2004/285/EC: Commission Decision of 19 June 2002 pursuant to Article 14 of Council Regulation (EEC) No 4064/89 imposing fines on an undertaking for supplying incorrect and misleading information in a notification in merger control proceedings (Case No COMP/M.2624 — BP/Erdölchemie) (Text with EEA relevance) (notified under document number C(2002) 2208)
Date: 2002-06-19
Institutions: European Commission
Subjects: competition, economic concentration, exchange of information, merger control, oil industry

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 19 June 2002

pursuant to Article 14 of Council Regulation (EEC) No 4064/89 imposing fines on an undertaking
for supplying incorrect and misleading information in a notification in merger control proceedings

(Case No COMP/M.2624 — BP/Erdölchemie)

(notified under document number C(2002) 2208)

(Only the English text is authentic)

(Text with EEA relevance)

(2004/285/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

which it acquires within the meaning of Article 3(1)(b)
of the Merger Regulation sole control of the undertaking
Erdölchemie GmbH (EC) (4).

Having regard to the Agreement on the European Economic
Area,

(2)

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

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

Having regard to the opinion of the Advisory Committee on
Concentrations (3),

Having regard to the final report of the Hearing Officer in this
case (3),

Whereas:

I. THE PARTIES AND THE TRANSACTION

(3)

(1)

On 23 February 2001 the Commission received a notifi-
cation pursuant to Article 4 of Regulation (EEC) No
4064/89 (the Merger Regulation) from Deutsche BP AG
(Deutsche BP) of a proposed concentration in the chemi-
cals industry (case COMP/M.2345-BP/Erdölchemie), by

(1) OJ L 395, 30.12.1989, p. 1; corrected version in OJ L 257,

21.9.1990, p. 13.

(2) OJ L 180, 9.7.1997, p. 1.
(3) OJ C 79, 30.3.2004.

Deutsche BP is a German subsidiary of BP plc (BP), the
holding company of a multinational oil exploration,
petroleum and petrochemical group. EC is a manufac-
turer and seller of petrochemicals with manufacturing
facilities at Cologne in Germany, which was initially
established as a joint venture jointly controlled by Bayer
AG and BP via Deutsche BP. The transaction therefore
consisted of a change from joint to sole control.

II. PROCEDURE

One of the chemical products where according to the
notification the horizontal overlaps between the parties
would lead to an affected market was acrylonitrile
(ACN). The notification was declared incomplete on 21
March 2001, due to lacking information on ACN tech-
nology licensing, ACN catalyst and the ACN supply/
demand situation and trade flows world-wide. After the
parties had provided additional
information regarding
Form CO sections 4, 7 and 8 for ACN technology and
the
catalyst

information

requested

and

the

on

(4) OJ C 71, 3.3.2001, p. 22.

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(4)

(5)

ACN market, the notification was declared complete on
22 March 2001. On 26 April 2001, the Commission
declared the concentration compatible with the common
market and the functioning of
the EEA agreement
pursuant to Article 6(1)(b) of the Merger Regulation (1).

that

It became apparent
the notification made by
Deutsche BP contained misleading and incorrect infor-
mation as regards three issues related to the product
ACN: (i) BP's agreements with ACN competitors […] (*),
(ii) BP's activities in ACN technology licensing, and (iii)
BP's activities in ACN catalyst. In its Statement of Objec-
tions of 23 November 2001, the Commission communi-
cated its preliminary view that Deutsche BP negligently
supplied incorrect and misleading information in a noti-
fication pursuant to Article 4 of the Merger Regulation,
and that a fine should be imposed on Deutsche BP in
accordance with Article 14(1)(b) and Article 14(3) of the
Merger Regulation. Deutsche BP submitted its comments
on the Statement of Objections on 7 March 2002.

III. RELEVANT FACTS

1. Information on BP's cooperation agreements

with […]* competitors

(a) The information given in the notification

Under the heading ‘Cooperative agreements’, the Form
CO, which specifies the information to be provided in a
merger notification pursuant to Article 3(1) of Commis-
sion Regulation (EC) No 447/98 of 1 March 1998 on
the notifications, time limits and hearings provided for
in Council Regulation (EEC) No 4064/89 on the control
of concentrations between undertakings (2),
in section
‘To what extent do
8.11 asks the following question:
cooperative agreements (horizontal or vertical) exist in
the affected markets?’. The answer submitted in the
parties notification (page 51) with regard to ACN reads
as follows:

acrylonitrile

as
regards
the horizontal

‘The Parties are not aware of any significant cooperative
arrangements
in the EEA.
However, at
level, various producers
sometimes exchange material geographically so as to
reduce distribution costs
(for example, Erdölchemie
currently exchanges c.[…]* kt (kilotonnes) of acryloni-
trile p.a. with BP within the EEA). The only significant
vertical arrangements are the captive propylene positions
and forward integration outlined in section 7.8, above.’

