2003/674/EC: Commission decision of 2 July 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case C.37.519 — Methionine) (Text with EEA relevance.)(notified under document number C(2002) 2276)
Date: 2002-07-02
Institutions: European Commission
Subjects: chemical industry, competition law, infringement of EU law, inter-company agreement

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 2 July 2002

relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA
Agreement
(Case C.37.519 — Methionine)
(notified under document number C(2002) 2276)

(Only the English and German texts are authentic)

(Text with EEA relevance)

(2003/674/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

— Aventis SA,

Having regard to the Treaty establishing the European Commu-
nity,

— Aventis Animal Nutrition SA,

Having regard to the Agreement on the European Economic
Area,

— Nippon Soda Company Ltd,

Having regard to Council Regulation No 17 of 6 February
1962, First Regulation implementing Articles 85 and 86 of the
Treaty (1), as last amended by Regulation (EC) No 1/2003 (2),
and in particular Articles 3 and 15 thereof,

(2)

Having regard to the Commission decisions of 1 October 2001
and 17 December 2001 to open a proceeding in this case,

Having given the undertakings concerned the opportunity to
make known their views on the objections raised by the
Commission pursuant to Article 19(1) of Regulation No 17
and Commission Regulation (EC) No 2842/98 of 22 December
1998 on the hearing of parties in certain proceedings under
Articles 85 and 86 of the EC Treaty (3),

After consulting the Advisory Committee on Restrictive Prac-
tices and Dominant Positions,

Having regard to the report of
case (4),

the hearing officer in this

Whereas:

PART I — FACTS

— Degussa AG.

the participation of

The infringement consists of
the
abovementioned producers of methionine in a con-
tinuing agreement and/or concerted action contrary to
Article 81(1) of the EC Treaty and Article 53 of the
the EEA, by
EEA Agreement covering the whole of
which they agreed on price targets for
the product,
agreed on and implemented a mechanism for imple-
menting price increases, exchanged information on sales
volumes and market shares and monitored and enforced
their agreements.

(3)

The undertakings participated in the infringement from
February 1986 until February 1999.

B. THE METHIONINE INDUSTRY

1. THE PRODUCT

A. SUMMARY OF THE INFRINGEMENT

(1)

This Decision is addressed to the following undertak-
ings:

(4)

Methionine is one of the most important amino acids.
Amino acids are organic molecules which form proteins,
one of the basic components of food and feed. There
are over 20 amino acids involved in building protein.
Those amino acids which cannot be produced naturally

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in the body have to be added to feed; they are known
‘essential amino acids’, of which methionine, a
as
sulphur-containing amino acid,
is one type. Unless all
the essential amino acids are present in the diet, the
synthesis of protein by the living organism stops. The
first amino acid, absence of which interrupts protein
is called the ‘first
synthesis of the other amino acids,
limiting amino acid’. Methionine is the first
limiting
amino acid for poultry.
the natural methionine
If
content of poultry feed is low, it has to be augmented
with supplements.

Methionine is added to compound animal
feeds and
premixes for all animal species. The principal application
is in poultry feed but methionine is also increasingly
being added to pig feed and speciality animal feeds.

Methionine is presented in two principal
forms: DL-
Methionine (DLM) and methionine hydroxy analogue
(MHA).

DL-Methionine is a white crystallised form with virtually
100 % active content.

Methionine hydroxy analogue is produced in liquid form
by Novus (the successor of the US producer Monsanto)
with a nominal 88 % activity content. Liquid methio-
nine was introduced by Monsanto in the 1980s, and
now accounts for around 50 % of world methionine
consumption.

step was to be the complete fusion of the two parent
companies.

(14)

An accelerated programme for the merger project was
announced in May 1999, subject to regulatory and other
approvals.

(15) On 9 August 1999 the Commission decided under
Article 6(1)(b) of Council Regulation (EEC) No 4064/
89 of 21 December 1989 on the control of concentra-
tions between undertakings (5) not to oppose the merger
and to declare
common
market (6).

compatible with the

it

is

an

board

executive

(16) On 15 December 1999 the completion of the merger
led by a four-member
was announced. Aventis
committee
and
management
comprising the four board members and another five
senior executives. The new group is divided into two
business areas: Aventis Pharma and Aventis Agriculture.
Aventis Agriculture comprises the crop science, plant
biotechnology, animal nutrition and animal health busi-
nesses. The chief executive officer of Aventis Agriculture,
who was formerly president of Rhône-Poulenc's plant
and animal health business sector, is also a member of
the executive committee of Aventis. Aventis has its
company headquarters in Strasbourg.

(17)

The proforma group sales of the new entity for 2000
were EUR 22,30 billion.

the two rival

forms has
The relative bio-efficiency of
been the subject of
long-running debate between the
producers. Though both forms are used for the same
purpose and derived from the same raw materials, they
are produced in different ways.

(18)

2. THE PRODUCERS

RHÔNE-POULENC (NOW AVENTIS SA)

The company of the Rhône-Poulenc group responsible
for methionine at the material time was Rhône-Poulenc
Animal Nutrition (‘RPAN’). RPAN was a wholly-owned
subsidiary of Rhône-Poulenc (100 %) which produced
and marketed nutritional additives,
including vitamins
and aminoacids, for use in animal foodstuffs (poultry,
pigs and ruminants). It is now known as Aventis Animal
Nutrition SA (‘AAN’). RPAN was directly attached to the
Plant and Animal Health Division of Rhône-Poulenc SA
and answered to it accordingly (100 %). Both Aventis
SA and AAN are addressees of this Decision.

(5)

(6)

(7)

(8)

(9)

(10)

Rhône-Poulenc, whose corporate headquarters were in
Courbevoie, France, was at all material times an interna-
tional company involved in the research, development,
production and marketing of organic and inorganic
intermediate chemicals, speciality chemicals, fibres, plas-
tics, pharmaceuticals and agricultural chemicals.

(19)

AAN/RPAN has its international headquarters in Antony,
near Paris.
It also has regional sales headquarters for
Africa (based in France), North America, South America
and the Asia-Pacific region.

(11)

Its three core businesses were pharmaceuticals, plant
and animal health and speciality chemicals.

(20)

Functionally, RPAN was part of Rhône-Poulenc's Plant
and Animal Health Business Sector.

(12)

In 1998 the Rhône-Poulenc group's business totalled
FRF 86,8 billion (ECU 13,15 billion).

(21) AAN/RPAN's main feed additive products are vitamins A

and E (used in poultry and pig feed) and methionine.

(13) On 1 December 1998 Rhône-Poulenc and Hoechst AG
announced their decision to merge their life sciences
activities in a new entity ‘Aventis’ (to be owned 50:50
by the two parent companies) and to shed their
chemical operations over a three-year period. The next

(22)

Rhône-Poulenc makes both DL-methionine and MHA,
although the bulk of its production is in powder form.
It produces dry DL-methionine at two plants in France
its facilities in Spain and in the
and a third in Brazil;
USA make the liquid form.

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(23)

feed
Rhône-Poulenc's worldwide sales of nutritional
additives in 1998 amounted to some ECU [ ] (*) million,
giving it a [
In the
Community, sales of some ECU [ ]* million gave it a
[ ]* share of the market.

the global market.

]* share of

is first sold in Japan to Mitsui, which is not itself a
manufacturer of the product. Mitsui
is responsible for
distribution and marketing in Europe and supplies
through its European subsidiary.

(24)

In 1998 Rhône-Poulenc reported worldwide sales of in
methionine of some ECU [
]* million, down from
ECU 311 million the previous year.

OTHER PRODUCERS

1. Sumitomo

DEGUSSA AG

(25) Degussa AG of Düsseldorf came into being in 2000
when SKW Trostberg and Degussa-Hüls merged in
follow-up to the merger between their respective parent
companies VIAG and VEBA to form E.ON. Degussa-Hüls
itself was formed in 1998 by the merger of two leading
German chemical companies, Degussa AG of Frankfurt
and Hüls AG of Marl.

(36)

Sumitomo Chemical Company Ltd of Osaka and Tokyo
is one of Japan's largest chemical manufacturers, with a
product range including basic chemicals, petrochemicals,
fine chemicals, agricultural chemicals and pharmaceuti-
cals.

(37)

Total group sales in the financial year ending 31 March
2001 were [ ]*.

Proforma sales in 2000 of
amounted to some EUR [ ]* billion.

the two merging entities

2. Novus

(26)

(27)

(28)

The new group comprises six divisions corresponding to
the speciality chemicals activities of the new Degussa:
Health and Nutrition, Construction Chemicals, Fine and
Industrial Chemicals, Coatings and Advanced Fillers,
Speciality Polymers and Performance Chemicals.

to the merger, animal

Prior
feedstuff business was
conducted by Degussa-Hüls. Before the merger with
Hüls AG of Marl in 1998, the animal feedstuff business
was directly conducted by Degussa AG of Frankfurt.

(29) Degussa is the only single-source supplier of the three
most important essential amino acids: methionine, lysine
and threonine.

(30) Degussa produces (dry) DL-methionine only.

(38) Novus International Inc (St Louis Missouri) was formerly
the feed additives division of Monsanto Company. It was
set up as a new company in 1991 to operate the
additive business acquired from Monsanto by Mitsui &
Co Ltd and Nippon Soda Co Ltd. [ ]* of the stock is
owned by Mitsui & Co Tokyo, [ ]* by Mitsui & Co
(USA) Inc (New York, New York) and the remaining [ ]*
by Nippon Soda.

(39) Novus produces liquid methionine analogue form under
the trademark Alimet.
Its plant at Chocolate Bayou
(Texas) has a production capacity of [ ]* since it was
expanded in 1999.

(40) Novus's total turnover in 2000 was [ ]*.

3. THE MARKET FOR METHIONINE

NIPPON SODA COMPANY LIMITED

SUPPLY

(31) Nippon Soda of Tokyo is a large global business enter-
prise active in the manufacture of pesticides, agricultural
chemicals,
feed additives, pharmaceutical compounds
and sodium and potassium compounds.

(32)

Together with Mitsui
US producer of MHA (Nippon Soda is [ ]*).

it owns Novus International, the

(33) Nippon Soda Company's turnover for the financial year

ending March 2000 totalled [ ]*.

(34) Nippon Soda does not manufacture methionine in
in
Europe.
Japan; [ ]* of its production is sold in Asia and [ ]* in
the EEA (via Mitsui).

It produces powdered methionine (DLM)

(35)

The DLM manufactured by Nippon Soda in Japan for
sale in the EEA — and indeed the rest of the world —

(41)

(42)

(43)

(44)

The production of synthetic methionine is a complex
process involving the hydrolysis of common proteins.
The
raw materials used to
produce methionine are acrolein, methyl mercaptan and
hydrocyanic acid.

three most

important

The producers of methionine are mainly large chemical
companies operating on a worldwide scale. Methionine
is usually produced by their feed additives divisions.

The world's three largest producers are Rhône-Poulenc,
Degussa and Novus.

Rhône-Poulenc has some [
the world market,
Degussa [ ]* and Novus of the United States has [ ]*.
]* also
Japan's Nippon Soda [
operate on a global scale.

]* and Sumitomo [

]* of

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(45)

(46)

(47)

(48)

the relevant period,

In order to evaluate the size of the market for methio-
nine over
the Commission has
taken into consideration various estimates, in particular
those provided by the main producers of methionine in
their replies to the requests for information sent on
27 July 1999 and 7 December 1999.

]*. The Community market was worth some

[
EUR 260 million.

DEMAND

The main customers for methionine are animal
feed
producers (compounders) and pre-mixers, with poultry
feed production accounting
the majority of
consumption, followed by swine feed.

for

drugs

Pre-mixers put together a concentrated vitamins-mineral
package including trace elements, amino acids and
therapeutic
feeds.
Compounders are the next stage in the feed production
process, but many buy methionine direct
from the
manufacturers rather than in a concentrate from the
pre-mixers.

inclusion in animal

for

(49) As demand for food has increased, commercial livestock
producers have increasingly been integrated into large
industrial organisations producing feed,
raising and
slaughtering livestock and manufacturing prepared or
processed foods (these are known as ‘integrators’).

(54) On 16 June 1999 Commission officials and officials of
Germany's Bundeskartellamt, acting on a Commission
decision under Article 14(3) of Regulation No 17,
carried out an investigation at the premises of Degussa-
Hüls in Frankfurt.

