time that ICI last wrote to the
Commission in these terms (on 16 March 1990, after
the commencement of the present proceedings) it had
recently modified its price of
largest customer
(Pilkington) to a single price of GBP 110 per tonne
delivered.

its

(58) On 24 December 1980 ICI wrote to the Commission
asserting that the customers were being offered a range
of contract options from which they could choose:
(cid:145)In
no way is ICI obliging its principal customers (cid:151) or,
indeed, any of
to accept a form of
contract which requires them to purchase from ICI their
total requirements of soda-ash or a quantity close to
this, nor does it offer any special inducement to do so.(cid:146)
As a result of the discussions with the Commission, ICI
amended almost all its supply contracts to a (cid:145)tonnage(cid:146)
basis.

its customers

(54)

The anti-dumping measures against the United States
producers expired in November 1989. A review of the
measures had been requested by the United States
producers and by representatives of
the Community
glass industry in 1988. On 7 September 1990 the
terminated without protective measures
review was
being imposed (Commission Decision 90/507/EEC) (11)).

5. EXCLUSIVE SUPPLY AGREEMENTS

(55) Until 1979 most of

its

ICI’s

supply agreements were
so-called (cid:145)evergreen contracts(cid:146) (i.e. contracts running for
an indefinite period) with a
two-year notice of
termination and which stipulated that the buyer obtain
from ICI. Following
the whole of
negotiations with the Office of Fair Trading, ICI began
in October 1980 to offer its United Kingdom customers
a range of contract options which included running
contracts on a total requirements basis but terminable
on shorter notice (three to six months notice after one
year).

requirements

(56)

clause

the total
The Commission however considered that
requirements
short periods was
even for
unacceptable in terms of Community competition rules.
The Commission also objected to certain aspects of ICI’s
(cid:145)competition clause(cid:146) (English clause) as then drafted since
it would effectively have excluded the possibility that
any competitive offer could ever succeed.

(57) Although ICI disputed that its new form agreements
were incompatible with competition rules,
it agreed
(under protest) to cease to offer to its customers a total
requirements contract terminable at short notice. It also
amended its non-competition clauses. The file was
closed on 14 December 1982 without any formal
decision. It is amply clear from the correspondence that
ICI was well aware of
the policy on fidelity rebates
underlying the judgment of the Court of Justice of the
in Case 85/76 Hoffmann-La
European Communities
Roche v Commission (12).

(11) OJ L 283, 16.10.1990, p. 38.
(12) [1979] ECR 461.

(59)

(60)

(61)

(62)

6. QUANTITY REBATES UP TO 1985

lists were produced showing

Soda-ash was normally sold by ICI on a delivered basis.
an
Although price
ex-works price, these were intended for internal ICI use
only and were not communicated to customers. To the
ex-works price was added the transport rate as quoted
by the haulier to ICI (customers wishing to collect from
the works were given a collection allowance of part (cid:150)
but not all (cid:150) of the actual haulage cost).

quantity

given until

rebates were

the
Standard
mid-1980’s.
ICI’s (cid:145)price book(cid:146) circular of 1 October
1985 shows that a new scale of tonnage rebates was to
be effective on 1 January 1986. The standard tonnage
rebates in this 1985 list ranged from GBP 0,25 per
tonne (2 500 to 7 500 tonnes) to GBP 3,00 per tonne
for an annual take-off of over 87 500 tonnes. According
to ICI, from 1984 onwards rebates were (cid:145)for the most
part(cid:146) the subject of individual negotiation.

D. EXCLUSIONARY CONDUCT BY ICI

1. TOP-SLICE REBATES

In spite of the assurances on special inducements which
ICI had given to the Commission in 1981, from 1983
onwards it made increasing use of so-called (cid:145)top-slice
tonne on marginal
rebates(cid:146) of up to GBP 30 per
tonnage. From 1985 almost all the major customers of
ICI had such arrangements in place.

The term (cid:145)top-slice rebate(cid:146) means that customers were
offered substantial financial
incentives in the form of
deep discounts in order to induce them to buy from ICI
not only the (cid:145)core(cid:146) tonnage which they would normally
have obtained from their principal supplier but also the
marginal tonnage (or (cid:145)top slice(cid:146)) which they might or
would otherwise have purchased from a second supplier
which in the United Kingdom would have been either
TR (later known as Brenntag) or Allied (later known as
General Chemical).

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2. EXCLUSIONARY PURPOSE OF THE TOP-SLICE REBATES

(69)

(63)

The place in ICI’s strategy of the top-slice rebates was
made clear in a number of internal memoranda dating
from 1985.

Pursuant to the plan, ICI’s policy was (cid:145)to compete for
the US share of the business by offering up to GBP
15/tonne equivalent discounts for (cid:147)top-slice tonnage(cid:148)
above the core ICI tonnage.(cid:146) (The paper noted that at
the time the differential between ICI’s list price and
those of the United States producers Allied and TGI was
only GBP 0,50 per tonne.)

(64)

By early 1985 it was apparent to ICI that one of the
two United States suppliers, TGI, was intending to
withdraw entirely from the market, not least as a result
of the (cid:145)deals(cid:146) which ICI had offered the glass industry in
order to displace the product from the United States.
it obtained the
ICI’s objective was
maximum benefit
It was
concerned that customers which had previously used
TGI as a second source should not go to Allied, the
other United States supplier, or still worse from ICI’s
in
point of view, approach producers or
continental western Europe.

to ensure that
from TGI’s withdrawal.

traders

(65)

Referring to the likelihood of picking up most of the
former TGI business, an ICI note of 28 February 1985
states that (cid:145)monies are available to extend the existing
top slice deals(cid:133)(cid:146).

(66) A strategy document of 28 June 1985 sets out

in
explicit detail ICI’s plan for preventing or eliminating all
imports of dense soda-ash into the United Kingdom
with the exception of Allied (later known as General
Chemical), which ICI,
(cid:145)commercial
for
prudence(cid:146) was content to see remaining in the United
Kingdom market as a minor supplier strictly limited as
to price and to volume.

reasons of

(67)

ICI’s objective as regards eastern European imports of
dense-ash was clearly stated:

(cid:145)1. To reduce current TR bagged and bulk special

heavy-ash sales to zero/minimum.