(6)

In section 8.12 the Form CO asks for the following
information:
‘Give details of the most important coop-
erative agreements engaged in by the parties to the

(1) OJ C 174, 19.6.2001, p. 5.
(*) Parts of this text have been edited to ensure that confidential infor-
mation is not disclosed; those parts are enclosed in square brackets
and marked with an asterisk.

(2) OJ L 61, 2.3.1998, p. 1.

concentration in the affected markets, such as research
and development, licensing, joint production, specialisa-
long-term supply and exchange of
tion, distribution,
information agreements’. The parties
submitted the
following answer with regard to ACN in their notifica-
tion (p. 52):

‘Not applicable.’

(7)

The parties provided no information on cooperation
agreements with competitors as regards ACN in other
sections in the Form CO. In section 6 concerning the
relevant geographical market definition (p. 19),
they
stated: ‘The parties consider the appropriate geographical
market definition for acrylonitrile to be worldwide …’.

(b) Result of the investigation

(8)

(9)

Inc.

In reply to the general question in a letter under Article
11 of the Merger Regulation (‘Article 11 letter’) asking
the operation on the market’, a
for ‘the impact of
competitor informed the Commission that BP and Ster-
ling Chemicals
another major US
(Sterling),
producer (BP's ACN plants are located in the United
States of America) have an ACN export joint venture,
called Anexco. On 8 March (17.49 h) the Commission
thereupon sent an e-mail to the lawyers representing BP
and Deutsche BP (BP's lawyers) stating: ‘We understand
that BP has a joint acrylonitrile export company
(Anexco) in partnership with Sterling, another major US
producer. This is, to my understanding, not mentioned
in the Form CO. Please supply all relevant information
as to this company, the impact of Sterling on the market
and all other elements that may have an influence on
the Commission's assessment as to the consequences of
the merger.’

The existence of that joint venture with Sterling was
confirmed by BP's lawyers in a fax dated 12 March
2001. It was specified that this joint venture sells BP and
Sterling ACN in regions outside North America and
Europe and therefore is not active in Europe. However,
it was stated that BP also has a non-exclusive distribution
agreement with Sterling, by which BP sells up to […]* kt
per annum of ACN to Europe and Turkey. In its submis-
sion, BP's lawyers referred to the fact that this had been
previously brought to the Commission's attention. The
agreements with Sterling had been notified to the
Commission under the antitrust-provisions according to
Form A/B in April 1998 (case IV/E-2/37.035-BP-Ster-
ling). The Commission issued a negative clearance type
comfort letter on 1 June 1999.

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(10)

In a telephone conference on 15 March, the Commission
asked BP's lawyers to provide information on any links
with other […]* suppliers. In their written reply to that
question of March 16, BP's lawyers indicated (p. 6) that
BP:

‘has no joint venture and/or distribution agreements
with any [other producer]*, with exception of the links
with Sterling set out in BP's fax of March 12. […]
However, BP does [have an arrangement with another
producer affecting exports to Europe]*’

(11)

By telephone and e-mail (16.56 h) on 19 March, the
Commission requested further information about
the
quantities involved and the duration of the arrangement
with […]*.
In the reply to those questions dated 19
March, BP's lawyers indicated that [details of the arrange-
ment which limit the producer's ability to independently
export ACN to Europe]*

(12) According to the [arrangement, …]*.