(55)

(56)

Following the on-the-spot investigation, the Commission
on 27 July 1999 addressed a request for information to
Degussa-Hüls under Article 11 of Regulation No 17
concerning the documents which it had obtained from
that undertaking. Degussa-Hüls replied to the request on
9 September 1999.

The Commission addressed requests for information to
Nippon Soda, Novus
and Sumitomo Chemical on
7 December 1999 and to Mitsui on 10 December of
that
during
replies were
February 2000. Nippon Soda submitted a supplemen-
tary statement on 16 May 2000.

received

year.

The

the Commission sent

(57) On 1 October 2001, the Commission initiated proceed-
ings in this case and adopted a statement of objections
against five producers of methionine. On 17 December
2001,
the same statement of
objections to Aventis Animal Nutrition SA (AAN), a
100 % subsidiary of Aventis SA. All parties submitted
written observations in response to the Commission's
objections. On 21 December 2001 the legal counsel of
Aventis SA and Aventis Animal Nutrition SA informed
the Commission that
they would submit only one
response to the Commission's statements of objections
on behalf of both companies.

INTRA-COMMUNITY TRADE

(58)

(50) Methionine

is produced

in three Member

States
(Germany, France and Spain) and marketed throughout
the Community. All but one of the addressees of this
Decision had production facilities in the Community (in
certain cases
sales of
methionine in the Community came from third coun-
tries (such as Japan and the USA).

subsidiaries). Additional

via

Replies to the statements of objections were received
between 10 January and 18 January 2002. Aventis SA/
AAN and Nippon Soda admitted the infringement and
the facts. Degussa also
did not substantially contest
admitted the infringement, but only for
the period
1992 to 1997. On 25 January 2002 there was an oral
hearing, at which all parties had the opportunity to be
heard.

(51)

The methionine produced by Aventis SA/AAN in France
and Spain and by Degussa
sold
involving a substantial
the Community,
throughout
amount of trade between Member States.
In addition,
Nippon Soda's methionine sales through Mitsui subsidi-
aries established in certain Member States generate trade
flows to other Member States.

in Germany is

(59)

It was decided, taking into account the evidence, not to
pursue the procedure against two other parties.

D. DESCRIPTION OF EVENTS

1. PARTICIPANTS AND ORGANISATION

C. PROCEDURE

(60)

The structure, organisation and operation of the cartel
were based upon a shared assessment of the market.

(52) On 26 May 1999 Rhône-Poulenc submitted to the
Commission a statement admitting its involvement in a
[ ]* cartel to fix prices and allocate quotas for methio-
nine and invoking the Notice on the non-imposition or
reduction of fines in cartel cases (the ‘Leniency Notice’).

(61)

The usual representatives of the companies in meetings
were:

— for Rhône-Poulenc (Aventis SA/AAN): [ ]*,

(53)

Rhône-Poulenc was unable to supply any documentary
evidence of
said that RPAN
employees either did not create or did not keep any
relevant documents.

infringement;

the

it

— for Degussa: [ ]*,

— for Nippon Soda: [ ]*.

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(62)

Cartel meetings were set up at different levels:

— especially during the early years of the cartel, there
‘summit’ meetings of
were periodic top-level or
presidents, chief executive officers, general managers,
etc.,

— at a later stage, from 1989 onwards, more technical
‘managerial’ or ‘staff’
level
(Nippon Soda Submission

meetings were held at
rather than at top level
of 23 February 2000, p. 5),

— there were also bilateral contacts between companies.

2. THE ESSENTIAL FEATURES OF THE CARTEL

(a) OBJECTIVES

(63) On the basis of the statements made by the participants
and the documents in the Commission's dossier,
the
Commission has been able to identify certain essential
features of
the cartel agreed and implemented by its
members throughout the cartel's lifetime and to draw a
clear picture of the way the cartel functioned.

(64)

The cartel's three main objectives were to fix target
prices, agree concerted price increases and share infor-
mation on sales volumes and market shares.

(65)

(66)

(67)

1. Target prices and ‘rock bottom’ prices

The cartel members agreed on target prices
to be
implemented. They agreed on price ranges and discussed
the ‘announcement’ of new list prices by the members
of the cartel (see recitals 82 to 88, 136, 106, 112, 131,
136, 143 to 145, 152 and 153, 156 and 157, 167, 176,
182 and 183).

The participants agreed that
they needed to increase
their prices. They would discuss what the market would
accept and agree a price increase based on the outcome
of these discussions (see recitals 98, 103, 106, 112, 128,
136 and 137).

these target prices would be set

]*.
in [
In general,
for each
Target prices would however also be set
national market
(in national currencies and deutsch-
marks). Prices would be reviewed for each national
the target prices had been
market
attained, sometimes in reference to individual customers
(see recitals 128, 132, 144, 152, 155, 156 to 159 and
161).

to see whether

(68)

In addition to target prices, the participants also agreed
on minimum prices for each national market (so-called
‘floor’ or ‘rock bottom’ prices) (see paragraphs 152 to
155).

2. Concerting price increases

(69)

The price increases would be organised in different
‘campaigns’
be

implementation would

their

and

reviewed during following cartel meetings. Various price
increase
(see
campaigns
recitals 106 and 116 to 118).

been individualised

have

3. Sharing of
volumes

information on market

shares/sales

(70)

The participants exchanged information on sales volume
and production capacity and exchanged and compared
their respective estimates of the total volume of the [ ]*
market (see paragraphs 82, 134, 149, 169 to 171 and
183).

(71) Nippon Soda, when describing the way in which the
trilateral meetings usually worked, states that (inter alia)
information was exchanged concerning supplies of the
main materials for methionine, capacities, rates of oper-
(see
ation of plants and demand for
recital 170).

the product

(72) During the early years of the cartel, they even expressed
their opinions on future incremental market growth and
ways of allocating quotas between producers in propor-
tion to their production capacity (see recital 82).

(73) Although this was not necessarily the case throughout
the Commission has
the entire period of
evidence that
the participants on certain occasions
agreed to limit imports from outside the EEA in order
to maintain price levels (see recital 82) or support price
increases (see recitals 141 and 145).

the cartel,

(b) IMPLEMENTATION

1. Sales monitoring

(74)

(75)

the cartel agree-
In order successfully to implement
ments, the participants exchanged their sales volumes.
The figures exchanged would be compiled and discussed
at regular meetings. The participants would use this
information as a basis for discussions to determine the
target prices to be fixed (see recitals 88, 128, 130, 139,
150 and 154).

At some point during the cooperation Degussa even
proposed establishing an actual volume control scheme
supported by a compensation scheme, but Degussa
submits that
it never came to be implemented (see
recitals 134, 148, 149 and 164 to 168). Given that there
is no evidence to the contrary,
the Commission will
accept that it never came to the implementation of such
a volume control scheme.

2. Regular multilateral meetings

(76)

The holding of regular multi- and bilateral meetings was
a key feature of the cartel organisation. From 1986 to
1999, more than 25 multilateral meetings have been
identified.

(77)

(78)

(79)

(80)

(81)

(82)

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‘staff’

There were periodic top-level or ‘summit’ meetings as
well as more technically oriented meetings at ‘manager-
ial’ or
level. Multilateral meetings were often
preceded or followed by bilateral meetings at which
specific issues were discussed and information relevant
arrangements
to the
exchanged.

implementation of

cartel

the

The initial top-level meetings were organised once or
twice a year. Allowing for variations over the lifetime of
the cartel, operational meetings would generally take
place three or four times a year, the participants taking
it in turns to organise the meetings. (See recitals 82 and
120.)

3. OPERATION OF THE CARTEL AGREEMENT

The cartel went through three distinct periods. The first
period extended from February 1986 until 1989. During
that
time the participants accounted for virtually all
methionine production and the overall agreement was
implemented quite smoothly, with prices following an
upward trend.

(84)

(85)

manager at Nippon Soda, agreed to limit his company's
sales to the levels of the previous year (1985), namely
14 500 tonnes or 21,3 % of world markets outside the
USA and Japan. At that time a similar agreement existed
‘Japanese’
with Sumitomo,
methionine into the EEA market. Price ranges were also
agreed.

so limiting the sales of

In its supplemental submission of 2 February 2000 (at
pages 3, 15 and 16), Rhône-Poulenc confirms that it
entered into an agreement with Sumitomo whereby
Sumitomo would limit its sales into the EEA market.
This corroborates Nippon Soda's version of events.
Though unable to recollect the exact date of the agree-
ment, Rhône-Poulenc situates it ‘at some time during
the 1980s’. It further admits that contacts existed among
producers from 1985 to 1988.

the

that meetings

abovementioned producers during

took place
Sumitomo too confirms
among
the
1980s. It recalls having met with Nippon Soda, Rhône-
Poulenc and Degussa in 1987 and 1988 but states that
its representatives were under the impression that the
others already knew each other (9).

The end of the first period was marked by Sumitomo
leaving the arrangements and the entry into the market
liquid analogue methionine.
of Monsanto with a
Following these events, prices started to fall dramatically
(Rhône-Poulenc — statement, p. 4 — even speaks of
30 % by the summer and autumn of 1989). It appears
that at first the remaining participants (Degussa, Rhône-
Poulenc and Nippon Soda) were in doubt about the best
way to react to the new situation: would they need to
focus on regaining market share or would it be more
effective to focus on prices? It
from the
evidence in the Commission's file that after having held
various meetings in 1989 and 1990, the cartel members
agreed unanimously (at
to
focus their efforts on increasing prices. In the interests
of clarity, the Commission will consider the 1989 to
1990 ‘transition period’ a second period.

least by November 1990)

is apparent

The third period of the cartel runs from 1991 until the
end of the cartel in February 1999. During that period
the participating companies were forced to focus on
sustaining the price levels by the dramatic increase in
Monsanto's
liquid
since 1991)
product.

sales of

(Novus

its

1986 TO 1989

The cartel originated in the mid-1980s. In early 1986
Rhône-Poulenc and Degussa contacted Nippon Soda and
Sumitomo because they felt that the Japanese producers'
were encroaching on ‘their’ home markets
(Nippon
Soda's submission of 23 February 2000, p. 4 (7) and
attachments (8)).

(83)

In fact, according to Nippon Soda, Rhône-Poulenc,
Degussa, Nippon Soda and Sumitomo met at divisional
in February 1986 and agreed a scheme to limit
level
]*, divisional
this meeting,
Japanese imports. At

[

(86) Whereas all three undertakings confirm that Degussa,
Rhône-Poulenc and Nippon Soda first contacted each
other in the mid-1980s, Nippon Soda's statements and
documentation are the most detailed on both dates and
content. The cartel will therefore be considered to have
come into being in February 1986 (although Rhône-
Poulenc speaks of 1985 as the year of initial contacts
and Sumitomo of 1987).

(87) As to the subject matter of

these meetings, Nippon
Soda submits (page 4 of its submission of 23 February
2000) that, at their February 1986 meeting, the methio-
nine producers discussed and agreed price ranges and
limits on Japanese imports into the EEA. Cooperation
was to be continued, and the participants agreed to hold
‘summit meetings’ once or twice a
further high level
interspersed with more frequent ‘staff’-level meet-
year,
ings in order to continue their cooperation on prices.
The arrangements in question covered the whole world
market outside
including the
the US and Japan,
European Community.

(88) Although Sumitomo states that

(who

chaired

it only accepted the
invitation out of curiosity, it confirms that, at a meeting
held in Frankfurt in the autumn of 1987 (10), Nippon
Soda, Rhône-Poulenc, Degussa
the
meeting) and Sumitomo exchanged and compared their
respective estimates of the total volume of the world
market, gave their opinions as to future incremental
market growth and how to allocate quotas between
producers (the talk was of sharing in proportion to
production capacity), disclosed the volume of their sales
and production capacity for
the previous year and
discussed the ‘announcement’ of new list prices (Sumi-
tomo Article 11 reply, page 8 (11)).

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(89)

(90)

Sumitomo also states that during a meeting at Rhône-
Poulenc's Animal Health facility in France in the autumn
of 1988, the same participants discussed estimates and
allocation of future market growth.

Rhône-Poulenc, however, states that the cartel members'
meetings in the period 1985 to 1988 did not constitute
an ‘organised effort’ to reach agreements to fix prices or
rig the market.