2. To prevent TR establishing any position with bulk

standard heavy ash at any glass producer.(cid:146)

(68)

The strategy of ICI as regards US imports of dense-ash
was set out as follows:

(70) Originally ICI had expected to pick up the majority of
the former TGI business and keep Allied’s sales down to
15 000 tonnes per year. Subsequently it had to accept
that almost all
the major glassmakers wished to
maintain a second source which would have given
annually.
Allied some 25 000 to 30 000 tonnes
Paradoxically,
it suited ICI’s purposes to have Allied
remain in the market as a minimal presence at prices
anti-dumping
which were
undertakings.
to have withdrawn
inevitably
the glassmakers would almost
completely,
have looked to Europe for alternative supplies. Traders
in western Europe were seen as a particular danger to
market stability. A memorandum of 18 November 1985
explains:

by
If Allied were

controlled

the

(cid:145)The strategy remains one of being price competitive at
every account on a delivered basis in order to achieve
the core ICI tonnage, and to offer top-slice deals of up
to GBP 15/tonnes to obtain incremental tonnage from
Allied. The objective is to maintain Allied(cid:145)s position at
less than 30 000 tonnes annually. Our intention is not
to force Allied from the marketplace since this would
force the glass industry to seek supplies from either
continental western Europe or eastern Europe.(cid:146)

3. THE OPERATION OF THE TOP-SLICE REBATES

(71)

The operation and the effect in practice of the top-slice
rebate system have to be assessed in the light of:

(cid:151) the minimum-price undertakings given by the two

American producers,

(cid:151) ICI’s practice of securing the customer’s agreement

to limit their purchases from competitors.

(a) The minimum-price undertaking

(cid:145)1. To minimise Allied sales to a level that will result in
them remaining as a second source to the glass
industry: 15 000 to 20 000 tonnes per annum.

2. Prevent any other United States supplier; Ansac
establishing a position in the United Kingdom.(cid:146)

(72) Although the original minimum-price undertaking for
the United Kingdom was set at GBP 112,26, this was
increased (cid:145)unofficially(cid:146) (i.e. without a formal review) to
GBP 120 (reduced to GBP 119 soon afterwards)
the United Kingdom
following contacts between ICI,

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Department of Trade and Industry (DTI) and the
Commission’s Directorate-General for External Relations
(then known as DG I) when ICI put up its prices by
6,5 % with effect from 18 November 1985.

(78) A handwritten note, undated, but probably also from
late 1987 when ICI put its prices up by GBP 6 per
(cid:145)Are we cutting top slice enough? Gen
tonne reads:
Chem may not
follow increase. Top slice should be
under GBP 112,26 ex works.(cid:146)

(73) General Chemical (formerly Allied) was unlikely to go
much below this price of GBP 119 ex-store, since it was
aware that any perceived breach of
the (cid:145)unofficial(cid:146)
undertaking would have resulted in the imposition of
prohibitive anti-dumping duties.
In fact apart from a
GBP 1 per tonne allowance for quantities over 1 000
tonnes, General Chemical never gave discounts or
rebates off list price. From November 1985 its price to
container glass manufacturers was GBP 119 per tonne
ex-works, increased to GBP 121 in January 1988. For
Pilkington the price was slightly less but still well above
the official undertaking.

(74)

ICI’s internal documents show clearly the relationship
between the minimum-price undertaking
and the
top-slice rebate and how it was aimed at containing the
competitive activity of General Chemical.

(75)

Referring to the price increase of 18 November 1985,
and its implementation at the major customers, an ICI
(cid:145)The Allied minimum-price
briefing note observes that:
remained at GBP 112,26/tonnes
undertaking has
equivalent ex-store, but
their price having increased
initially to GBP 120/tonnes equivalent ex-store has very
recently been eroded to GBP 119/tonnes equivalent(cid:133)
All customers apart from Redfearn and UG have an
incremental tonnage deal in place with rebate of GBP 5
to GBP 20/tonnes equivalent being offered as either
export assistance (principally Beatson Clarke) or
to
attract potential United States tonnage to ICI.(cid:146)

(76)

the largest container glass producers):

Later the note reports the position of United Glass (one
of
(cid:145)Deals for
tonnage of GBP 10 to GBP 20/tonnes
incremental
equivalent proposed continuously over past two years
but UG not prepared to change their stance of 10 to
15 % ex-USA(cid:133)(cid:146).

(77) A memorandum of the quarterly sales meeting of ICI
Soda Ash Products dated 4 September 1987 makes the
connection even more explicitly:
(cid:145)(cid:133) budget allows for
additional GBP 500 000 tonnes in rebates in order to
ensure that marginal tonnage sought by all major bulk
customers is below GBP 112,26 tonnes ex-works, the
General Chemical minimum price undertaking. (cid:146)

(79) With General Chemical effectively prevented by the
from going below GBP
anti-dumping undertakings
the (cid:145)unofficial(cid:146) undertaking
112,26 (if not GBP 119,
price),
its presence was
marginalised by the operation of the top-slice rebate
system.

ICI was able to ensure that

(80) A striking example of the operation of this policy is
provided by the case of Pilkington, the largest customer,
where ICI was aiming at obtaining a 100 % supply
position. Pilkington operated at several United Kingdom
sites and had a total soda-ash requirement for 1986 of
around 135 000 tonnes, all of which was supplied by
ICI except for some 8 500 tonnes to one minor site at
Pont-y-felin.

(81) On Pilkington’s (cid:145)top-slice(cid:146)

(i.e. offtake over 120 000
tonnes) ICI gave a rebate of GBP 20 per tonne. This
(cid:145)top-slice(cid:146) rebate was not particularly costly for ICI in
terms of
It meant
the total offtake of Pilkington.
however that for the Pont-y-felin site ICI was quoting a
delivered price of GBP 108,75 (under GBP 100 per
tonne ex-works) while believing that General Chemical
was supplying at a price of GBP 128,50 delivered
because of the unofficial minimum-price undertaking.
Pilkington had a group purchasing policy of not
becoming dependent upon a single producer so it was
in effect paying a premium of almost GBP 20 per tonne
to have a second supplier. For quality control reasons
Pilkington did not normally mix soda-ash originating
from different producers so if one Pilkington site was to
be (cid:145)denied(cid:146) to ICI it was logical for it to be the smallest
one. In view of the price differential Pilkington had no
alternative but to keep its purchases from the second
supplier to the minimum, so ICI was assured of the vast
bulk of its business.