(13)

The potential of
[…]* producers to supply ACN to
Europe was an important element for the assessment of
BP's competitive position on the market for ACN. The
USA is the main exporting region for ACN due to signif-
icant excess capacity in relation to local demand. BP's
sales of ACN in Europe are entirely based on imports
from its production sites in the USA. [Sterling is one of
the largest merchant sellers in the US following the
market leader BP with a market share of around 20 %
(BP: 35 %). It is therefore an important potential compe-
titor of BP for ACN sales into Europe. The agreement
significantly limits its potential to actively compete with
BP in Europe. All its material sold into Western Europe
went through the agreement, i.e. was marketed by BP,
except for some marginal sales below 5 kt which Ster-
ling marketed directly]*. The [arrangement with …]*
gives BP a large measure of control over […]* exports to
Europe. […]*

(14)

In conclusion, there were two important cooperation
[arrangements]* for ACN between BP and [ACN produ-
cers]*. No reference was made to these [arrangements]*
in the Form CO.

markets as relevant product markets where ‘one or more
of the parties to the concentration are engaged in busi-
ness activities in a product market, which is upstream or
downstream of a product market in which any other
party to the concentration is engaged, and any of their
individual or combined market shares is 25 % or more
[…]’.

(16)

(17)

(d) of

Section 8.9 of the Form CO requires the parties to
describe the various factors influencing market entry. In
point
information is
requested on ‘the extent to which each of the parties to
the concentration are licensees or licensors of patents,
know-how and other rights in the relevant markets.’

section, particular

that

BP's position in the licensing of ACN production tech-
nology, which has to be considered as being upstream of
ACN production activities, is not explained in the notifi-
cation, neither as an affected market nor in section 8.9
nor elsewhere.
submission under
section 8.9, technology is mentioned as one of the rele-
vant entry factors and it is indicated that:

In Deutsche BP's

‘the necessary technology can be readily purchased via
license from various ACN producers (e.g. Asahi, BP,
Solutia, DuPont, various Chinese licensors and others).
These licensors carry on active licensing programs and
availability of technology and intellectual property rights
do not constrain entry into ACN production.’

(b) Result of the investigation

(18)

In reply to an Article 11 letter, a competitor informed
the Commission that BP was the most important seller
of technology for the production of ACN. After this
issue was raised with BP's lawyers in a telephone confer-
ence on 13 March 2001, they submitted a memo in that
regard dated 14 March 2001, stating that:

‘of total installed ACN capacity today, 85 to 90 % of the
underlying technology was originally licensed by BP.’

2. Information on BP's activities as regards ACN

(19)

technology licensing

(a) Information given in the notification

(15)

Section 6.1 of the Form CO requires the parties to iden-
tify each affected market, and in Sections 7 and 8
detailed information has to be provided with regard to
these markets. Section 6III(b) defines vertically affected

Further submissions by BP's lawyers, including additional
Form CO sections 4, 7 and 8 as regards ACN technology
licensing, and the Commission's investigation revealed
that until 1994, BP had a monopoly in the licensing of
ACN technology. After that date, three world-scale ACN
production plants have been built by Solutia, Tae Kwang
and Formosa Plastic. Formosa obtained its technology
licence from BP. Solutia developed its own production
technology and built its plant on its own technology
without
the need for third party licences. The Tae
Kwang plant is based on Solutia's technology and the
licence was obtained in 1995 from Solutia. [BP did not

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L 91/43

offer its technology to Tae Kwang]* In addition, an
earlier BP licence to Formosa granted on 10 June 1987
[…]* BP's licence to the South African producer Sasol
gave BP a first option to buy their exports, and BP actu-
ally marketed Sasol's exports of […]* until production at
the Sasol plant was stopped.

‘R & D is not critical to entry into, or continued opera-
tion on acrylonitrile markets.
there are
many suppliers of catalyst technology (eg. Nitto, Asahi,
DuPont, Solutia, etc)...’.

In particular,

(20) With regard to the licensing activities of

the

the other
companies mentioned by Deutsche BP as source of ACN
technology licences,
investigation revealed the
following: At the time of the investigation, DuPont was
not active in third party licensing, and considered any
information on that issue submitted to the Commission
in reply to an Article 11 letter as business secrets. Asahi
had so far only licensed out its technology to its joint
ventures or subsidiaries and to Sinopec (China) for three
small-scale plants, of which only one is in operation
today. In addition, Asahi's licences in China were part of
a cooperation agreement between BP and Asahi for the
joint licensing of acrylonitrile technology in China. The
‘Chinese licensors’ mentioned in the Form CO relates to
Sinopec that offers its ACN technology on its website,
but had not licensed a single plant. Sinopec is also a
joint-venture partner of BP with regard to a possible
licence for a new plant in China and has taken licences
from Asahi for three small-scale plants.

(21)

Thus, the notification omitted relevant information and
did not accurately describe BP's position as regards ACN
technology licensing.