(91) However,

in the light of the abovementioned evidence
submitted by Nippon Soda and Sumitomo, the Commis-
sion must dismiss this version of events. Moreover,
Rhône-Poulenc admits in its supplemental submission
‘at some time during the
of 2 February 2000 that
1980's’
it entered into a ‘gentlemen's agreement’ with
Sumitomo whereby Sumitomo would not sell methio-
nine in Europe and Rhône-Poulenc would stay out of
Japan (12). The contacts between competitors
in the
1980s were therefore not as innocent as Rhône-Poulenc
initially claimed.

(92)

(93)

(94)

(95)

In this respect, Aventis has stated in its reply to the
Commission's statement of objections that the fact that
it has put the emphasis on the meetings held during the
1990s should not be interpreted as an effort to conceal
the
contacts in the 1980s:
recollections and records were more complete in the
1990s.

is to be expected that

it

Finally, as far as Sumitomo is concerned, it claims that
the only reason why it attended the meeting at Rhône-
Poulenc's Animal Health facility in France in the autumn
of 1988 was to announce to the others its intention not
to attend any further meetings (13).

This is confirmed by the other cartel members. In its
supplemental submission of 2 February 2000 (pages 3,
15 and 16), Rhône-Poulenc states that the contacts were
broken off by Sumitomo in 1988 ‘because it believed
that they were too risky’. Nippon Soda has stated (14)
that the summit meetings in their original form ended
at or
end of 1988 when Sumitomo
announced its intention to withdraw from the cooper-
ation because the market had expanded and it was no
longer prepared to accept a limitation on its sales.

about

the

THE DEVELOPMENTS DURING 1989 AND 1990

the

that

states

earlier

Rhône-Poulenc
arrangements
ended in 1988 and stand entirely separate from the
In its reply to the Commission's
1990 arrangements.
statement of objections, Degussa points out
the
earlier cartel arrangements ended in 1989. Degussa
the evidence in the Commission's
further argues that
the ‘1986
file does not support any allegations that
cartel’ would have continued in 1989 and 1990.

that

(96)

The Commission must however reject these arguments.
Whereas the participants (including Rhône-Poulenc) have

submitted evidence in support of their claim that Sumi-
tomo broke off the cooperation at the end of 1988, no
evidence was submitted in support of the claim that the
remaining parties to the cartel would have announced
to each other any intention to terminate the arrange-
the
end the
ment or
Commission has evidence that
the
cartel went on throughout 1989 and 1990:

contrary,
the operations of

contacts. On the

— Nippon Soda makes it clear that there was no such
break in continuity: if the high-level annual ‘summit’
the regular staff-level
meetings had indeed ended,
meetings
through
1989 and 1990 (15),

uninterrupted

continued

— in August 1989 a meeting took place between
(see

and Rhône-Poulenc

Nippon Soda, Degussa
recitals 98 and 99),

— in or

around May 1990 the

cartel members
contacted each other on the issue of raising the
methionine
(see
prices
recitals 100 to 106),

from July

1990

as

— Rhône-Poulenc admits meeting Degussa on 10 June
1990 to discuss falling prices (see recitals 107 and
108),

— in November 1990 the participants met again and
agreed to increase their prices (see recitals 112 and
115 to 120).

Thus, not only did the remaining parties never manifest
any intention of terminating the arrangements, but —
contrary to Degussa and Aventis's submissions — the
operation of the cartel continued unabated.

In support of its statement that regular meetings had
gone on in 1989 and 1990, Nippon Soda has submitted
a background paper dated 5 May 1990 (16) prepared by
Nippon Soda for its discussions with Degussa, showing
that a meeting was in fact organised among Nippon
Soda, Degussa and Rhône-Poulenc in August 1989. In
addition,
the cartel members
discussed price increases in 1990 (see recitals 100 to
106).

the note shows

that

(97)

(98)

(99) At this meeting Nippon Soda and Rhône-Poulenc tried
to persuade Degussa not to match the low prices then
being offered by Monsanto and Sumitomo.
]* (of
in
Degussa) visited Japan in the autumn of 1989;
discussions with Nippon Soda on pricing he justified
Degussa's ‘discount’ sales as being necessary to maintain
sales volumes and so reduce fixed costs.

[

(100) The note of 5 May 1990 further confirms that the cartel
was still operating, even though the participants may
have been confused as to how they should react to the
new market situation following Monsanto's entry into
the market in 1988 to 1989.

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(101)

the note goes on to explain that Degussa's
Indeed,
policy in early 1990 was
to win back methionine
customers from Monsanto by offering even small custo-
mers low prices, which Nippon Soda saw as ‘disre-
garding the effects of
their conduct on the entire
methionine market’.

‘first’ price

a

increase
7 November 1990 suggest
campaign prior to 1991 (see recitals 116 to 118).
In
any event, it is at least established that the parties were,
contrary to Aventis and Degussa's
in
contact with each other, exchanged information on
prices and sales and discussed price increases during
1989 and 1990.

submissions,

(102) To Nippon Soda's indignation, Degussa ([ ]*) gave the
clear
it believed that prices were
unstable because there were too many competitors and
that the Japanese should therefore get out of the market.

impression that

(107) Rhône-Poulenc states (17) that it met representatives of
Degussa again on 10 June 1990 at the latter's Frankfurt
offices in order to discuss falling prices.

(103) Despite evident difficulties in coordinating their actions,
the note shows that the participants continued to meet
and shared the view that the price decline had to be
reversed. Nippon Soda recorded that Degussa, having
secured the desired shipment volume and plant loading
through its discount action, was now trying to increase
the profitability of its operations by proposing a price
increase. Monsanto had announced an increase to take
place that month: ‘Obviously considering that July was a
good time to announce a price increase, Degussa was
trying to sound Nisso and Rhône-Poulenc out about the
possibility of having another tri-party meeting in the
near future’.

(104) Rhône-Poulenc had a somewhat different agenda from
Degussa on prices and aimed at maintaining price levels:
‘Rhône-Poulenc did not seem like very much interested
in the proposed joint efforts to increase the prices.
Rhône-Poulenc seemed more interested in how to cope
with the possibility of further decline of the price than
in the proposed concerted action to increase the price’.

(105) The crucial question for Nippon Soda in May 1990 was
how to get Rhône-Poulenc to back the proposed price
‘no joint price increasing efforts could be
initiative:
successful without Rhône-Poulenc's participation’. With
the recent change in personnel at RPAN and [ ]* repla-
cement by [ ]*, Nippon Soda believed it should continue
to make efforts to maintain close contacts with his
superiors in Rhône-Poulenc.

(106) Whatever the perceptions of

towards

the different participants
about the new market situation (following the entry of
it, Degussa,
Monsanto) and their attitudes
Rhône-Poulenc and Nippon Soda met several times in
1989 and 1990 to discuss prices and market data and
to plan their joint reaction to the new market situation.
As a result, they were by mid-1990 in complete agree-
ment on the scheme to organise the market by focusing
on prices. Although the note (dating from May 1990)
clearly shows that the parties were discussing increasing
their prices for July 1990, it does not show whether the
price
parties
increase. However, the minutes of a cartel meeting on

implemented

discussed

actually

the

(108) The meeting was attended by [ ]*and [ ]* from Rhône-
(In its
Poulenc and [ ]*, [ ]* and [ ]* from Degussa.
supplemental
its
earlier statement that Nippon Soda was also present at
this meeting). [ ]* was managing director of Degussa's
industrial and fine chemicals division, while [ ]* was [ ]*
of Rhône-Poulenc's animal nutrition division RPAN.

submission, Rhône-Poulenc corrects

(109) Rhône-Poulenc adds

in its

supplemental

submission
(page 3) (18) that [ ]*, when he joined the company in
April 1990, had been ‘encouraged’ by [ ]* and [ ]* (his
predecessor) to contact [ ]* at Degussa with a view to
‘re-initiating’ regular contacts.

(110) Rhône-Poulenc says that at

this meeting of 10 June
1990 Rhône-Poulenc and Degussa decided to contact
Nippon Soda to bring it into the scheme. (In fact, as
shown above and as Nippon Soda admits (19), the 1986
cartel had never stopped and Nippon Soda was already
a party to the arrangements.) [ ]* set up a meeting with
Nippon Soda, which took place in Hong Kong on or
about 19 November 1990. Nippon Soda has provided
(attachment b to its
submission of 23 February
2000 (20)) a minute of a Managers' meeting held in
Seoul on 7 November 1990 (it may well be that this is
in fact
the same meeting as the one which Rhône-
Poulenc places in Hong Kong).

(111)

Prior to the tripartite meeting [ ]* and [ ]* had met
again in Versailles (to exchange market information, says
Rhône-Poulenc), but also presumably to prepare their
position vis-à-vis Nippon Soda). [ ]* provided [ ]* with
Rhône-Poulenc's sales figures, and the two attempted to
determine the size of the world market.

(112) Rhône-Poulenc says that in the November meeting the
they needed to increase
three companies agreed that
their prices. After discussing what
the market would
bear, they agreed to raise prices from 2,50 USD/kg to
2,80 USD/kg.

(113) Rhône-Poulenc was represented by [ ]* and [ ]*, Degussa

by [ ]* and Nippon Soda by [ ]*.

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(114) The participants agreed to continue their regular meet-
ings in various locations throughout Europe and Asia,
eventually including Taipei, Singapore, Bangkok, Tokyo,
Paris, Vienna, London, Nice, Brussels, Rome, Copen-
hagen, Düsseldorf, Hamburg and Strasbourg.

(115) Nippon Soda's note (21) on the Seoul meeting (if it is
indeed the same one which Rhône-Poulenc identified as
having been held in Hong Kong) on 7 November 1990
gives a somewhat fuller picture of the discussions.

Each of Rhône-Poulenc and Degussa should indepen-
dently contact Monsanto and try to persuade Monsanto
to join a second price increase campaign. To be ready
for the proposed price increase scheduled in and after
January 1991, meetings with Monsanto should take
place within November 1998 [sic] (22) (23).

(…)

Another meeting should be held in late February (on
February 26), 1991 in Europe to further discuss the
products [sic] prices for April 1991 and thereafter.’

(116) Although Rhône-Poulenc and Degussa are said to have
been ‘nervous about the proposed second price increase’
because of
the weak dollar and Monsanto's apparent
silence about the planned increase, it is clear from the
context of the note that the three parties agreed on a
‘second price increase’
(it is possible that this second
‘campaign’
involved two stages, with one increase on
1 January and another on 1 April 1991).

(120) As agreed in the Far East meeting in November 1990,
from 1991 on the representatives of Degussa, Rhône-
Poulenc and Nippon Soda met three or four times a
year in different cities in Europe and Asia, the partici-
to organise the meetings
pants
(Rhône-Poulenc supplemental submission, p. 4; Nippon
Soda reply, p. 9 (24)).

taking it

in turns

(117) Besides providing clear

evidence of

the agreement
between the cartel members
to implement a price
increase in the course of 1991, Nippon Soda's minutes
of
the meeting of 7 November 1990 also show that
there had been an earlier ‘first’ price increase. This was
most
for
price
July 1990, which confirms that, contrary to the impres-
sion given by Rhône-Poulenc that the cartel was first set
the July 1990 price increase had
up in late 1990,
already been concerted in a
(see
recital 106).

campaign’

discussed

probably

increase

‘first

the

the

first

increase

(118) The dollar prices referred to in this note are higher than
those mentioned by Rhône-Poulenc in its statement
in January was
(2,80 USD/kg):
supposed to push the dollar price up to 3,30-
3,50 USD/kg,
it up to a level of
3,60-3,70 USD/kg in April. These price quotes show
that the July 1990 price increase had, by the time of the
tripartite meeting in the Far East in November 1990,
restored prices, which had fallen in the first half of the
year, to the levels of the start of the year.

the second to get

(119)

Indeed, as far as the price in Europe is concerned, the
memorandum is explicit:

(121) Documentation relating to several of these meetings was
found at Degussa marked ‘summit’, despite Nippon Soda
situating these regular meetings from 1989 at ‘manage-
rial’ or ‘staff’ rather than at
(Nippon Soda
reply, p. 5 (25)).

top level

(122) Nippon Soda has provided (submission of 23 February
2000, pp. 9-10 (26)) a list of nine trilateral meetings for
which details were available, but as it points out, meet-
ings took place three times a year (Rhône-Poulenc says
for which only incomplete
four);
information was available at Nippon Soda, are set out
on page 10 of its submission of 23 February 2000 (27).

further meetings,

(123) Rhône-Poulenc has supplied a more complete list of
meetings from 1990 onwards, although the dates are
said to be approximations and are not necessarily accu-
rate (appendix to supplemental submission (28)).