(82) Another example is provided by Rockware which up to
1988 had a soda-ash consumption of around 70 000
tonnes per year. Again General Chemical was
the
second supplier. Since 1986 ICI had been offering
Rockware a top-slice rebate of GBP 15 per tonne which
according to a letter from ICI of 12 November 1985
was intended,
(cid:145)to encourage you to
minimise your Allied purchases(cid:146). An ICI employee noted
in handwriting at the bottom of the memorandum on
the subject dated 5 June 1987:

in part at

least,

Top-slice must be below GBP 112,26 ex-store.

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(b) Agreement to restrict purchases from competitors

(87)

(83) Whatever formal amendments may have been made to
ICI’s supply agreements in 1980, it is apparent that ICI
in practice made it its business during price negotiations
to ascertain each customer’s total anticipated annual
requirements. Only United Glass seem to have kept ICI
its total consumption needs. With this
uncertain of
detailed knowledge of
the customer’s total soda-ash
consumption ICI was able to frame its (cid:145)top-slice(cid:146) rebate
in such a way as to minimise the customer’s purchases
from any second supplier.

cases
ICI
successfully,

also pressed the
to give a commitment
for the following year.

In several
sometimes
purchase 100 % from ICI
other cases,
taking substantially the whole of
while
limiting purchases
specified and relatively unimportant tonnages.

customer,
to
In
ICI secured the customer’s agreement to
its needs from ICI
to

from another

source

ICI had ascertained that Pilkington’s
total United
Kingdom requirements for 1987 would be 145 000
tonnes (cid:145)of which you intend to purchase from ICI
136 000(cid:146). A top-slice rebate of GBP 25 was given on
any tonnage over 120 000.
ICI clearly indicated to
Pilkington that it hoped by this means to obtain the
Pont-y-felin business as well.

(88)

(cid:145)You expect

For the 24-month period 1 April 1988 to 31 March
1990 the agreement with Pilkington was set out as
follows:
the United Kingdom soda-ash
requirements of Pilkington plc to be close to 150 000
tonnes equivalent per year and you intend to purchase
all this from ourselves with the one exception of your
Insulation Division’s Pont-y-felin works (approximately
9 000 tonnes equivalent per year).(cid:146)

(89)

The top-slice rebate to Pilkington had by this time been
increased to GBP 30 per tonne on offtake over 120 000
tonnes per year.

(90) A note of a meeting between ICI and Pilkington on 6
March 1989 shows that the 100 % theme was still being
actively pursued by ICI.

(cid:151) Pilkington

(cid:151) Rockware

text of

the Pilkington (cid:145)evergreen(cid:146)

In the
supply
agreement dated 1 April 1981 the stipulation (cid:145)Buyer’s
total commercial requirements in the United Kingdom(cid:146)
substituted on 2
was deleted and a new clause
September 1982 which provided simply for (cid:145)a quantity
of sodium carbonate to be agreed annually between
buyer and seller(cid:146).

ICI seems however to have considered that whatever the
wording of the new clause its relations with Pilkington
to be governed by the original
should continue
agreement. Pilkington’s policy of sourcing from ICI for
its four largest sites (total 135 000 tonnes) while buying
up to 8 000 tonnes
small
to remind Pilkington in
Pont-y-felin works
the April 1981 contract had
February 1987 that
referred to (cid:145)Buyer’s total requirements(cid:146):
(cid:145)This is clearly
not today’s reality. As you know we are extremely keen
to make it so and feel
there is no commercial or
technical barrier from our side(cid:133)

from Allied for

led ICI

the

For your part you have indicated some unhappiness at
committing the totality of your requirements to us
irrevocably. I understand your fears and would be only
too happy to agree some modification to the contract
wording that gives you the flexibility you desire whilst
meeting our volume aspirations.(cid:146)

(91)

Rockware originally operated three works (five after
taking over another glass producer, CWS, in 1988).

(92) On 12 November 1985 ICI wrote

to Rockware
confirming the oral agreement which had been reached
for 1986. Incremental tonnage over 65 000 tonnes was
to receive a GBP 15 per tonne rebate. It was expressly
agreed that two of the works would purchase (cid:145)100 % of
their 86 requirements from ICI(cid:146) while the third would
buy the majority of
(cid:145)some 2 500
tonnes will be taken from Allied(cid:146). (Subsequently it was
agreed that
the 2 500 tonnes from Allied would be
diverted to another works.)

its needs from ICI

(93)

(94)

is

from competitors

ICI’s choice of
language in relation to Rockware’s
also not without
purchases
significance. On a number of occasions ICI referred in
its documents to Rockware having (cid:145)admitted(cid:146) to taking a
certain tonnage from General Chemical, a curious
phrase to use if
the customer was free to choose
whether and how much it would buy from another
supplier.

In 1988 Rockware acquired the two CWS factories.
Rockware’s annual usage of soda-ash thus rose from
around 80 000 tonnes to over 100 000 tonnes. On 29
November 1988 ICI and Rockware agreed the 1989
(cid:145)supply frame(cid:146). Having ascertained Rockware’s
total
requirements for 1989 as 104 000 tonnes, ICI obtained

(84)

(85)

(86)

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it would obtain (cid:145)not

an undertaking that
less than
from ICI. Rockware’s purchases from
97 000 tonnes(cid:146)
other suppliers were the subject of detailed discussions.
One of ICI’s specific objectives was to:
(cid:145)Recover 6 000
tonnes per year previously purchased from Poles at
ex-CWS factories.(cid:146)

for 1987,

limited. Thus

was then known). Again, attempts were made by ICI to
ensure that purchases from these competing suppliers
were
an
undertaking from CWS that (cid:145)we intend to restrict our
offtake of United States soda-ash to a maximum of 500
rather vague) was also
tonnes(cid:146). A promise (albeit
obtained from CWS to reduce its purchases of Polish
ash from TR which then stood at 5 000 tonnes per
year.