3. Information on BP's activities as regards ACN

catalyst

(22) A catalyst

is an essential processing input

in ACN
production as
and
ammonia feedstock materials produce ACN. Catalysts
are sold on the market and constitute a separate product
market.

the propylene

ensures

that

it

(a) Information given in the notification

(23) ACN catalyst was not identified as a (vertically) affected
market within the meaning of section 6 III (b) of the
Form CO. BP's activities
in ACN catalyst are not
mentioned at all in the Form CO. The only mention to
ACN catalysts in the notification is in Section 8.10
(concerning the importance of research and develop-
ment) where it is stated that:

(b) Result of the investigation

(24) Again, in reply to a general question in an Article 11
letter, a competitor informed the Commission that BP is
a leading catalyst seller. After this issue was raised with
BP's lawyers in a telephone conference on 13 March
2001, BP's lawyers submitted in a paper dated 14 March
2001, that:

‘… catalyst for new ACN plants will typically initially be
bought from the technology licensor …. BP estimates
that at present only [55 to 65 %]* of all ACN units
worldwide … still use BP catalysts.’

(25)

In their complementary sections 4, 7 and 8 of Form CO
the
on ACN catalyst which were submitted after
Commission had declared the notification incomplete,
the parties indicate that BP accounted for [65 to 75 %]*
of the worldwide merchant market for ACN catalyst in
1997 and they estimate BP's share to be [70 to 80 %]*
in 2001. These figures had been largely confirmed by
the Commission's market investigation. As regards BP's
competitors,
the investigation revealed the following:
DuPont does not offer its own type of catalyst, but is
only active in regenerating used catalysts. In the view of
customers, regenerated catalyst does not allow for the
same plant performance as new catalyst. Solutia's cata-
lyst is radioactive and according to market participants
only operates with its own technology. Asahi only
entered the merchant business at the beginning of 2001.
Until 31 December 2000, BP had the exclusive right to
sell Asahi catalyst worldwide (except for Asahi tech-
nology licensees and sales in Japan, Taiwan, Korea and
China, which required Asahi's approval). BP had rights
to all information disclosed by Asahi on catalysts during
the term of the agreement, including developments on
Asahi's new catalyst that it is now marketing alone. In
addition, BP and Asahi have an ongoing cooperation
agreement for catalyst sales in China. Sinopec has so far
sold its catalyst only in China. BP's most
important
competitor is Mitsubishi
(formerly called Nitto). […]*.
Only Mitsubishi and Asahi catalysts are fully compatible
with BP's technology, i.e. they can be used as a [change
out/replacement]* catalyst even if the plant initially was
installed and run based on BP catalyst.

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(26)

Thus, the notification did not mention BP's position in
the catalyst market, and did not describe the market
situation properly.

IV. ASSESSMENT UNDER ARTICLE 14 OF THE MERGER

REGULATION

(27) Under Article 14(1)(b) of

the Merger Regulation the
from
Commission may by decision impose
EUR 1 000 to 50 000 where,
intentionally or negli-
gently, an undertaking supplies incorrect or misleading
information in a notification pursuant to Article 4.

fines

1. Incorrectness of the information on cooperation

agreements

The possibility for competitors to export material is a
major element for the Commission to assess the geogra-
phical scope of
the relevant markets as well as the
competitive impact of the transaction in the common
market. Deutsche BP submitted in the Form CO that
there were no cooperation agreements as regards ACN.
This proved to be incorrect, as BP had entered into
agreements as described in recitals 8 to 13 with […]*,
which affected their ability to export ACN to Europe
and other destinations, and to compete there with BP. In
particular as Deutsche BP argued that
the relevant
geographical market
for ACN was worldwide, agree-
ments in all parts of the world […]* had to be disclosed
in the notification. It therefore has to be concluded that
the
information on ACN cooperation agreements
provided in the Form CO was incorrect.