(124) Degussa has provided a list of regular meetings (see
its Article 11 reply dated 9 September
in

page 5 of
1999 (29)) beginning with the
March 1992.

Lisbon meeting

(125)

the foregoing,

‘In consideration of
the three parties
agreed … in the German mark area where the price
was at the level of 5,10 DEM/kg, which was equivalent
to 3,40-3,50 USD/kg, it would be practically difficult to
increase the price any further. Therefore,
the current
price level there should remain unchanged during the
first quarter of 1991. But for defensive purposes, a price
increase of some 10 % should be announced effective
from April 1991.

that

claims

It admits to just two earlier meetings (it says they were
in 1991) with Rhône-Poulenc (in Paris and Frankfurt)
but
they were unconnected with the
‘summit’ meetings; the two producers (it says) conducted
a general exchange on market development and produc-
tion capacities in methionine. These meetings may actu-
ally have been the three identified by Rhône-Poulenc as
taking place in Frankfurt in June and August 1990 and
in Paris in late 1990 before the Far East meeting with
from Rhône-Poulenc's
Nippon Soda.

is also clear

It

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account that they were not of the relatively innocent
nature claimed by Degussa. In its reply to the Commis-
sion's statement of objections, Degussa states that
it
simply has no recollection of meetings organised prior
to the two meetings in 1991, given that no current
the
employees of Degussa have any recollection of
arrangements prior to 1992.
It also submits that the
Commission has no exact dates for meetings in 1990 or
1991. However, in the light of the evidence contained in
the preceding paragraphs, the Commission can dismiss
this argument.

1991 TO 1998

(126) During its investigations at Degussa,

the Commission
obtained comprehensive hand-written notes taken by
[ ]* at a series of regular meetings ([ ]* was head of
from
marketing at Degussa's
October 1991 to the end of 1994).

feed additives

sector

(127) The first of these notes concern a meeting that was held
in Lisbon on 15 to 17 March 1992 (30). The abbrevia-
tions used by [ ]* for the different speakers show that
the participants included [ ]*, [ ]* and [ ]* from Rhône-
Poulenc, [ ]* and [ ]* from Degussa and [ ]* and [ ]*
from Nippon Soda (another document (31) appears to
relate to a bilateral meeting between Degussa and
Rhône-Poulenc shortly before this meeting).

(128) After exchanging forecasts of

for the
current year, the meeting reviewed for each region and
country the current price level, prospects for increasing
the price and individual customer business.

the price level

(129) For Europe, the comments begin (32):

‘Why not 6.20.

1. Russian materials (400-500 t Oct-Feb)

2. Stock effects

3. Stepwise price increase by Novus

4. - 1 500 t Deg. // - 1 500 t RP + MHA (5 months).’

(130) The clear implication is that the participants had been
hoping to set DEM 6,20 as a target price (according to
Degussa, Article 11 reply, p. 14 (33)), there was ‘general
disappointment’ among the producers that the price for
methionine had not stabilised at above DEM 6,00).

(131) An internal price list

found at Degussa (34) would
suggest that at the end of February 1992 the ‘target’
price for the first quarter of 1992 was DEM 5,90 and
the limit price DEM 5,80. Given the focus of the regular
quarterly meetings upon pricing, and the fact that for
several of the meetings recorded by [ ]* a list in this
is reasonable to
format

is attached to his notes,

it

assume that the connection between Degussa's internal
‘list’ and the meetings was a close one.

(132) There follows a review of each national market

It was

in
Europe. A new price of DEM 6,05 was to be announced
in Germany by Degussa.
reported that one
customer (Bela-Mühle) had received offers of between
DEM 5,90 and DEM 5,95 for the second quarter of
to
1992. Rhône-Poulenc had increased its prices
between DEM 6,00 and DEM 6,05.
(The discussion
continued along these lines for Belgium, France, Greece,
UK,
Italy, Norway, Finland,
Sweden, Austria, Portugal, Spain and Switzerland.)

the Netherlands,

Ireland,

(133) The next summit meeting recorded by [ ]* was in Taipei

in July 1992 (35).

(134) After discussions on how to counter

imports from
Russia via dealers, the participants examined the volume
situation in Europe. Degussa, having ‘lost’ 2 500 tonnes
in the first six months, was judged the main ‘loser’ and
Rhône-Poulenc and Nippon Soda were also slightly
down. The big winners were Novus and the Russians.
A balance sheet was drawn up showing a shortfall of
700 tonnes, which could be offset by fewer exports and
by re-imports.

(135) At the Tokyo meeting of 22 and 23 November 1992 (36)
the subject of Russian imports came up again. A review
of the world market compared with the previous year
concluded that there had been an increase in demand of
4 % to 5 %.

(136) A note made by [ ]* (37) (the authorship is not disputed)
in late 1992/early 1993 provides
insight.
Whether it relates to the November 1992 meeting or
the one held in Singapore on 2 February 1993 is
uncertain. It would appear that at around this time the
price had begun to fall again. The note begins ‘Europa
Preise: Q4/92 = avg 5.60 Q1 93 = avg 5.20’.

further

The producers discussed a price increase announced by
Rhône-Poulenc, apparently only for its MHA. The note
reads:

‘RP Price Increase announcement only for NP 99. 15 %
increase
last week
published in F (last week Jan)’.

DEM 6,40 (= FRF 21,80)

(137)

Indeed, a Degussa Price list (38) in the same format as
the internal note found at Degussa (39) (and made using
the exchange rate of 26 February 1993) shows a target
(‘Ziel’) for the second quarter of 1993 of DEM 6,40 and
a ‘limit’ of DEM 6,20, although a handwritten annota-
tion indicates that this lower figure was subsequently
adopted as the ‘target’.

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(138) Notes were made by [ ]* of the meeting in Nice on 1
(or 2) June 1993 (40). The participants discussed the raw
materials situation. The Russian problem was also exam-
ined in some detail before a review of
individual
It was observed that
national markets and regions.
in Germany at DEM 4,50
Novus was selling Alimet
(equivalent to DEM 5,62 for the crystalline form).

(139) Nippon Soda has supplied to the Commission a note of
a bilateral meeting with [ ]* of Degussa a few weeks
earlier that included preparations for the ‘club’ meeting
‘common interest’
in Nice (41).
In fact, the subjects of
discussed with Degussa related to China, Taiwan,
the
and Australia. A separate preparatory
Philippines
meeting between Nippon Soda and Rhône-Poulenc the
day before the ‘club’ met in Nice was also concerned
with the European market. Topics covered were the
introduction of a price rise (it had been delayed by
still being offered at old prices but was
product
becoming accepted during May), activities by ‘trouble-
makers’
in the
(customers reselling at cheap prices)
Netherlands and elsewhere and Nippon Soda's price
proposals to BP in the United Kingdom (42).

(140) Nippon Soda also submitted its own detailed note of

the June 1993 ‘club meeting’ in Nice (43).

(141)

committed to Rhône-Poulenc

It sets out the agreement between Rhône-Poulenc and
the Russians: Russian exports were to be limited to
and a
6 000 tonnes
further 1 000 tonnes to be sold to Welding, a trader in
Germany. Rhône-Poulenc were going to contact Welding
asking it to ‘hold any sales while we were making our
current efforts to increase the market price of methio-
nine’ (p. 3).

(142) The Nippon Soda note of the June 1993 club meeting is
far more detailed on the European market than Degus-
sa's.

(143) The second half of the meeting was spent ‘discuss(ing)
the recent developments in the regional markets and
setting the target price for the third calendar quarter’.

(144) Long discussions are reported on the target price for
Europe which had previously been agreed at 6,20 to
6,40 DEM/kg (see recitals 136 and 137). Nippon Soda
had during its executives' travels through Europe in May
noted that the typical market price was NLG 6,00 in the
Netherlands, GBP 2,30 in the UK and BEF 125 in
Belgium. The market was considered to be very sluggish.
Rhône-Poulenc was aggrieved that Degussa was selling
below the target price in [
that
product was returning to Europe and reselling at only
5,32 to 5,33 DEM/kg. Despite the difficulties with
pricing in Europe ‘it was basically agreed that
the
current
target price of 6,20 DEM/kg would remain
unchanged during the third calendar quarter except that
the target prices applicable to Portugal and Spain, where

]*, with the result

the currencies had been devalued again by 6 %, and the
UK, where the target price was, we had all agreed
previously,
to be increased in two phases, would be
fixed later’ (44).

(145) The wide gap between the European target price of
6,20 DEM/kg (USD 3,80) and the Far East
target of
only USD 3,30 to 3,40 (= DEM 5,25 to 5,40) was a
cause of concern. Was the differential to be maintained,
there was strong risk of product exported from Europe
flowing back and destabilising the price.

(146) The next meeting of the cartel members was held in
Hamburg on 6 September 1993 ([ ]* notes (45)). This
meeting dealt with the proposed acquisition by ADM
(Archer Daniels Midland) of a 25 % interest in Rhône-
Poulenc's plant in Institute, Virginia. There was also a
long examination of Novus's profitability, its position in
the market and its objectives. The participants engaged
in speculation as
to what Novus could achieve by
increasing prices as well as asking cryptically whether
‘they need another lesson?’).

(147) The proposal

]* (European
from Degussa was that
Director for Novus) should be allowed to prove his
mettle by putting up Novus's prices by 15 % in return
for a guarantee on volumes and customers (46) (47).

[

(148) As can be seen from the concluding notes in [

]*
minute, a volume allocation scheme had been mooted:
‘Figures 8 Regions (not countries/customers) only once
Novus takes part; only when the market share targets
are known’.

(149) The basis foreseen for

the above statement

the scheme — which would
include a compensation mechanism — was to be the
achieved sales in the past three years (1990 to 1992). In
its reply to the statement of objections, Degussa submits
that
should be understood as
meaning that [ ]* did not believe that a volume alloca-
tion system could be implemented without Novus's
cooperation. Degussa submits in its reply to the state-
ment of objections that the regular exchange of volume
figures (see table on page 198 of the file) served as a
basis for agreeing changes in the target price and never
resulted in the allocation of volumes or clients between
the participants.

(150) During the following meeting in Tokyo on 2 December
1993 (the hand-written date ‘2.12.92’ is a mistake), the
usual
themes of controlling Russian sales and Novus
were examined (48). Clearly the participants were worried
about the challenge from Novus which was gaining the
highest share of the methionine market with its liquid
analogue. It had gained 500 tonnes of sales in Europe
while Rhône-Poulenc, Degussa and Nippon Soda had
seen their relative market shares decline (see the table
at the bottom of page 3 of the note).

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(151) The relative bio-efficiency of DLM and MHA in tonnage
terms was also discussed. In its reply to the Commis-
sion's statement of objections, Degussa explains that this
concerned a proposal by Degussa to set the target price
for MHA at 80 % of
the target price for DLM (for
Europe).

(157) Degussa duly made the announcement of a Europe-wide
price rise to DEM 5,50 in the trade press (‘Ernährungs-
dienst’) on 4 June 1994. Rhône-Poulenc was also
reported (Les Marchés on 16 June 1994) as having
increased its prices
and liquid
for both powder
(Rhodimet AT 88) methionine by 10 % (53).

(152) The producers' consistent efforts

is again apparent

to maintain prices
(identified by Rhône-Poulenc as their main preoccupa-
tion, statement p. 5)
from the list
attached to [ ]* note and bearing the same date. It is
clear that the downward pressure on pricing identified
the Nice meeting had obliged the participants to
at
lower their targets. The 6,20 DEM/kg target was no
longer considered realistic. For each national market
([ ]* all the then Member States) the note states (i) the
‘target’ price (‘Ziel Q3/93’)
in national currency and
the ‘limit’ price in the same
DEM or equivalent;
currencies for the same period; (iii) some ‘actual’ prices
(UK, D, NL, F, E, I) and the equivalent price for Alimet
and Rhône-Poulenc liquid (AT 88).

(ii)

(153) The ‘target’ price (fixed at the beginning of the year at
DEM 6,20) was now to be DEM 5,65, and the ‘limit’
these prices were,
price DEM 5,50.
however,
to
DEM 5,40 and DEM 5,20 respectively (49).

revised even further downwards,

seems

later

that

It

(154) The next regular meeting, for which [ ]* kept his usual
detailed notes (50), was held in Berlin on 1 to 3 March
1994. The price had continued to slide and it was
proposed to initiate an increase in May/June. A review
was made of prices in the different European national
markets with reference being made to individual custo-
mers, new prices and limit prices.