ICI obtained

(95)

(96)

for

that

To this end, Rockware was offered a (cid:145)top-slice(cid:146) rebate of
GBP 10 per tonne for offtake from 80 000 to 90 000
tonnes and GBP 22 per tonne for anything above
90 000 tonnes. This meant
the marginal
tonnage the effective cost to the customer offered by ICI
was only GBP 100,25 ex-works. It would appear that
considering
before
rationalizing its minor
suppliers and keeping only
General Chemical as a second source, but had assured
Brenntag on 8 November
there would be no
change in purchasing policy until at least the middle of
1989 and that it would receive adequate notice of any
such change.

this meeting Rockware was

that

a note

The result of the ICI offer however was that Rockware
agreed with ICI to cease all Polish purchases and to
keep the General Chemical volume constant at 7 000
tonnes. The Commercial Director of
ICI Soda Ash
congratulating the United
Products wrote
Kingdom sales manager for having (cid:145)snaffled(cid:146) the Polish
share at CWS. Brenntag was informed of the Rockware
decision but
expectation of
still maintained some
continuing to supply at least some tonnage. Deliveries
of ash from Brenntag continued for
two
months of 1989. ICI then met Rockware again on 28
February 1989. The ICI note of the meeting records
that: (cid:145)All Polish purchases will cease after today(cid:146). This is
in fact what occurred. Rockware wrote to Brenntag on
13 March 1989 confirming that instructions had already
been given two weeks previously to cease placing orders
with Brenntag
to
Rockware, continuing to do business with Brenntag
instead of ICI would have involved a (cid:145)penalty cost(cid:146) of
some GBP 100 000 (4 500 (cid:215) GBP 22). The letter to
Brenntag reads:
(cid:145)I fully realise the position this places
you in but you clearly understand that the commercial
offer we have received is impossible to refuse.(cid:146)

from 1 March. According

the first

as

(97)

ICI claimed that it was General Chemical and not itself
tonnage previously supplied by
which gained the
Brenntag to CWS. In fact General Chemical made no
special offer to Rockware and it did not obtain any of
the former CWS business.

(cid:151) CWS

(98)

to the takeover of

the CWS glassworks by
Prior
Rockware,
ICI was the main supplier of CWS, with
secondary sourcing from Allied and TR (as Brenntag

(cid:151) Redfearn

(99) Another customer, Redfearn, had indicated to ICI
it had an (cid:145)irrevocable commitment

in
1985 that
to
maintenance of a competitive pressure(cid:146) by taking some
tonnage from Allied. Again ICI made a particular point
of ascertaining Redfearn’s total requirements for each
involving a
year and then making an arrangement,
(cid:145)top-slice(cid:146) rebate, which would restrict
the purchases
from the second supplier to 2 500 tonnes per year.
Thus for 1986 it was agreed that:
(cid:145)RNG intend to
purchase not less than 42 500 tonnes of soda-ash from
ICI in 1986 out of a total budgeted purchase of 45 000
tonnes. All additional volume that you may possibly
require above the budgeted total will also be purchased
from ourselves.(cid:146)

(100) The arrangement

for 1987 provided that Redfearn
would purchase from ICI at least 45 000 tonnes out of
(i.e. some
its total expected usage of 47 500 tonnes,
95 % of
an added
inducement to purchase any marginal tonnage from ICI
in the form of a GBP 10 rebate.

requirement). There was

its

(101) Similar arrangements were made for 1988 and 1989.

(cid:151) Beatson Clarke

(102) Besides the (cid:145)top-slice(cid:146) rebate system,

ICI gave other
forms of rebate or allowance to glassmakers, including
(cid:145)import-substitutions(cid:146)
(cid:145)export-support(cid:146)
rebates. (These rebates are not the subject of the present
proceedings.)

rebates

and

(103)

In one case at least, Beatson Clarke, it was made clear to
the customer by ICI from 1985 onwards that not only
the top-slice rebate but also the other special allowances
were dependent upon the customer placing the whole
of its business with ICI each year.

(104) For example,

confirming that

for 1988 ICI wrote to Beatson Clarke
(cid:145)you intend to purchase your total

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requirements from ICI and an assumption of 16 000
tonnes equivalent has been considered when offering
the following support(cid:133)(cid:146).

Assessment of the defence argument

(105) An ICI note of a meeting with Beatson Clarke relating
to the 1988 negotiations reports that: (cid:145)I(cid:133) made it clear
that the offer was only for 100 % of their business. (The
Purchasing Manager of Beatson Clarke) equally made it
clear that he was prepared to commit 100 % of their
business and that as far as the competition went,
it
would only be used as a bargaining tool
if we got
completely out of line(cid:133)(cid:146)

(111)

(106) Later in the same note the author reports how he had
emphasized to Beatson Clarke (cid:145)the reward aspect for
placing all their business with ICI(cid:146).

(107)

ICI was in fact the sole supplier of soda-ash to Beatson
Clarke from 1985 up to the date of the investigations.

the modification of

ICI abandoned the practice of

(108) After the investigations in the present case were carried
(cid:145)top-slice(cid:146) rebates,
out,
while insisting that
its pricing
arrangements in no sense involved an admission that
the rebates in question constituted an infringement of
ICI’s own documentation shows however
Article 81.
that
rebate system was of
its
questionable legality: a note headed (cid:145)1989 Issues and
Objectives(cid:146) reads (cid:145)consider legality of
top-slicing and
alternatives(cid:146).

it was aware that

(112)

ICI’s principal factual arguments

(109)

it ever had a general

ICI denied that
strategy of
excluding a particular supplier or suppliers from the
market. The (cid:145)top-slice(cid:146) rebates were said not to have
been motivated by any exclusionary intent. According
to ICI, they were intended to (cid:145)encourage and support
growth(cid:146) and therefore had inevitably to be related to
quantities over and above the customer’s nominal or
(cid:145)core(cid:146)
tonnage. They were (ICI argued) conceived in
response to customer demands for a change in the
rebate structure and were negotiated on an individual
basis rather than pursuant to any plan. ICI pointed to
the continued presence of General Chemical
in the
market as proof
intend to eliminate
competition.