submits that it had good reason to believe that DuPont
was an active licensor, as according to an article in an
industry publication (Chemicals Week) of June 1998, a
DuPont manager
announced the opening up of
DuPont's 25 speciality chemicals businesses to licensing
including, inter alia, the ACN process. From this article,
no conclusions can be drawn as regards the actual status
of DuPont's ACN licensing business at the time of the
notification. An article published two and a half years
before the notification, and in which only the ambitions
and business plans of a company are reported, cannot
support the statement in the notification that the tech-
nology was readily available from DuPont. Furthermore,
there were not ‘various Chinese licensors’ as submitted
in the notification, but only one theoretically (Sinopec),
which at the time had not granted any licence. The
failure to mention the limitation of Asahi's activities to
own plants and China and the fact that it has a coopera-
tion agreement with BP for China has to be considered
as at least misleading, as it gives the impression that
Asahi is active without any geographic restrictions and
completely independently from BP. It therefore has to be
concluded that the information provided in the Form
CO on ACN technology was
least
misleading.

incorrect or at

3. Incorrect or at least misleading character of the

information provided on ACN catalyst

2. Incorrect or at least misleading character of the

information provided on ACN licensing

(30)

The possible control of upstream markets like the ACN
process technology market is an important aspect in
assessing a party's position on a relevant market. BP's
strong position in ACN licensing was not mentioned at
all in the Form CO. The parties omitted to identify ACN
technology licensing as a vertically affected market, and
to provide the respective information required in the
Form CO. The (little) information on ACN licensing gave
a distorted picture of
the true facts, as it gave the
impression that BP was active with a market share below
25 % among several other competitors well established
and highly active (in section 8.9 BP refers to ‘active
licensing programs’) in the licensing market. This proved
to be incorrect or at least misleading. BP was and still is
the world-leader in ACN licensing. DuPont was not
in ACN technology licensing. Deutsche BP
active

The catalyst market has to be considered as a market
upstream of BP's ACN production activities which is
important for the assessment of their position on that
latter market. It was not mentioned at all in the notifica-
tion that BP is active in ACN catalyst. Again, the parties
omitted to identify a vertically affected market. The
limited information given on ACN catalyst gave the
impression that BP was not active and that there were
several other competitors well established and indepen-
dently active on the catalyst market. This proved to be
incorrect or at least misleading. BP was and still is the
world-leader
in ACN catalyst sales with over 70 %
market share. DuPont was not active on the market for
new catalyst. In not mentioning the former and ongoing
links between BP and Asahi, Deutsche BP omitted
important
information for the assessment of Asahi's
potential as BP's competitor. The same applies to BP's
relation to Mitsubishi.
In conclusion, the information
submitted in the notification on ACN catalyst has to be
considered as incorrect or at least misleading.

(28)

(29)

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4. Negligence

(31)

In its reply to the Commission's Statement of Objections,
Deutsche BP takes the view that the failure to supply the
relevant information has not been negligent, or at least
that there was only a very low degree of negligence.
Deutsche BP explains the omissions in the notification as
follows: The omissions are mainly a result of internal
communication and coordination problems and are
related to the participation of several individuals from
different BP units and from outside BP at the preparation
and the drafting of the notification. The central unit
which started the drafting of the notification requested
the information according to the Form CO from the
relevant business unit, which was located in the USA.
This was done apparently without explaining to the
necessary extent
the different notions and technical
terms in the Form CO, and the relevance of certain busi-
ness relations for a competition assessment under the
Merger Regulation.

in the
these agreements form an important element
assessment of the parties' position and the independence
of their competitors. The availability of imports and the
ability of outside competitors to put products on the
market in Europe independently is an important element
of the assessment, which must have been evident for
Deutsche BP. The relevance of the missing information
is independent of
the geographical market definition
finally applied. The relevant questions in section 8 of the
Form CO do not contain any geographical
limitation,
and answers to this section should cover all parts of the
world, in particular if the parties defend a world-wide
market definition. Links between competitors are a rele-
vant element of the competitive analysis on a Europe-
wide as well as on an worldwide market. Therefore,
Deutsche BP's argument that the omission resulted from
the fact that in the course of preparing the notification,
they changed their market definition for ACN from
Europe-wide to worldwide, but accidentally failed to
adjust section 8 of Form CO accordingly, is not such as
to eliminate the negligent character of the omission.

(32)

Consequently, according to Deutsche BP, the agreement
with the US producer Sterling and […]* were not
mentioned because initially the parties
intended to
propose a Europe-wide market definition for ACN, and
relations with […]* producers [in other geographical
regions]* therefore had not been considered relevant.
When it was decided to shift to a worldwide market defi-
nition, the section of the Form CO on agreements was
not amended accordingly.