(155)

In connection with this meeting a price schedule (in the
same format as that attached to earlier reports) was
prepared and updated as at the end of January 1994
retaining the target of DEM 5,40 and the equivalent in
other currencies but with new ‘rock bottom’ prices in
each national market; the last column headed ‘remarks’
(‘Bemerkungen’)
of handwritten
annotation ‘until 15.5.
minimum prices with the
Degussa to announce 5,50’ (51).

a number

shows

(156) Another quarterly meeting took place in Königstein on
or about 7 June 1994 (52) ([ ]* notes include comments
Italy, Spain and Belgium). For
on prices in Denmark,
‘Alle
Denmark the brief note
informiert,
mündlich’ (‘all informed, orally’), presumably a reference
coming price
to customers being warned of
increase.

is made

the

(158)

[ ]* again made comprehensive notes in preparation for
the trilateral meeting in November 1994 (54). The price
situation in each country is summarised with comments
on individual customers.

(159)

In Germany (for example)
the market prices were
between DEM 5,05 and DEM 5,15. At one customer
(Bela)
the price was even below DEM 5,00; Rhône-
Poulenc was suspected of selling it Russian material.
Prices in France were considered satisfactory but
the
quantities a ‘catastrophe’.

(160)

[ ]* referred to a price increase (presumably that of
summer 1994) and noted that the ‘target’ had not been
achieved: bulk deliveries were selling at under 5,0 DEM/
kg. The succinct comment ‘update price list’ is made.

(161)

[ ]* seems also to have met or contacted Nippon Soda
just before the main meeting,
on 24 November 1994,
and discussed prices in Germany, Belgium, the Nether-
lands and the United Kingdom (55).

(162)

In the last meeting for which [ ]* kept notes (56) — it
was held in the Hotel Juan Carlos I in Barcelona on 27
to 29 November 1994 — after the usual discussions on
Russia, China and Novus, the participants reflected on
failure to take a strategic view of market
their past
development.

(163) There had been a ‘steady improvement’

in the profit-
ability of methionine between 1991 and 1993, but 1994
had seen profit margins shrink.

(164)

[ ]* observations — and the position of the others —
are recorded as follows:

‘In the past:
solved; ??

compensation after

a problem was

We do not act strategic, but only by tactics in individual
cases;

Sales people determine the business.

“I am willing to compensate for business others have
lost”: [ ]*

Proposal: Always compensate for volume losses in 1995,
good situation as Novus stocks are low.’

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(165)

It was in this meeting that the volume control scheme
was again examined:

Rhône-Poulenc, Degussa, Nippon Soda and Sumitomo
worldwide and for each region ([ ]*) in 1993, 1994 and
1995.

‘ “1995 Targets”

[ ]* proposal: Indexation based on 1994 sales volume (=
100 %).

After 1st quarter sit together and compare figures after
2nd Q…’

(166) The producers also considered the prices in each market,
possibly in a separate session (57). [ ]* again recorded the
discussions in some detail. [ ]* of Rhône-Poulenc looked
back with nostalgia on earlier years:

‘It never was a problem between [ ]* (58) and myself; so
many things were regulated afterwards’.

(167)

In Europe the going rate was now DEM 5,20. A new
target of DEM 5,80 was agreed, and the new price was
to be announced in the trade press to take effect on
1 January 1995 (in Italy and the United Kingdom the
targets and limit prices were to be effective ‘immediately,
no exceptions!’).

(172) The table, which was compiled from a computerised
data base by Degussa and regularly updated, shows the
tonnages
sold by each producer on each national
market. Although Degussa claims that the data for its
competitors was obtained from Degussa's own ‘internal’
sources,
the figures would
indicate otherwise as would the fact that sales data was
regularly exchanged during meetings. The spreadsheets
were distributed inside Degussa by [ ]* to [ ]*, [ ]* and
[ ]*, all of whom were regular participants in the cartel
meetings.

the accuracy of many of

(173) According to Rhône-Poulenc (statement, p. 5), the quar-
terly cartel meetings continued until July 1998.

(174)

[ ]* ceased to be head of marketing for feed additives in
October 1994 (when he became responsible for Business
Development) and apparently no longer attended meet-
ings. As a result no detailed notes have been found for
the period after the Barcelona meeting.

request

(168) The reactions of the participants to Degussa's proposal
on quotas are not recorded. In its reply of 9 September
1999 to the Commission's
information
(p. 21), Degussa claims that [ ]* suggestion was not
taken up. It argues that it was not worth conducting
such an exercise: since the three participants together
had only 65 % of the market, exchanging their figures
the market.
would not give an accurate picture of
reply to the
Degussa confirms
Commission's statement of objections.

its position in its

for

(169) Though the participants may never have implemented a
volume allocation system, they did regularly exchange
Indeed, Rhône-Poulenc mentions in its
sales figures.
Statement
that during the meetings the three
competitors ‘often exchanged sales figures calculated on
a regional or country-by-country basis’. It subsequently
retracted that declaration in its supplemental submission,
p. 5.

(p. 5)

(170) Nippon Soda, however, confirms that the trilateral meet-
ings usually involved, inter alia, the exchange of informa-
tion concerning supplies of
for
methionine, capacities, rates of operation of plants and
submission,
demand for
p. 12).

the main materials

(supplemental

the product

(171) A handwritten table was also found at Degussa (59)
shares of Novus,

comparing the percentage market

(175)

It is reasonable to presume, in the absence of any other
detailed record of the meetings, that they continued to
have broadly the same purpose and subject matter as
its reply
before (Nippon Soda claims on page 13 of
under Article 11 of 23 February 2000 (60)
they
that
pricing
the
became
arrangements
through the mutual
exchange of information than the setting of fixed prices,
but there is no documentary evidence to confirm this).

functioned more

‘increasingly

ceremonial’

and

(176) Rhône-Poulenc for its part has supplied (supplemental
submission, p. 18 and attachment (61)) management
instructions on prices for 1997 which it says reflect
target prices for individual regions ‘which were within
the target range of prices agreed to at
the meetings
described’. Even if they were now ‘Friendship meetings’,
the ceremonial included the fixing of targets, as before.

(177) Degussa does not list any meetings after the one held
on 13 to 14 October 1997 in Copenhagen. Nippon
Soda identifies one more meeting in Düsseldorf on
13 May 1998 (p. 10 of its reply (62)).

(178) Rhône-Poulenc,

however,

describes

(supplemental
submission, pp. 8 to 9 (63)) three more meetings held
during the last year of the cartel's operation from the
the final
Copenhagen meeting in October 1997 until
meeting in Nancy on 4 February 1999.

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(179)

]*, Degussa [

]* and
In May 1998 Rhône-Poulenc [
Nippon Soda [ ]* met in Frankfurt (Nippon Soda says
that it was in fact in Düsseldorf on 13 May). The two
European companies explained for the benefit of
the
new Nippon Soda people how the meetings had gone in
the past and informed them that prices had to be
increased; Nippon Soda agreed to follow any price
initiative
submission,
p. 8 (64)).

(Rhône-Poulenc

supplemental

5. THE END OF THE CARTEL

(180) After [ ]* departure from Rhône-Poulenc in the autumn
of 1997, his replacement as [ ]* ([ ]*) instructed manage-
to end all contact with
ment
competitors. [ ]* called [ ]* (Degussa), [ ]* (Novus), [ ]*
(Nippon Soda) and [ ]* (Sumitomo) to inform them of
this instruction (supplemental statement, p. 9 (65)).

(says Rhône-Poulenc)

(181)

[ ]* career at RPAN was short-lived. On becoming [ ]*
in March 1998, [ ]* authorised the company's executives
to resume/continue communications with their competi-
tors; the quarterly meetings were, however, to be discon-
tinued, presumably because of their high visibility and
the associated risk of discovery (by this time the inves-
tigations of the US antitrust authorities in the vitamins
sector were already well advanced).

(182) The next meeting identified by Rhône-Poulenc took
place in Heidelberg in late summer/early autumn of
1998 after prices had begun to decline in mid-1998.
[ ]* and [ ]* attended from Rhône-Poulenc; [ ]* and [ ]*
represented Degussa. They agreed to increase prices.
Nippon Soda did not attend these meetings.

[

[

[

]* and [

(183) The last known meeting, at the Mercure Hotel in Nancy
on 4 February 1999, was again attended only by
]*. However,
and Rhône-Poulenc
]*
Degussa
]* discussed
according to Nippon Soda,
conditions on the market over dinner
in Paris that
evening (Article 11 reply, p. 12 (66)). According to
Rhône-Poulenc, the participants in the Nancy meeting
assessed the total size of
]* market and the
producers' respective positions; Degussa's market intelli-
gence is said by Rhône-Poulenc to have been ‘very
good’. A target price of USD 3,20/DEM 5,30 was
agreed.

the [

(185) These contacts were only ended in February 1999 when
senior management at Rhône-Poulenc gave renewed
instructions to terminate the practice (Rhône-Poulenc
supplemental submission, p. 10 (67)).

PART II — LEGAL ASSESSMENT

A. JURISDICTION

(186) The arrangements set out above applied to all consu-
mers of methionine established in the countries of the
EEA.

(187) The EEA Agreement, which contains provisions on
competition modelled on the EC Treaty, came into force
on 1 January 1994. This Decision therefore includes the
application as from that date of the rules on competi-
tion of the EEA Agreement (in particular Article 53(1))
to the arrangements to which objection is taken (68).

(188)

(189)

In so far as the arrangements affected competition in
the common market and trade between Community
Member States, Article 81 of the Treaty is applicable.
In so far as the cartel operations had an effect on trade
between the Community
and EFTA countries or
between EFTA countries which were part of the EEA,
Article 53 of the EEA Agreement is applicable.

If an agreement or practice affects only trade between
the Commission
the Community,
Member States of
retains competence and applies Article 81 of the Treaty.
If, however, an agreement affects only trade between
EFTA States, then the EFTA Surveillance Authority (ESA)
has sole competence and will apply the EEA competi-
tion rules in Article 53 of the EEA Agreement (69).

(190)

the Commission is competent under
In this case,
to apply both
the EEA Agreement
Article 56 of
Article 81(1) of
the
the Treaty and Article 53(1) of
EEA Agreement because the cartel had an appreciable
effect on trade between Community Member States (70).

B. APPLICATION OF ARTICLE 81 OF THE EC TREATY

AND ARTICLE 53 OF THE EEA AGREEMENT

(184)

It was presumably on the occasion of the meeting in
May 1998 that arrangements were made to cease ‘club’
meetings and to maintain bilateral contacts. Besides the
two meetings in Heidelberg and Copenhagen between
Degussa and Rhône-Poulenc, [ ]* and [ ]* of Rhône-
Poulenc continued their telephone contacts with their
counterparts at Nippon Soda.

1. ARTICLE 81(1) OF THE EC TREATY AND ARTICLE 53(1)

OF THE EEA AGREEMENT

(191) Article 81(1) of the EC Treaty prohibits, as incompatible
with the common market, all agreements between
undertakings, decisions by associations of undertakings
or concerted practices which may affect trade between
Member States and which have as their object or effect

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the prevention, restriction or distortion of competition
within the common market, and in particular
those
which directly or indirectly fix purchase or selling prices
or any other trading conditions, limit or control produc-
tion and markets, or share markets or sources of supply.

(192) Article 53(1) of the EEA Agreement (which is modelled
on Article 81(1) of the EC Treaty) contains a similar
prohibition. However the reference in Article 81(1) to
trade ‘between Member States’ is replaced by a reference
to trade ‘between contracting parties’ and the reference
to competition ‘within the common market’ is replaced
by a reference to competition ‘within the territory
covered by… (the EEA) Agreement’.

2. AGREEMENTS AND CONCERTED PRACTICES

(193) Article 81(1) of the Treaty and Article 53 of the EEA
Agreement prohibit agreements, decisions of associa-
tions and concerted practices.

their

(194) An agreement can be said to exist when the parties
adhere to a common plan, which limits or is likely to
individual commercial conduct by deter-
limit
mining the lines of their mutual action or abstention
from action in the market. It does not have to be made
in writing; no formalities are necessary, and no contrac-
tual sanctions or enforcement measures are required.
The fact of agreement may be explicit or implicit in
the behaviour of the parties.

the right

to
dence does not deprive undertakings of
adapt themselves intelligently to the existing or antici-
pated conduct of their competitors, it strictly precludes
any direct or indirect contact between such operators,
the objet or effect whereof
is either to influence the
conduct on the market of an actual or potential compe-
titor or to disclose to such a competitor the course of
conduct which they themselves have decided to adopt or
contemplate adopting on the market (74).