it did not

that

ICI

that

is made clear

ICI’s assertion that the top-slice rebates were not part of
an exclusionary plan is in direct contradiction with its
own internal documents.
its
It
intention was to exclude TR (Brenntag) entirely as a
supplier of dense (but not light) ash (recitals 66, 67 and
68). As for General Chemical, it was never alleged by
the Commission that
intended to eliminate this
producer entirely. The whole object was to ensure that a
second source of supply remained in the market but
one which sold at prices and in quantities which posed
no real competitive threat to its dominant position (see
recitals 66 to 70). The suggestion that the rebate system
developed in a haphazard way is also difficult
to
reconcile with ICI’s own documents, particularly the
memorandum which states
that an additional GBP
500 000 was available to finance the top-slice rebates
(cid:145)in order to ensure that the marginal tonnage sought by
is below GBP 112,26/tonne
all bulk
ex-works,
Chemical minimum-price
undertaking(cid:146) (recitals 77 and 78).

customers
the General

assertion apart

In relation to the claim that ICI was only reacting to
competition from Allied, there is no evidence to support
from an indication that,
this
in
ICI was led to believe that General
November 1988,
Chemical had offered a (cid:145)deep-top slice(cid:146)
to Rockware
with a view to picking up the Polish share of the former
CWS business (recitals 95 to 99). This offer
from
General Chemical would (cid:145)produce an average price close
to GBP 112/tonnes equivalent ex-store(cid:146). Even if it were
the case that on this occasion General Chemical offered
a special price to Rockware (and ICI appears in fact to
have been mistaken on this point) it does not provide
the explanation for ICI’s general policy of giving topslice
rebates to (cid:145)all major bulk customers(cid:146) for at least three
years prior to that date. ICI does not even appear to be
claiming that General Chemical offered special prices,
except to Rockware. According to its own documents it
believed that General Chemical’s pricing was at around
GBP 120 per tonne ex-store. But even in the single case
the
of Rockware,
General Chemical average price to Rockware was GBP
112,
it should itself need to give a top-slice rebate
which resulted in an effective price for the last 3 000
tonnes to be taken by Rockware from ICI of only GBP
100,25 per tonne.

is not able to explain why,

ICI

if

(110)

ICI also claimed that it was obliged to give a (cid:145)top-slice(cid:146)
rebate in one case (Rockware) because it had reason to
believe that Allied (later General Chemical) had done so
first.

(113)

In fact neither Allied nor its successor General Chemical
offered a special
rebate to Rockware, or
indeed to any other customer. Since November 1985 it
did not go below a list price of GBP 119 ex-works for

(cid:145)top-slice(cid:146)

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container glass manufacturers and gave no discounts off
this list price.

(114) The Commission therefore considers that the rationale
of the strategy of giving (cid:145)top-slice(cid:146) rebates was indeed
in ICI’s own
that which was explained in detail
documents.

(118)

and in any case to act largely in disregard of it so long
as such conduct does not act to its detriment’ (Judgment
in Case 85/76, Hoffmann-La Roche v Commission, points
38 and 39).

(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
position does not however
the producer
enjoying it
eliminated all possibility of
competition (see also Case 27/76, United Brands v
Commission (13), point 113).

the Court

to have

require

stated,

(119) The existence of a dominant position may depend upon
them necessarily

factors, none of

a combination of
controlling of itself.

(b) Relevant market

(120)

In order to determine whether an undertaking holds a
dominant position, it is necessary first of all to identify
the area of business in which conditions of competition
and the market power of
the allegedly dominant
undertaking fall to be assessed. This examination enables
the Commission to identify the actual and potential
competitors of the undertaking in question and other
constraints which may exist on the exercise of
its
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 (14)).

(121)

In the present case,
the particular abuses suspected
concerned the foreclosure by ICI of actual and potential
competition from other suppliers of soda-ash.

(122)

and

both

dense

produced

ICI
soda-ash.
light
Glassmakers almost all consume dense-ash, while for
chemical and metallurgical applications light-ash is the
preferred form. Although the competition which ICI
was aiming to exclude came principally from dense-ash,
to draw a strict boundary line
it would be artificial
between light- and dense-ash.
light-ash
ICI’s major
customers could switch to dense-ash with little capital
outlay and were also the subject of the (cid:145)top-slice(cid:146) rebate

(13)
(14)

[1978] ECR 207.
[1979] ECR 1869.

PART II

LEGAL ASSESSMENT

A. ARTICLE 82 OF THE TREATY

1. THE TERMS OF ARTICLE 82

(115) 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

(116)

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

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

meaning of Article 82,

(cid:151) whether the conduct alleged 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

to hinder

(117) The term (cid:145)dominant position(cid:146) is not defined in Article
Justice has however described a
82. The Court of
dominant position under that Article as a position of
economic strength enjoyed by an undertaking which
enables
the maintenance of effective
competition on the relevant market by allowing it to
its
behave to an appreciable extent
competitors and customers and ultimately of consumers.
Such a position does not preclude some competition(cid:133)
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,

independently of

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system. The relevant product market
in which ICI’s
market power (cid:151) in particular its ability to exclude
competitors (cid:151) falls to be assessed, may therefore fairly
be taken to include both light and dense soda-ash.

(iii)

improbability of

the
any (cid:145)new(cid:146) producer of
synthetic soda-ash entering the market and setting
up manufacturing facilities in the Community;

(123) For the purposes of assessing ICI’s market power, the
Community can be divided into two broad zones or
(cid:145)spheres of
the
other by ICI.

influence(cid:146), one dominated by Solvay,

(124) Conditions in the United Kingdom were, for the reasons
set out earlier both relatively homogenous and separate
from those prevailing in other Member States. ICI was
the sole national producer and neither Solvay nor the
other western European producers market their product
in its (cid:145)home(cid:146) territory. ICI’s important customers in the
Community were all located in the United Kingdom.

(iv)

ICI’s position as
supplier to all the major customers;

exclusive or nearly-exclusive

(v)

the perception by customers of General Chemical
and Brenntag as secondary suppliers only;

(vi)

the protection against United States and eastern
European producers afforded by the anti-dumping
measures;

(vii)

the pricing
Chemical by the anti-dumping undertakings;

constraints

imposed on General

(125) The appropriate product and geographical area in which
ICI’s economic power falls to be assessed is thus the
market for soda-ash in the United Kingdom.