(36)

(33) As regards ACN technology and catalyst, Deutsche BP
submits that the product experts preparing the Form CO
did not consider these activities as ‘products up- or
downstream’ of ACN in the sense of the Form CO. Busi-
ness people tend to interpret this term as input raw
materials (such as propylene and ammonia in the case of
ACN), rather than technology. According to Deutsche
BP, these initial misunderstandings remained undiscov-
ered during the whole drafting process.

(34) Deutsche BP finally submits that the organisation put in
place by BP (i.e. gathering information by sending the
precise wording of the relevant sections of the Form CO
to the respective business units in good time, appointing
specialist external counsel and making every effort to
follow the Commission/ECLF Best Practice Guidelines (1))
was reasonable and generally should have been sufficient
to avoid any shortcomings in the preparation of the
notification. Deutsche BP thus takes the view that the
incompleteness is not due to an organisational negli-
gence, but to an exceptional set of unfortunate circum-
stances in an isolated case.

(35)

There are no indications that Deutsche BP acted inten-
tionally. However, the Commission takes the view that
the provision of the incorrect and misleading informa-
tion was committed negligently. As regards the coopera-
tion agreements, the questions in the Form CO are clear
and precise. Deutsche BP must have been aware that

The fact that the agreement with Sterling had been noti-
fied to the Commission previously under Article 81 of
the Treaty according to Form A/B supports the Commis-
sion's conclusion that Deutsche BP had no intention to
hide any information from the Commission. However, it
does not establish that there was no negligence. The
Form CO requires the parties to submit a complete and
comprehensive set of information including all aspects
relevant for the assessment of the concentration. The
fact that some information might have been brought to
the attention of the Commission in another procedure
or framework does not reduce the obligation of the
parties to complete all chapters of the Form CO in full.
Moreover, the parties did not even include a reference to
the former procedure in the notification.

that

is clearly laid out

their business units

(37) As regards ACN technology and catalyst, the definition
in
of a vertically affected market
section 6 III (b) of the Form CO. The submission of the
parties
involved did not
consider technology licensing and catalyst as a ‘product
market’ in the sense of section 6 of the Form CO, but
only considered chemicals up- or downstream of ACN,
is only of limited relevance and does not establish that
It is well established in the
there was no negligence.
Commission's case law that
technology licensing can
constitute a distinct product market. In particular, in the
Dow Chemical/Union Carbide case (2), the Commission
extensively considered the market for polyethylene tech-
nology licensing. BP was an active participant in the
Commission's investigation in that case. Although the
case concerned a different product (polyethylene), it did
not contain any indications that the approach as regards
technology licensing had to be limited to this specific
product and was not applicable to other chemicals.

(1) http://europa.eu.int/comm/competition/mergers/others/best_practi-

(2) Commission Decision 2001/684/EC in Case No. Comp/M.1671, OJ

ce_gl.html

L 245, 14.9.2001, p.1, at recitals 74-95.

(38)

(39)

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for

The argument is even less acceptable as regards ACN
catalyst, as this is a distinct chemical product, which is
necessary as an additive for
the ACN production
process. The fact that Deutsche BP was aware of the rele-
vance of
the
technology licensing and catalyst
competitive assessment is also shown by the fact that it
was mentioned in the Form CO under the headings
entry barriers and relevance of R&D, although in an
incorrect or at
least misleading way. Furthermore,
Deutsche BP could not have been unaware of BP's very
strong position with regard to these two markets.
Finally, it has to be mentioned that Deutsche BP is part
of a multinational company with a large record of notifi-
cations to the Commission including in the chemicals
sector, and therefore has an extensive experience in
merger review procedures and the interpretation of the
Form CO.

missing issues were brought to the Commission's atten-
tion immediately by third parties at a very early stage of
the investigation.

(41)

In terms of the degree of negligence, it has, however, to
be taken into account that ACN was not the sole focus
of
the
the case. The Commission acknowledges that
present transaction affected a large number of different
chemicals which had to be discussed in the notification,
ACN being only one of them.