(198) Thus

a
conduct may fall under Article 81(1)
‘concerted practice’ even where the parties have not
explicitly subscribed to a common plan defining their
action in the market but knowingly adopt or adhere to
collusive devices which facilitate the coordination of
their commercial behaviour (75).

as

(199) Although in terms of Article 81(1) the concept of a
concerted practice requires not only concertation but
also conduct on the market resulting from the concerta-
tion and having a causal connection with it, it may be
presumed, subject to proof to the contrary, that under-
takings
concertation and
remaining active in the market will take account of the
information exchanged with competitors in determining
their own conduct on the market, all the more so when
the concertation occurs on a regular basis and over a
long period (76).

taking part

in such a

(195)

In its judgment in Joined Cases T-305/94, etc. Limburgse
Vinyl Maatschappij NV and others v Commission (PVC
II) (71), the Court of First Instance stated that ‘it is well
established in the case law that
there to be an
agreement within the meaning of Article [81(1)] of the
Treaty it
to have
expressed their joint intention to behave on the market
in a certain way’.

the undertakings

sufficient

for

for

is

(200)

(196) Article 81 of the Treaty (72) draws a distinction between
the concept of ‘concerted practices’ and that of ‘agree-
ments between undertakings’ or of ‘decisions by associa-
tions of undertakings’; the object is to bring within the
that Article a form of coordination
prohibition of
between undertakings which, without having reached
the stage where an agreement properly so called has
been concluded, knowingly substitutes practical coopera-
tion between them for the risks of competition (73).

(197) The criteria of coordination and cooperation laid down
by the case law of the Court, far from requiring the
elaboration of an actual plan, must be understood in the
light of the concept inherent in the provisions of the
Treaty relating to competition, according to which each
economic operator must determine independently the
in the
commercial policy which he intends to adopt
common market. Although that requirement of indepen-

(201)

that

long duration,

It is not necessary, particularly in the case of a complex
infringement of
the Commission
characterise it as exclusively one or other of these forms
of
illegal behaviour. The concepts of agreement and
concerted practice are fluid and may overlap. Indeed, it
may not even be possible realistically to make any such
distinction, as an infringement may present simulta-
neously the characteristics of each form of prohibited
conduct, while considered in isolation some of
its
manifestations could accurately be described as one
It would however be artificial
rather than the other.
analytically to subdivide what
is clearly a continuing
common enterprise having one and the same overall
objective into several discrete forms of infringement. A
cartel may therefore be an agreement and a concerted
the same time. Article 81 lays down no
practice at
specific category for a complex infringement of
this
type (77).

to regulate

In its PVC II judgment, the Court of First Instance stated
that ‘[i]n the context of a complex infringement which
involves many producers seeking over a number of
years
the
Commission cannot be expected to classify the infringe-
ment precisely, for each undertaking and for any given
moment, as in any event both those forms of infringe-
ment are covered by Article [81] of the Treaty’ (78).

the market between them,

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(202) An ‘agreement’ for the purposes of Article 81(1) does
not require the same certainty as would be necessary for
law.
the enforcement of a commercial contract at civil
Moreover,
long
in the case of a complex cartel of
duration, the term ‘agreement’ can properly be applied
not only to any overall plan or to the terms expressly
agreed but also to the implementation of what has been
agreed on the basis of
the same mechanisms and in
pursuance of the same common purpose.

the other participants pursuant

to the same
acts of
infringement. This is certainly the case where it
is
established that the undertaking in question was aware
of the unlawful behaviour of the other participants or
could have reasonably foreseen or been aware of them
and was prepared to take the risk (80).

3. SINGLE, CONTINUOUS INFRINGEMENT

(203) Although a cartel is a joint enterprise, each participant
in the agreement may play its own particular role. One
or more may exercise a dominant role as ringleader(s).
Internal conflicts and rivalries, or even cheating may
occur, but will not however prevent the arrangement
from constituting an agreement/concerted practice for
the purposes of Article 81(1) of
the EC Treaty and
Article 53(1) of the EEA Agreement where there is a
single common and continuing objective. A complex
cartel may properly be viewed as a single continuing
infringement for the time frame in which it existed. The
agreement may well be varied from time to time, or its
mechanisms adapted or strengthened to take account of
new developments.

for around 60 % of

(206) From February 1986 to February 1999, there is ample
evidence to show the existence of a single and contin-
uous collusion in the EEA market
for methionine
between Aventis, Nippon Soda and Degussa which
together account
this market.
Indeed, the parties expressed to each other their joint
intention to behave on the market in a certain way and
adhered to a common plan to limit
their individual
commercial conduct. The agreement to enter into this
plan with a view to restricting competition can therefore
be dated back at least to February 1986. This collusion
was in pursuit of a single anti-competitive economic
aim: preventing price competition by agreeing on target
prices and price increases.

(204)

infringement. As

Indeed, in a complex cartel of long duration, where the
various concerted practices
followed and agreements
concluded form part of a series of efforts made by the
in pursuit of a common objective of
undertakings
preventing or distorting competition,
the Commission
is entitled to find that they constitute a single contin-
uous
Instance
in Case T-7/89 Hercules v
observed on this point
Commission (79),
it would be artificial to split up such
continuous conduct, characterised by a single purpose,
by treating it as a number of separate infringements:
‘the fact is that the [undertakings] took part — over a
period of years — in an integrated set of schemes
constituting a single infringement, which progressively
manifested itself
in both unlawful agreements and
unlawful concerted practices.’

the Court of First

(205) The mere fact that each participant in a cartel may play
the role which is appropriate to its own specific circum-
stances does not exclude its responsibility for the infrin-
gement as a whole,
including acts committed by other
participants but which share the same unlawful purpose
and the same anti-competitive effect. An undertaking
in the common unlawful enterprise
which takes part
by actions which contribute to the realisation of
the
for the whole
shared objective is equally responsible,
period of its adherence to the common scheme, for the

(207) This plan, which was subscribed to by Rhône-Poulenc,
Nippon Soda and Degussa, was developed and imple-
mented over a period of almost 13 years, through a
complex of collusive arrangements, specific agreements
and/or concerted practices, pursuing the same common
purpose of eliminating competition between them. The
participants in these unlawful conducts knew, or ought
to have known, that it was part of an overall plan in
pursuit of that common unlawful object (81).

(208) Given the common design and common objective
which the producers steadily pursued of eliminating
competition in the methionine industry, the Commis-
sion considers that the conduct in question constituted a
single continuing infringement of Article 81(1) EC and
Article 53(1) EEA. These arrangements are described in
detail in the factual part of this Decision. This descrip-
tion is supported by widespread and clear evidence,
systematically referred to throughout
the text. The
conduct in question constituted therefore a single conti-
and
nuing
Article 53(1) EEA.

infringement

of Article

81(1)

EC

(209) Although the arrangements between the producers could
rightly be considered as presenting all the characteristics
of a full ‘agreement’, some factual elements of the illicit
conduct could aptly be described as a concerted practice
were it appropriate to do so.

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(210)

In its reply to the statement of objections, Degussa
contests the Commission's assertion that,
though the
‘summit’ meetings (i.e. senior level meetings between
divisional managers) may have ended in 1988,
there
was nevertheless a continuous infringement since 1986
‘staff’ meetings were not
because the more frequent
interrupted and continued. Degussa claims that
is
impossible that decisions would have been taken or
agreements entered into at ‘staff’ level after meetings at
senior level were ended. Furthermore, Degussa avers that
the Commission fails to establish a link of continuity
between the two categories of meetings, nor who would
have participated in the alleged ‘staff’ level meetings.

it

(211) According to Degussa, the meetings ceased at the end of
1988 and Degussa first participated in the infringement
at the meeting held in mid-1992 (82).

(212)

it

Indeed,

interrupted.

recitals 95 to 125,

the argument
In the light of
according to which there was no continuation of the
illegal
scheme between 1988 and 1992 must be
dismissed. As stated in recital 97, not only did the
participants never manifest any intention to terminate
the arrangements, but the operation of the cartel was
never
in
recitals 95 to 125 that the participants continued to
take part in meetings throughout 1989, 1990 and 1991
from what
without publicly distancing
occurred at them. Given the manifestly anti-competitive
nature of the earlier meetings, the lack of evidence that
the participation in the meetings was without any anti-
competitive intention establishes that the illegal scheme
was in fact continued (83). The question of whether the
agreements and/or concerted practices were actually
implemented is addressed in recitals 278 to 281.

demonstrated

themselves

is

4. RESTRICTION OF COMPETITION

(213) Article 81(1) of the EC Treaty and Article 53(1) of the
restrictive of

EEA Agreement expressly mention as
competition agreements which

(218)

— directly or indirectly fix selling prices or any other

trading conditions,

— limit or control production,

— share markets or sources of supply.

(214)

In the complex of agreements and arrangements consid-
ered in this case, the following elements can be identi-
to find a breach of
fied as
Article 81(1) of the EC Treaty and Article 53(1) of the
EEA Agreement:

in order

relevant

— the agreement of target and minimum prices,

— the agreement of concerted price increases,

— the

concerted

implementation
increases in the different markets,

of

those

price

— the exchange of information on sales figures in order

to monitor the market shares achieved,

— the concerted pricing to individual customers,

— the concerted limitation, prevention or ‘holding’ of
to

from outside the Community so as

imports
ensure the success of price increases,

— the participation in regular meetings and other
to agree the above restrictions

contacts in order
and to implement and/or modify them as required.

(215) These kinds of arrangements have as their object the
restriction of
competition within the meaning of
Article 81(1) of the EC Treaty and Article 53(1) of the
EEA Agreement. Price being the main instrument of
competition,
the various collusive arrangements and
mechanisms adopted by the producers were all ulti-
mately aimed at
inflating prices to their benefit and
above the level which would be determined by condi-
tions of free competition.

(216)

In order
the EC
to conclude that Articles 81(1) of
Treaty and 53(1) of the EEA Agreement apply, there is
no need to consider the actual effects on competition of
an agreement once it is established that the agreements
had the object of restricting competition (84).

(217) However,

Indeed,

the cartel also had a restrictive effect on
the target prices and price rises
the cartel, were
and implemented

competition.
which were the primary objective of
agreed,
throughout the EEA.

announced to customers

In their replies to the statement of objections, Degussa
and Nippon Soda claim that the Commission has failed
restrictive
to demonstrate that
impact on competition. The restrictive effect of
the
arrangements in question is established in more detail
in recitals 271 to 291.

there was an actual

5. EFFECT ON TRADE BETWEEN COMMUNITY MEMBER

STATES AND BETWEEN EEA CONTRACTING PARTIES

(219) The continuing agreement between the producers had
an appreciable effect on trade between Member States of
the Community and between contracting parties to the
EEA Agreement.

(220) Article 81(1) of the EC Treaty is aimed at agreements
which might harm the attainment of a single market
between the Member States, whether by partitioning
national markets or by affecting the structure of compe-
tition within
Similarly,
Article 53(1) of
is directed at
agreements which undermine the realisation of a homo-
geneous European Economic Area.

the
the EEA Agreement

common market.

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(221) As demonstrated in the section ‘intra-Community trade’
(recital 50), the methionine market is characterised by a
substantial volume of
trade between Member States.
There was also a considerable volume of trade between
the Community and EFTA members of
the EEA.
Norway imports 100 % of its methionine requirements,
primarily from the Community, as did Austria, Finland
and Sweden prior to accession.

(222) The application of Articles 81(1) of

the Treaty and
53(1) of the EEA Agreement to a cartel is not, however,
limited to that part of the members' sales which actually
involve the transfer of goods from one State to another.
in order for these provisions to
Nor is it necessary,
apply,
the individual contact of each
to show that
participant, as opposed to the cartel as a whole, affected
trade between Member States (85).