(viii) ICI’s demonstrated ability over
maintain a higher price level
Member States;

the years
to
than in other

(126) The United Kingdom is a (cid:145)substantial part of
common market(cid:146) within the meaning of Article 82.

the

(ix)

the (cid:145)interdependence(cid:146) of major customers and ICI
and their shared perception of a community of
interest;

(c) Market power

(x)

the success of
ICI’s strategy of minimising the
presence and/or effectiveness of General Chemical
and Brenntag as competitors and maintaining its
predominant market share in the United Kingdom.

(127)

that

ICI’s own documentation recognises
it held a
dominant position in the United Kingdom. Its historic
market share of more than 90 % over the whole of the
period under consideration is in itself strong evidence of
a significant degree of market power. Market share,
while important, is however 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
in
question.

the market

(129)

(128) 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:

In assessing ICI’s market power, the Commission took
account of the possible substitutability of caustic soda
for
soda-ash and vice versa. 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. The reverse is also true:
soda-ash is in theory also an alternative for caustic soda
in some processes. In practice however the availability
of caustic soda did not constitute a substantial limitation
on ICI’s market power in the United Kingdom which
was
glass
on
manufacturers, few if any of which were likely to use
caustic soda in preference to soda-ash.

principally

supply

based

the

to

(i)

persistence

the
years
near-monopoly in the United Kingdom;

over many

of

ICI’s

(ii)

the absence of any competition from Solvay and
the other western European producers;

(130) 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

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15.1.2003

hand depends largely on the requirements of the paper
industry. The price of caustic soda was therefore (cid:151)
unlike soda-ash (cid:151) subject to considerable fluctuation.

3. ABUSE OF DOMINANT POSITION

(131) At the relevant time caustic soda was (cid:145)short(cid:146),

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

substantial

a

(137) 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 particularly identified as abusive in leading
cases (Case 40/73, Suiker Unie v Commission (15); Case
v Commission; Case
85/76, Hoffmann-La Roche
Industrie (cid:151)
322/81,
Michelin (16).
Decision
89/22/EEC (17), British Gypsum/BPB Industries.)

Nederlandsche
See

Commission

Banden

also

(132)

In the glass sector (cid:151) the main consumer of soda-ash (cid:151)
caustic soda substitution is even less likely than in
metallurgical and detergent applications. In theory up to
15 % of the alkali requirement of glassmakers may be
provided by caustic soda. Again, capital investment in
plant modification is required. In practice, none of the
United Kingdom glassmakers converted to caustic soda.

(138) The present case concerns the tying of customers to ICI
by means of a number of devices which all served the
same exclusionary purpose:
(cid:145)top-slice(cid:146) rebates, exclusive
requirements clauses and (in one case at least) making
other
financial benefits dependent on the customer
taking its total requirements from ICI.

(133)

(134)

should also be noted that

soda-ash
It
ICI, AKZO) between them made
producers (Solvay,
some one-third of
the caustic soda produced in the
Community. In the United Kingdom, ICI was the leading
producer of caustic soda.

the major

ICI also argued that the availability of cullet (recycled
broken glass) excluded its having a dominant position.
A customer’s requirement of soda-ash in glass container
manufacture could be reduced by up to 15 % by using
cullet and with appropriate technology the proportion
might be higher. It may well be that the cullet usage
lessens the dependence of customers upon the soda-ash
It does not however lessen the
suppliers in general.
ability of a powerful soda-ash producer
to exclude
smaller producers of that product.

(135) The possibilities of substitution did not therefore act as
ICI’s market power

a constraint on the exercise of
vis-(cid:224)-vis the other producers of soda-ash.

(136) On the

basis of

the
Commission concludes that at all material
times ICI
occupied a dominant position in the sense of Article 82.

considerations

above

the

(i) (cid:145)Top-slice rebates(cid:146)

(139)

It is obvious both from the nature of the system itself
and from the terms of ICI’s own internal documentation
that
the (cid:145)top-slice(cid:146) rebates were intended to exclude
effective competition by:

(cid:151) inducing customers to obtain from ICI the marginal
tonnage which might otherwise be obtained from a
second supplier;

(cid:151) minimising or neutralising the competitive impact
of General Chemical by containing its presence or
the market in terms of price, tonnage and customers
within limits that insured the continuance of ICI’s
effective monopoly;

(cid:151) eliminating Brenntag from the market or at least

minimising its competitive effect;

(15) [1975] ECR 1663.
(16) [1983] ECR 3465.
(17) OJ L 10, 13.1.1989, p. 50.

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(cid:151) minimising the risk of
of
traders

alternative
sister-producers,
producers;

sources

the customers turning to
from
other Community

supply whether
or

(cid:151) maintaining and reinforcing ICI’s virtual monopoly

of the United Kingdom market for soda-ash.

(140) The substantial variations in (cid:145)trigger(cid:146) tonnages at which
the rebate was activated at each customer demonstrates
that the top-slice rebate system and the price advantages
it conferred depended not upon differences in the cost
to ICI in relation to the quantities supplied but upon the
customer taking its marginal tonnage from ICI.

in order for such practices to fall
(141) There is no need,
under Article 82,
for a legal obligation or express
stipulation requiring the customer to obtain its supplies
exclusively from the dominant firm. It is sufficient if the
object or result of
the inducement offered is to tie
customers to the dominant producer.

(145) By making it

its business

to ascertain the

total
requirements of each major customer, ICI was able to
structure its (cid:145)top-slice(cid:146) rebate system in such a way as to
exclude or minimise the presence of competitors.
In
many cases an assurance was obtained from the
customer to reduce its competitive purchases or restrict
In the case of Beatson
them to a specified tonnage.
Clarke it was expressly stipulated that
the customer
obtain its total requirements from ICI.

(146) Such arrangements substantially restrict the contractual
freedom of the customer, prevent competitive entry, and
are tantamount to an exclusivity clause.

(147) The agreements with these major customers meant that
they were tied to ICI for substantially the whole of their
requirements
total
requirements) while the competitive effect of other
suppliers was minimised.