(42) Against this background,

it has to be concluded that
Deutsche BP acted negligently in submitting the incor-
rect and misleading information, and that the negligence
was of a considerable degree.

the present case showed that

Finally, the Commission cannot accept Deutsche BP's
argument that there was no negligence due to the sound
process and organisation of BP with regard to the
preparation of merger notifications and the unfortunate
and exceptional character of
the present case. The
Commission acknowledges that so far the members of
the BP group have a satisfactory record of merger notifi-
cations. However,
the
procedures applied by BP and Deutsche BP in the
present case, which according to BP and Deutsche BP
deviated from their usual procedures in merger notifica-
tions, failed to ensure a complete and satisfactory notifi-
cation. A complete Form CO with comprehensive infor-
mation is of crucial
importance for the Commission's
merger control procedure, inter alia due to the tight legal
deadlines the Commission is required to meet in these
procedures, and the notifying parties must be aware of
this importance. The internal provisions set up within
the notifying party for the preparation of the Form CO
have to reflect this high importance of a complete notifi-
the party has to organise its
cation. Consequently,
internal procedures with the highest care to ensure that
the legal duties and requirements under the Merger
Regulation are communicated to all relevant units, and
that all relevant information is identified and supplied in
the Form CO. The fact that in the present case informa-
tion was missing in three different areas revealed imper-
fections in the procedures applied by BP and Deutsche
BP in this instance, which led to submission of an
incomplete Form CO.

(40)

These omissions go beyond minor errors which might
be unavoidable in view of the complexity of large multi-
national undertakings. The explanation provided by
Deutsche BP also does not establish any extraordinary
circumstances which, despite all reasonable efforts, made
it impossible to provide the missing information. There
were three distinct aspects which have not been properly
dealt with in the Form CO, and which were all of an
evident relevance and importance for the competition
assessment. This is also reflected in the fact that the

5. Nature and gravity of the infringement

(43) Under Article 14(3) of the Merger Regulation, in setting
the amount of the fine, the Commission has to take
account of the nature and the gravity of the infringe-
ment.

(a) Nature

(44)

The infringement committed by Deutsche BP took the
form of negligent failure to disclose important coopera-
tion [arrangements with Sterling and …]* and to identify
ACN technology and catalysts as affected markets, as
well as of providing misleading information on the
competitive situation on the technology and catalyst
markets and BP's position on these markets.

(b) Gravity

1. De utsc h e B P 's a r g u me nts

(45) Deutsche BP submits that the following elements should
be considered as mitigating factors: First, Deutsche BP
stresses that there was no intention to mislead, and that
at no point did Deutsche BP intentionally withhold any
information from the Commission. Deutsche BP further
submits that the omission of the information arose as a
result of a very unfortunate combination of circum-
stances, rather than as a consequence of negligent beha-
viour.

(46)

Second, Deutsche BP underlines the limited competitive
impact of the omitted information. Deutsche BP argues
that in neither case did the omitted information, once
fully investigated by the Commission, prove to be signifi-
cant enough to merit a remedy. In that respect, Deutsche
BP refers to the previous cases where a fine was imposed
by the Commission for lacking information in a notifica-
tion. Deutsche BP takes the view that in all these cases
the information was either withheld intentionally or
there was a significant link between the omitted infor-
mation and the decision on the substance of the case, in
the sense that a remedy was required or the Commission
based its competition concerns on the information.

30.3.2004

EN

Official Journal of the European Union

L 91/47

(47)

Third, Deutsche BP considers it as a mitigating factor
that it does not dispute the incompleteness of the Form
CO as submitted. It further argues that it was fully and
immediately cooperative as soon as the Commission
indicated that the information was missing. With regard
to the information on [the other arrangement ]* and the
way full details emerged, Deutsche BP refers again to the
limited impact of [it]* on the competitive assessment.

(51)

The fact that the omitted information did not form the
basis for competition concerns which resulted in a need
for remedies cannot be taken into account as a miti-
gating factor. The information requirements set out in
the Form CO, which Article 14(1)(b) of
the Merger
Regulation serves to protect and enforce, do not differ-
entiate according to the likely outcome of the competi-
tion analysis. In the present context it is only relevant
that the information omitted was of importance for the
proper investigation and assessment of BP's competitive
position on the ACN market. It has to be recalled that,
inter alia, two clearly affected markets had not been iden-
tified. The fact that at the end of the Commission's
assessment, taking into account
the information that
initially was missing, the transaction did not lead to
competition concerns, does not reduce the gravity of the
omission. This gravity depends on the relevance of the
information for the investigation and assessment, but
not on the final outcome of this assessment.