(223)

In this case, the cartel arrangements covered over two
thirds of all trade throughout the EC and EEA in this
important industrial sector. The existence of price-fixing
and a quota mechanism must have resulted, or was
trade
likely to result,
patterns from the course they would otherwise have
followed (86).

in the automatic diversion of

6. PROVISIONS OF COMPETITION RULES APPLICABLE TO

AUSTRIA, FINLAND, NORWAY AND SWEDEN

C. ADDRESSEES

1. PRINCIPLES APPLICABLE

(228)

In order to identify the addressees of this Decision, it is
necessary to determine the legal entities responsible for
the infringement.

(229) The subject of Community and EEA competition rules is
the ‘undertaking’, a concept that is not identical with the
notion of
in national
law. The term ‘under-
commercial company or fiscal
taking’
It may however
refer to any entity engaged in a commercial activity.

is not defined in the Treaty.

legal personality

corporate

the Treaty and Article 53 of

(230) According to the circumstances, it might be possible to
treat as the relevant ‘undertaking’ for the purposes of
Article 81 of
the EEA
Agreement the whole group or individual subgroups or
subsidiary companies. In this regard, in order to deter-
mine whether a parent company should be held respon-
sible for the unlawful conduct of a subsidiary,
is
the subsidiary ‘does not
necessary to establish that
decide independently upon its own conduct on the
market, but carries out,
the
instructions given to it by the parent company’ (87). In
the AEG-Telefunken (88) and BPB Industries (89) cases, the
Court ruled that when a subsidiary is wholly owned, it
necessarily follows in principle the policy laid down by
its parent company.

in all material respects,

it

(224) The EEA Agreement entered into force on 1 January
1994. For the period prior to that date during which
the only provision applicable to
the cartel operated,
these proceedings
the EC Treaty.
is Article 81 of
Article 81 does not cover any restriction of competition
by the cartel arrangements in Austria, Finland, Iceland,
Liechtenstein, Norway and Sweden (then EFTA Member
States prior to 1 January 1994.

(231)

(225)

In the period 1 January to 31 December 1994,
the
provisions of
the EEA Agreement applied to the six
EFTA Member States. The cartel
therefore breached
and
both Article 53(1) of
Article 81(1) of the EC Treaty, and the Commission is
competent to apply both provisions. The restriction of
competition in these six EFTA states during this one-
year period falls under Article 53(1) of the EEA Agree-
ment.

EEA Agreement

the

(226) After the accession of Austria, Finland and Sweden to
the Community on 1 January 1995, Article 81(1) of the
Treaty became applicable to the cartel
in so far as it
affected competition on those markets. The operation of
the
of
cartel
Article 53(1) EEA.

in Norway

remained

breach

in

(227)

In practice, the result is that the cartel's operation in
Austria, Finland, Norway and Sweden breached EEA
and/or Community competition rules as from 1 January
1994.

that

In the Stora Kopparbergs Bergslags AB (90) case,
the
Court upheld the Court of First Instance finding that a
parent company was liable for its subsidiary's conduct,
stating that ‘as [the] subsidiary was wholly owned, the
CFI could legitimately assume (…)
the parent
company in fact exercised decisive influence over its
subsidiary's conduct, particularly since it had found (…)
[the parent
that during the administrative procedure,
company] had presented itself
the
Commission's sole interlocutor concerning the infringe-
ment in question’. This confirms a presumption that the
parent company of a wholly owned subsidiary exercises
In the
decisive influence over its subsidiary's conduct.
this presumption was
cited case,
validity of
the
confirmed by an additional
i.e. the conduct
of the parent company.

as being (…)

indication,

(232) When an infringement of Article 81(1)EC and/or
Article 53(1)EEA is found to have been committed
over a given period of time,
it is necessary to identify
the natural or legal person who was responsible for the
operation of the undertaking at the time of the infringe-
ment.

(233) When an undertaking commits an infringement of
Article 81(1)EC and/or Article 53(1)EEA and later
disposes of the assets that served as the vehicle of the
infringement and thereby withdraws from the market
concerned, the undertaking in question will continue to
be held responsible for the infringement over the period
considered, if it is still in existence (91).

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2. ADDRESSEES OF THE DECISION

(234)

In this case, Rhône-Poulenc has changed its legal form
since the ending or presumed ending of its involvement
in the infringement.

(235) A change in legal form or corporate identity does not,
however, relieve an undertaking of liability to penalties
for the anti-competitive behaviour. Liability for a fine
may thus pass to a successor where the corporate
identity which committed the violation has ceased to
exist in law.

entity. There is an obvious continuity between Rhône-
Poulenc and the new entity into which it has been
subsumed. Rhône-Poulenc ceased to exist in law and its
legal personality as well as all
its physical and human
elements were transferred to Aventis SA.

(242) Apart from the succession of

liability between Rhône-
Poulenc and Aventis (discussed above),
the issue of
attribution of liability to the subsidiary or to its parent
company must also be discussed. The Commission
addressed its statement of objections to both Aventis
SA and AAN.

(236) This is because the subject of the competition rules in
the EC Treaty (and the EEA Agreement) is the under-
taking, a concept not necessarily identical to the notion
of corporate legal personality in national commercial,
company or fiscal law.

(243)

(237) The ‘undertaking’ is not defined in the EC Treaty. It may
refer to any entity engaged in commercial activity. In the
case of a large multinational corporation the myriad
subsidiaries,
the complex network of ownership and
shareholdings and the organisation for management
purposes of the group's activities into separate opera-
tional or functional divisions and/or geographical areas
not necessarily corresponding to its corporate structure,
may give rise to complications. The Court of First
Instance has found that ‘Article 81(1) of the Treaty is
aimed at economic units which consist of a unitary
intangible
organisation
elements, which pursues a specific economic aim on a
long-term basis and can contribute to the commission
of an infringement of
the kind referred to in that
provision’ (92).

personal,

tangible

and

of

(238) Furthermore, while the subject of the competition rules
are undertakings, enforcement of
the rules and the
imposition and collection of any penalty require the
identification of a specific legal person responsible for
the conduct of
that undertaking and to which the
proceedings can be addressed.

(239) As the Court of First Instance observed in Case T-6/89
Enichem Anic v Commission (93), where between the
commission of
the infringement and the time the
person responsible for the operation of that undertaking
has ceased to exist in law, it is necessary first to find the
combination of physical and human elements which
contributed to the commission of
the infringement,
and then to identify the person now responsible for
their operation.

(240) The legal or corporate person on which the fine is
imposed may therefore be different
from that which
existed at the time of the commission of the infringe-
ment.

(241)

case of Rhône-Poulenc, as

In the
indicated under
recitals 10 to 17, its full merger with Hoechst to form
Aventis means that responsibility passes to the new

In support

formerly RPAN.

In this respect, Aventis SA is of the opinion that the
final decision should exclusively be addressed to its
subsidiary AAN,
thereof,
Aventis argues (94) that AAN and its subsidiaries form a
self-sustained subgroup of
the Rhône-Poulenc (now
Aventis) group,
in which the involvement of the ulti-
mate parent company Aventis SA is confined to exer-
cising the supervisory functions customary for majority
that addressing the Decision to AAN
shareholders;
would avoid unnecessarily jeopardising the reputation
of Hoechst AG (with which Rhône-Poulenc merged in
December 1999) and Aventis SA (the ultimate parent
company of
that where within a
group of companies the business responsibility for a
certain business is so clearly allocated to, and taken
care of by, one defined subgroup, there can be no right
to choose whether the decision of the Commission is
addressed to the parent company or to the affiliated
companies responsible within a group; and, finally, that
Aventis SA informed the Commission that the addressee
should have been AAN soon after receiving the state-
ment of objections, and thus, Aventis SA claims that it
did not present itself as the correct addressee during the
entire proceedings.

the merged entity);

the

(244) RPAN (now AAN) was the entity within Rhône-Poulenc
responsible for
the methionine business during the
entire period of the infringement. Its direct participation
is established by the facts and is not
in the cartel
that
contested. The Commission considers however
(now
both RPAN (now AAN)
and Rhône-Poulenc
Aventis) may be held responsible for
the conduct
throughout
infringement period. Besides being
RPAN's sole shareholder throughout the whole of the
infringement period (see recitals 230 and 231), Rhône-
Poulenc SA (and later Aventis SA) was the Commission's
sole interlocutor during the administrative proceedings
(submitting two statements), having itself spontaneously
approached the Commission on a voluntary basis before
receiving the statement of objections. At no point did
the undertaking deny its awareness of
the cartels in
which RPAN was directly involved, and at no point
prior to receiving the statement of objections did it
contest the imputation of the infringement.

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(245) Moreover, Aventis' legal representatives represented both
Aventis SA and AAN throughout the entire proceedings.
Indeed, on 21 December 2001 the legal counsel of
Aventis SA and Aventis Animal Nutrition SA informed
the Commission that
they would submit a single
response to the Commission's statements of objections
on behalf of both companies

(246)

It should also be noted that RPAN was directly attached
to the Plant and Animal Health Division of Rhône-
Poulenc (now Aventis Agriculture), a wholly-owned
subsidiary, directly reporting to it. In its turn, the Plant
and Animal Health Division of Rhône-Poulenc followed
the ultimate parent
instructions from Rhône-Poulenc,
company responsible for the management of the group:
its [ ]*, [ ]* (who later moved to Aventis Agriculture) is
also a member of the Executive Committee of Rhône-
Poulenc (now Aventis).

(247) On the basis of the above, the Commission finds that
Aventis SA (formerly Rhône-Poulenc) can likewise be
held responsible for
subsidiary
throughout the infringement period. Under the circum-
stances of this case,
it appears appropriate to address
the decision both to AAN and Aventis SA. They should
be held jointly and severally liable for any fine.

the conduct of

its

(248)

In the case of Degussa, the only issue is the succession
of liability. Until
its merger with Hüls AG in 1998 to
form Degussa-Hüls AG, the company directly involved
in the cartel arrangements was Degussa AG (Frankfurt
am Main). Through a full merger with Hüls, Degussa
AG (Frankfurt am Main) ceased to exist in law and its
responsibilities and activities were transferred to the new
entity Degussa-Hüls AG. The
subsequent merger
between Degussa-Hüls and SKW Trostberg AG to form
Degussa AG (Düsseldorf) in 2001 meant that responsi-
bility passed to the new entity into which it has been
subsumed. The decision will therefore be addressed to
Degussa AG.

(249)

In this respect, Degussa submits that the Commission,
when calculating the fine, should only take into account
the economic size of the ‘old’ Degussa AG (Frankfurt
am Main) given that the subsequent mergers did not
change its position on the methionine market. The
actual
impact on the relevant market of the undertak-
ings concerned in consideration of their economic size
is dealt with under recital 297 et seq.

(250)

It is an established fact that Nippon Soda directly and
autonomously participated in the cartel. Consequently
the group as a whole bears responsibility for the infrin-
gement and is therefore an addressee of this Decision.

D. DURATION OF THE INFRINGEMENT

(251) Although bilateral contacts between methionine produ-
cers did take place before the initial multilateral meeting,

in this case limit its assessment
the Commission will
under Article 81 of the EC Treaty and Article 53 of the
EEA Agreement as well as the application of any fines
to the period from February 1986 onward when the
first known multilateral cartel meeting was held.
(see
recitals 82 to 85).

(252) As the documentation and information provided by
it was at this first multi-
Nippon Soda demonstrates,
lateral cartel meeting that
the participants agreed at
divisional level to fix quotas, set prices and hold regular
meetings at both ‘summit’ and ‘staff’ level.

(253) Rhône-Poulenc, Degussa and Nippon Soda participated
in that agreement. Rhône-Poulenc confirms, albeit with
less precision than Nippon Soda, that the cartel must
have come into being around the mid-1980s (Rhône-
Poulenc speaks of 1985). Given the detailed statement
and contemporaneous documents provided by Nippon
Soda on the operation of the cartel during the 1980s,
the Commission can pinpoint the birth of the cartel in
February 1986 (see recitals 82 to 85). Degussa claims
that it did not participate in the infringement until mid-
1992.
two meetings prior to that and
claims that they were unrelated to the ‘summit’ meetings
(see recitals 124 to 125). The Commission cannot
accept this version of events. It is clearly established in
the factual part of
this Decision that Degussa was
actually involved in the infringement from early 1986
(see, inter alia, recitals 82 to 89 and 96 to 121).

It admits just

(254) Note that,

in so far as it affected Austria, Finland,
Norway and Sweden, the cartel does not constitute an
infringement of competition rules before the entry into
force of the EEA Agreement on 1 January 1994.