(and in one case at

least,

their

(iii) Other financial inducements

(ii) Exclusive requirements clauses and restrictions on

purchases from competitors

(148)

(142)

It is clearly established in law that where a dominant
undertaking ties customers (cid:151) even at their request (cid:151)
by an obligation or promise to obtain the whole or
substantially the whole of their requirements exclusively
an
from that
infringement of Article 82 (Hoffmann-La Roche v
Commission, paragraph 89).

undertaking,

this will

constitute

(143)

It
is irrelevant whether the obligation in question is
stipulated for without further qualification or whether it
is undertaken in consideration of the grant of a rebate.

(144) The possible anti-competitive effects of the stipulations
on quantities in ICI’s supply agreements have to be
ICI’s stated policy towards
assessed in the light of
the documents
General Chemical and Brenntag. As
discovered at
to
ICI show,
exclude all competitors entirely. It was in ICI’s interest
to ensure that General Chemical at least remained in the
United Kingdom market as a (cid:145)presence(cid:146) (cid:151) strictly
controlled as to both price and tonnage (cid:151) which met
the need of most
large customers for a secondary
supplier while in fact presenting no real competitive
threat to ICI’s near-monopoly position.

ICI was concerned not

In its dealings with Beatson Clarke,
ICI also made it
clear that the (cid:145)support package(cid:146) (18), additional to the
(cid:145)top-slice(cid:146) rebate, was dependent upon its agreeing to
take 100 % of its requirements from ICI, a condition
which was
special
(cid:145)inducement(cid:146) had the object and effect of reinforcing
excluding
ICI’s
competition.

in writing.

confirmed

customer

position

This

and

the

at

(149) All the above measures described in recitals 139 to 147
were intended to remove or restrict the opportunities of
other producers or suppliers of soda-ash to compete
with ICI. They have to be seen in the light of ICI’s
clearly expressed strategy of retaining a virtual (but not
100 % complete) monopoly of
the United Kingdom
market. They thus consolidated the dominant position
of ICI in a manner which was incompatible with the
concept of competition inherent in Article 82.

(150) The rebates did not reflect possible differences in costs
based on the tonnage supplied but were referable to
securing the whole or the largest possible percentage of
rebate
the
requirements. The
from
system thus
tonnage at
customer to customer as to the (cid:145)trigger(cid:146)

(cid:145)top-slice(cid:146)
involved considerable variations

customer’s

(18) The compatibility or otherwise of ICI’s (cid:145)support packages(cid:146) (import
substitution, export assistance) with Article 81 or Article 82 are
not the subject of the present proceedings. For the purposes of the
present case the Commission confines itself to the linkage between
the package and the customer’s total requirement.

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which it was activated. There were also differences in
the amount per tonne of the rebate itself, varying from
GBP 6 per tonne to GBP 30 or more.

undertakings participating in the infringement where,
either intentionally or negligently, they infringe Article
82. In fixing the amount of the fine, regard is to be had
to both the
the
and
infringement.

duration of

gravity

the

4. EFFECT UPON TRADE BETWEEN MEMBER STATES

1. GRAVITY

(151) Article 82 covers not only abuses which may directly
prejudice consumers but also those which indirectly
prejudice them by impairing the effective competitive
structure in the common market as envisaged by Article
3(g).

(156)

In the present case the Commission considers that the
infringements of Article 82 were of particular gravity.
They were part of a deliberate policy aimed at
consolidating ICI’s control over the United Kingdom
soda-ash market in a manner which was in fundamental
conflict with the basic objectives of the Treaty. Further,
they were specifically directed at restricting or damaging
the business of particular competitors.

rather

and Poland)

(152) The measures taken by ICI to ensure the continuance of
its dominant position and effective monopoly in the
United Kingdom were aimed in the first place at direct
competition from outside the Community (the United
than other Community
States
producers. However the (cid:145)top-slice(cid:146) rebates and other
exclusionary devices have to be examined in the overall
the phenomenon of strict separation of
context of
national markets in the Community.
ICI’s documents
the
stress
continued but limited presence on the United Kingdom
market of a single American producer as a (cid:145)second
supplier(cid:146) which
the
could
anti-dumping measures.

strategy called for

commercial

through

control

that

ICI

its

(153)

ICI was thus particularly anxious that General Chemical
should remain in the United Kingdom as an (cid:145)alternative(cid:146):
had it left the market entirely, the customers might have
been encouraged to look for alternative and possibly
cheaper
supply in continental western
Europe.

sources of

(154) Furthermore, the fact that the competition at which the
conduct of
ICI was particularly directed came from
outside the Community did not exclude an appreciable
States. The
effect upon trade
maintenance
ICI’s dominant
position in the United Kingdom affected the whole
structure of competition in the common market and
status quo, based on marked
ensured that
separation, would be maintained.

and reinforcement of

between Member

the

B. ARTICLE 15(2) OF REGULATION No 17

(155) 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
the
in the preceding business

each of

year of

(157) By foreclosing for a long time sales opportunities for all
competitors, ICI caused lasting damage to the structure
detriment of
of
consumers.

the market

concerned,

to the

(158)

(159)

ICI was well aware from its extensive negotiations with
the
the Commission between 1980 and 1982 of
requirements of Article 82. The introduction of
the
top-slice rebates in about 1983 followed not long after
specific assurances had been given to the Commission
to
by ICI
customers to take the whole or a quantity close to the
whole of their requirements of soda-ash from ICI.

it offered no special

inducements

that

ICI has been the subject on several previous occasions
fines imposed by the Commission for
of substantial
collusive
industry:
dyestuffs; polypropylene; PVC.

arrangements

chemical

in the

2. DURATION

(160) The infringement 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 at
least up to the end of 1989.

(161) The Commission takes into account the fact that ICI
abandoned the system of top-slice rebates with effect
from 1 January 1990.