(52) Accordingly, the reference to the absence of competition
concerns in the Commission's final decision cannot be
taken into account as regards the way the information
on [the other arrangement]* was provided.

further

(53) As explained in recitals 8 to 11, even after the Commis-
sion raised the agreement with Sterling with Deutsche
BP for the first time, Deutsche BP did not disclose [the
other arrangement]* immediately. And even after the
Commission asked for
information […]*,
Deutsche BP did not provide immediately the full infor-
mation on [the other arrangement]*. Another request for
further information was necessary to discover [the full
scope of the restrictive content of this arrangement]*. In
the light of the fact that it was only after several requests
and after a total delay of 11 days (8 March to 19 March)
the full information was provided, there is no basis for
taking into account Deutsche BP's cooperation as a miti-
gating factor.

(54) As an attenuating circumstance it has to be taken into
account
that Deutsche BP did not dispute the facts
discovered by the Commission and agreed that the rele-
vant information should have been included in the Form
CO.

6. Amount of the fine

(55) Accordingly, taking account of the circumstances in the
case, the Commission considers it appropriate to impose
a fine of EUR 35 000 on Deutsche BP, pursuant
to
Article 14(1)(b) of the Merger Regulation. In the event of
the interests should be payable at the
late payment,
interest rate applied by the European Central Bank to its
main refinancing operations on the first day of
the
month in which this decision is adopted, which for June
is 3,5 % as published in the Official Journal of the European
Communities C 132 of 4 June 2002, plus 3,5 percentage
points,

2. E v a lu a ti on

(48)

(49)

The Commission takes the view that the infringement is
of considerable gravity. The notification is the basis and
the starting point of the Commission's investigation of a
merger case. It determines to a large extent the approach
of the Commission towards the case and the areas and
focal points of its investigation. Incorrect and misleading
information creates the risk that important aspects rele-
vant for the competitive assessment of the transaction
are neither investigated nor analysed by the Commission,
and its final decision consequently is based on incorrect
information.
In assessing mergers, the Commission is
subject to extremely tight deadlines. In this framework it
is essential for the Commission's work that it can focus
its investigation on the relevant issues from the very
beginning of the procedure, based on comprehensive
and correct information provided in the notification.

The notification in the present case was incorrect and
misleading on three separate occasions. Two of
the
aspects were not brought to the Commission's attention
at all in the notification: no reference was made to the
cooperation agreements, and there was no mention at all
that BP was active in ACN catalyst. The infringements
concern three important elements in the assessment of
the case which prima facie could have led to serious
competition problems. The incorrect and misleading
information in the Form CO with regard to the ACN
market resulted in a misdirected and incomplete first
investigation by the Commission, which failed to include
these important issues. The relevant information only
came to the attention of the Commission as part of
information volunteered by third parties in the course of
the investigation conducted by the Commission, which
otherwise would not have considered these points at all.
After the notification had been declared incomplete, the
Commission had to re-launch an extensive investigation
to verify and assess the new facts subsequently disclosed
by BP, Deutsche BP and other market participants.

(50) As regards Deutsche BP's points, the Commission's views
are as follows: The absence of intention and the degree
of negligence has already been dealt with in the relevant
section above, which has to be taken into account in
adjusting the amount of a fine. The Commission agrees
that there was no intention on Deutsche BP's side, but
takes the view that Deutsche BP acted negligently in a
considerable degree.

L 91/48

EN

Official Journal of the European Union

30.3.2004

HAS ADOPTED THIS DECISION:

Article 1

A fine of EUR 35 000 is hereby imposed on Deutsche BP AG
pursuant to Article 14(1)(b) of Regulation (EEC) No 4064/89
for having supplied incorrect and misleading information in
the notification submitted to the Commission under that Regu-
lation on 23 February 2001.

Article 2

The fine imposed in Article 1 shall be paid, within three
months of the date of notification of this Decision to the
following bank account of the European Commission:

Account No 642-0029000-95
European Commission
Banco Bilbao Vizcaya Argentaria (BBVA)
Code Swift: BBVABEBB — Code IBAN: BE 76 6420 0290
0095
Avenue des Arts, 43
B-1040 Brussels.

that period,

interest shall automatically be
After expiry of
payable at the interest rate applied by the European Central
Bank to its main refinancing operations on the first day of the
month in which this Decision is adopted, plus 3,5 percentage
points, that is to say 6,75 %.

This Decision is addressed to:

Article 3

Deutsche BP AG
Max-Born-Strasse 2
D-22761 Hamburg.

Done at Brussels, 19 June 2002.

For the Commission

Mario MONTI

Member of the Commission