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

(162) On 19 December 1990 the Commission adopted
Decision 91/300/EEC in the present case pursuant to

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L 10/49

that

finding

Article 86 of
an
the EEC Treaty
infringement had been committed by ICI and imposing
a fine of EUR 10 million. The decision was notified to
the undertaking by registered letter of 1 March 1991.
ICI applied to the Court of First Instance on 14 May
1991 for the annulment of the decision. On 2 April
1992 ICI lodged a supplement to its application putting
forward a new plea in law to the effect that the decision
should be declared non-existent following the judgment
of the Court of First Instance of 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 (cid:150) BASF and others v Commission (19). The Court
of Justice ruled on the Commission’s appeal against that
judgment on 15 June 1994 in Case C-137/92P,
Commission v BASF and others (20) and annulled the
decision on the ground that the Commission had not
complied with Article 12 of the version of its Rules of
Procedure in force at
time, which required the
decision to be authenticated in the authentic language
versions by the signatures of
the President and the
Secretary-General.

that

(163)

concerning Decision

In its judgment of 29 June 1995 in Case T-37/91, ICI v
Commission (21)
91/300/EEC
adopted in the present case on 19 December 1990, the
Court of First Instance held that the new plea of ICI was
admissible and, having found that
the
contested decision had not been authenticated before it
was notified, annulled the decision for infringement of
an essential procedural requirement within the meaning
of Article 173 of the Treaty (now, after amendment,
Article 230).

the text of

The Commission appealed to the Court of
Justice
against this judgment. The Court of Justice dismissed the
Commission’s appeal in its judgment of 6 April 2000,
Case C-286/95 P (22).

((cid:145)PVC II(cid:146))

(164) The Court of First Instance has held in Joined Cases
T-305/94, T-306/94, T-307/94, T-313/94, T-314/94,
T-315/94, T-316/94, T-318/94, T-325/94, T-328/94,
T-329/94, T-329/94 and T-335/94 LVM and Others v
Commission (23)
the Commission is
entitled to re-adopt a decision which has been annulled
for purely procedural defects. A new decision may in
the circumstances be adopted without conducting a
fresh administrative procedure. The Commission is not
required to hold a new oral Hearing if the text of the
new decision does not contain any new objections
besides
decision.
Furthermore, the rights of defence of the undertakings

in the original

set out

those

that

(19) [1992] ECR II-315.
(20) [1994] ECR I-2555.
(21) [1995] ECR II-1901.
(22) [2000] I-2341
(23) [1999] ECR II-931.

concerned are not
infringed if
adopted within a reasonable time.

the new decision is

(165) The Court of

First

also confirmed the
Instance
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 (24).

to

(166) Under Regulation (EEC) No 2988/74, the power of the
Commission
substantive
impose
infringement of the rules of competition 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 (which in the
present case was 31 December 1989).

fines

for

interrupts

(167) Under Article 2 of Regulation (EEC) No 2988/74, any
action taken by the Commission for the purpose of the
preliminary investigation or proceedings in respect of an
in
the
infringement
limitation
limitation period is
proceedings. Where
thus
interrupted,
running afresh with each
interruption, but the imposition of a fine is definitively
time-barred on the day on which a period equal to
twice the limitation period has elapsed without
the
Commission imposing a fine, i.e. 10 years from date on
which the violation ceased.

the
starts

period

time

(168) Article 2(1) of Regulation (EEC) No 2988/74 identifies
certain actions by the Commission which interrupts the
limitation period, including notification of a statement
of objections. The list is not exhaustive. The Court of
First
the
Instance left open the question whether
adoption of the annulled decision itself constituted an
the
limitation,
action
notification of
is
taken as the last action which would start time running
again under Article 2, the Commission would have had
until 13 March 1995 to adopt its decision.

the statement of objections to ICI

interrupting

even

but

if

(169) That time-limit has to be extended by the period during
which proceedings against the decision were pending
before the Court. Article 3 of Regulation (EEC) No
2988/74 provides
in
proceedings is to be suspended for as long as the
of
decision of
proceedings pending before the Court of Justice (which
for these purposes includes the Court of First Instance).

the Commission is

limitation period

subject

that

the

the

(24) OJ L 319, 29.11.1974, p. 1.

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(170) As the Court of First Instance stated at point 1098 of its
PVC II judgment, Article 3 is specifically intended to
apply to the case where the decision finding the
infringement and imposing a fine is annulled. The
limitation period is thus suspended for as long as
Decision 91/300/EEC was the subject of proceedings
pending before the Court of First Instance and the Court
of Justice.

(171)

In the present case, ICI’s application was lodged at the
Instance on 14 May 1991 and the
Court of First
judgment was delivered on 29 June 1995. The
Commission’s appeal to the Court of Justice was filed on
30 August 1995 and the final judgment was rendered
on 6 April 2000. Even if
the time which elapsed
between the judgment of the Court of First Instance and
the Court of
is
Justice being seized of
disregarded, the limitation period was suspended for a
minimum period of eight years, eight months and 22
days.

the appeal

(172)

If this period of suspension is added to the time-limit
which expired on 13 March 1995, the Commission has
until the end of 2003 to re-adopt the annulled Decision.

HAS ADOPTED THIS DECISION:

(c)

in one case at least making the granting of rebates and
other financial benefits dependent upon the customers
agreeing to buy the whole of its requirements from ICI.

Article 2

A fine of EUR 10 million is imposed on ICI in respect of the
infringement specified in Article 1.

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

Account No 642-0029000-95
European Commission
Banco Bilbao Vizcaya Argentaria (BBVA)
SWIFT Code: BBVABEBB (cid:150) IBAN Code: BE76 6420 0290 0095
Avenue des Arts/Kunstlaan, 43
B-1040 Brussels.

that period,

After expiry of
interest shall automatically be
payable at the interest rate applied by the European Central
Bank to its main refinancing operations on the first working
day of the month in which this Decision is adopted plus 3,50
percentage points, namely 8,32 %.

Article 1

Article 3

Imperial Chemical Industries plc (ICI) infringed Article 86 of
the EEC Treaty (now Article 82 of the EC Treaty) from about
1983 until at least the end of 1989 by a course of conduct
severely limiting competition and
aimed at excluding or
consisting of:

This Decision is addressed to Imperial Chemical Industries plc,
9 Millbank, London SW1P 3JF, United Kingdom.

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

(a) granting

substantial

rebates

inducements referable to marginal
that
ensure
requirements from ICI;

customers buy

and

other

financial
tonnage in order to
their

all or most of

Done at Brussels, 13 December 2000.

(b) securing the agreement of customers to buy the whole or
substantially the whole of
their requirements from ICI
and/or to restrict their purchases of competitive material to
a specified tonnage;

For the Commission

Mario MONTI

Member of the Commission