(255) Though the original cartel meetings (‘summit’ meetings
held once or twice per year) ceased in their original
form by the end of 1988 (after one member had
announced that it was quitting the arrangements), the
evidence in the Commission's file clearly shows that not
only did the remaining parties never manifest any
intention of terminating the arrangements, but that the
continued unabated until
operation of
February 1999, contrary to what Degussa and Aventis
have submitted.

cartel

the

and the

(256) As established in the factual part of this Decision, the
change in situation caused by one member quitting the
arrangements
arrival on the market of
Monsanto with its analogue liquid product may have
required the remaining parties to adapt their collusion,
but the basic structure of
the scheme continued and
indeed evolved to meet the changing conditions. This
does not constitute the formation of a new cartel but
simply reflects the organic development of a complex
scheme of collusion.

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(257) The cartel continued until February 1999. Even though
the trilateral meetings between Degussa, Rhône-Poulenc
and Nippon Soda may have
ended in mid-1998,
contacts did not end (assuming they have ended) until
February 1999 (meeting of 4 February 1999 in Nancy).

ings that remain active in the methionine market and to
which this Decision is addressed to bring the infringe-
ment to an end, if they have not already done so, and
henceforth to refrain from any agreement, concerted
practice or decision of an association which might have
the same or similar object of effect.

(258) Degussa argues that

the Commission should consider
the meeting in Copenhagen in 1997 as the last date for
the infringement as far as Degussa is concerned. More-
over, in its reply to the statement of objections, Degussa
alleges that the Commission has failed to specify just
how long it considers Degussa to have been involved in
the cartel. It understands that the Commission alleges
Degussa to have participated until mid-1998.

(259) The Commission must dismiss these arguments. First,
the Commission has clearly indicated in points 61 and
99 of its statement of objections (German version) that
it considers Degussa to have participated in the infringe-
ment until February 1999. It cannot therefore claim that
its rights of defence would be infringed if the Commis-
sion were to consider Degussa to have participated in
the cartel beyond mid-1998. Secondly, the Commission
has
actually
continued to participate right up to the presumed end
of the cartel in February 1999 (see recitals 182 to 185).

sufficiently demonstrated that Degussa

E. REMEDIES

1. ARTICLE 3 OF REGULATION No 17

(260) Where the Commission finds there is an infringement of
Article 81(1) of the EC Treaty or Article 53(1) of the
the undertakings
EEA Agreement,
concerned to bring such infringement
to an end in
accordance with Article 3 of Regulation No 17 (95).

it may

require

(261)

In this circumstance, the Commission stated in its state-
ment of objections that it was not possible to declare
with absolute certainty that the infringement has ceased.

(262)

In its reply to the statement of objections, Aventis
emphasises that it has satisfied itself of
the complete
termination of AAN's involvement in any illegal methio-
nine agreements since the beginning of February 1999,
a few months before it approached the Commission to
disclose the methionine cartel. Nippon Soda pointed out
that it put an end to its participation in February 1999.
Degussa claims that it ended its participation in 1997.

(263) Notwithstanding these observations, and for the avoid-
it is necessary to require the undertak-

ance of doubt,

2. ARTICLE 15(2) OF REGULATION No 17

GENERAL CONSIDERATIONS

(264) Under Article 15(2) of Regulation No 17, the Commis-
sion may by decision impose upon undertakings fines
from one thousand to one million euro, or a sum in
excess thereof not exceeding 10 % of the turnover in
the preceding business year of each of the undertakings
participating in the infringement where, either intention-
ally or negligently, they infringe Article 81(1) of the EC
Treaty and/or Article 53(1) of the EEA Agreement.

(265)

In fixing the amount of any fine the Commission must
have regard to all relevant circumstances and particularly
the gravity and duration of the infringement, which are
the two criteria explicitly referred to in Article 15(2) of
Regulation No 17.

(266) The role played by each undertaking party to the
infringement will be assessed on an individual basis. In
particular,
in the fine
imposed any aggravating or attenuating circumstances
and will apply, as appropriate, the Notice on the non-
imposition or reduction of fines in cartel cases (96).

the Commission will

reflect

(267)

the

infringement,

the
In assessing the gravity of
Commission will take account of its nature,
its actual
impact on the market, where this can be measured, and
the size of the relevant market. The role played by each
undertaking party to the infringement will be assessed
on an individual basis.

THE AMOUNT OF THE FINE

(268) The cartel

constituted a deliberate infringement of
Articles 81(1) EC and 53(1) EEA: with full knowledge
of the restrictive character of their actions and, more-
over, of their illegality, leading producers of methionine
combined to set up a secret and institutionalised system
designed to restrict competition in a significant indus-
trial sector.

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1. The basic amount

(269) The basic amount is determined according to the gravity

and duration of the infringement.

the normal competitive pattern that
matters is that
would have governed the single market for methionine
was replaced by a system of collusion concerning the
price of the product, the essential component of compe-
tition. As such, the infringement of Article 81(1) EC and
53(1) EEA is considered to be very serious.

Gravity

(270)

In its assessment of the gravity of the infringement, the
Commission takes account of
its actual
impact on the market, where this can be measured,
and the size of the relevant geographic market.

its nature,

Nature of the infringement

(271)

It follows from the facts set out above that this infringe-
ment consisted of market-sharing and price-fixing prac-
tices, which are by their very nature the worst kind of
violations of Article 81(1) of the EC Treaty and 53(1) of
the EEA Agreement.

(272) The cartel arrangements involved major operators in the
EEA and were conceived, directed and encouraged at
high levels in each participating company (97). By its very
nature, the implementation of a cartel agreement of the
type described leads automatically to an important
distortion of competition, which is of exclusive benefit
to producers participating in the cartel and is highly
detrimental to customers and, ultimately, to the general
public.

(273) The Commission therefore considers that this infringe-
ment constituted by its nature a very serious infringe-
ment of Article 81(1) of the EC Treaty and Article 53(1)
of the EEA Agreement.

(274) Nippon Soda argues

the

not

that

does

contest

infringement

the Commission has not
sufficiently demonstrated the real gravity of the infringe-
ment in assessing the nature of the infringement (and
for the purpose of the assessment of any fine), although
it
of
that
Article 81(1) EC and Article 53(1) EEA is established.
In this respect, Nippon Soda submits that the cartel not
only lacked the ability (and in particular the demon-
strated ability) to exert any meaningful influence on the
European market but was
In
Nippon Soda's view, the Commission's documents show
that those attending the meetings had little or no ability
to control the market in the manner one would expect
of an effective cartel.

singularly ineffective.

(275) The Commission rejects

it

this approach. Firstly,

is
demonstrated (see recitals 276 to 291) that the infringe-
ment had an impact on the EEA methionine market.
Secondly, the fact that the cartel did not achieve all the
results desired by its members in no way proves that
the cartel had no effect on the market. It is clear that
price-fixing and market-sharing cartels by nature jeopar-
dise the proper functioning of the single market. What

The actual
market in the EEA

impact of

the infringement on the methionine

(276) The infringement was committed by undertakings which
during the material period held the lion's share (98) of
the world and European markets for methionine. More-
over, the arrangements were specifically aimed at raising
prices higher than they would otherwise have been and
restricting the quantities sold. Given that these arrange-
ments were implemented, they had a material impact on
the market.

(277) There is no need to quantify in detail

the extent

to
which prices differed from those which might have been
Indeed,
applied in the absence of these arrangements.
this cannot always be measured in a reliable manner,
since a number of external factors may simultaneously
the product, so
have affected trends in the price of
making it extremely difficult
to draw conclusions on
the relative importance of all possible causal effects.

(278) The cartel agreements were, however,

the cartel.

these sales

implemented.
Throughout the duration of the cartel, the parties would
exchange their sales figures and, on the basis of those
figures, as Degussa confirms in its reply to the Commis-
sion's statement of objections, the parties would agree
new target prices (see recitals 88, 128, 130, 139, 150
and 154). The exchange of
figures and
market shares was instrumental in the sustained pressure
put on the prices and so constituted a crucial element
of
In practice, the new target prices were
effectively announced to customers, usually through the
specialised press (see recitals 88, 136, 157 and 167). The
parties would closely monitor the implementation of
their agreements by organising regular multilateral and
bilateral meetings among them. At these meetings, the
parties would exchange
figures, discuss
market prices (thus enabling the parties to monitor
whether the agreed target prices were being met) and,
if necessary, agree to adjust the target prices (see, for
instance, recitals 88, 128, 130, 139, 150 and 154).

their

sales

(which controlled

(279) Whereas during the earlier years of
virtually

the cartel,
the
all methionine
parties
production) were able to focus on increasing methionine
prices (see recitals 98, 103, 106, 112, 128, 136 and
137), this became increasingly difficult when Monsanto
(Novus) entered the market. When prices began falling
significantly under the combined effects of Monsanto's

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arrival on the methionine market and a general fall in
demand (Rhône-Poulenc speaks of 30 % by the summer
and Autumn of 1989), the cartel members nevertheless
managed to reverse this downward trend through their
combined efforts: prices were successfully increased
between July 1990 until 1992 to 1993. Thereafter, their
efforts were focused on maintaining the existing prices
(see for instance recitals 137, 152, 153 and 160).

(280) This is confirmed by a note submitted by Nippon Soda
in relation with a meeting held on 17 May 1993 (99), in
which it is shown that prices in the methionine market
were rising. Degussa managed to sell methionine at a
price of 6,80 DEM/kg to one of its larger customers,
CEBECO. Prior to the meeting of 7 November 1990,
prices had still been at 2,50 USD/kg (4,03 DEM/kg (100)).
As shown in recital 112, the cartel members agreed at
their November 1990 meeting to increase prices from
2,50 USD/kg to 2,80 USD/kg (4,51 DEM/kg (101)).
Nippon Soda quotes higher dollar prices:
the first
increase in January (1991) was supposed to push the
dollar price up to 3,30 to 3,50 USD/kg (equivalent to
5,10 DEM/kg, according to Nippon Soda's own informa-
tion; 5,31-5,64 DEM/kg on the basis of Eurostat
figures (102)) and the second up to 3,60-3,70 USD/kg
(5,80-5,92 DEM/kg (103)).

(281)

In view of the above and the effort invested by each
participant
the cartel,
in the complex organisation of
there is no doubt that the anti-competitive agreement
was implemented throughout the material period of the
infringement. Such continuous implementation over a
period of more than 10 years ought to have had an
impact on the market. That this was indeed the case is
shown in recitals 279 and 280.

(282) Nippon Soda submits that its ability to cause significant
damage to other operators or consumers in any market
jurisdiction is virtually nil
within the Commission's
because it has no sales of
its own in the EEA and
played only a passive role in the cartel. Nippon Soda
sells its methionine to Mitsui in Japan, which then sells
in the EEA, where it has an estimated
the product
In addition, Nippon Soda
market share of only [ ]*.
submits that the cartel
itself was singularly ineffective
(see recitals 274 and 275). According to Nippon Soda,
the evidence in the Commission's file demonstrates that
the participants had only a limited ability to influence
the market. Indeed, Nippon Soda submits that in prac-
tice, the producers had neither the ability nor the will
actually to fix the market price, regardless of the discus-
sions at
its arguments,
Nippon Soda cites the Commission's own evidence for
the 1992 to 1993 period, which shows that prices
routinely fell below the target price of 6,20 DEM/kg.

their meetings.

In support of

(283) Moreover, the members of the alleged cartel appeared to
‘cheat’ to such a degree that the meetings gradually lost
their ‘raison d'être’, degenerating into social occasions
before ceasing altogether. While Nippon Soda agrees
that none of these factors would necessarily exonerate

finding that

it had breached
a company from a
Article 81(1) of the Treaty, each of them is apposite to,
and in Nippon Soda's submission, determinative of, any
finding that the Commission may make regarding the
‘gravity’ of any infringement that Nippon Soda is found
to have committed.

(284)

In its reply to the statement of objections, Degussa
draws the same conclusions, emphasising that the infrin-
gement was confined to setting target prices. According
to Degussa,
there was never any agreement on a
mechanism to implement price increases or to allocate
quotas, volumes or clients. Nor was there a control
mechanism involving a compensation system to monitor
the implementation of the agreement.

(285)

In fact, according to Degussa, the evidence shows that,
the meetings between Rhône-Poulenc,
in spite of
Nippon Soda and Degussa, prices
fell continuously
(5 DEM/kg by the summer of 1994).

(286) Degussa submits that

the cartel was also ineffective
because Novus (with an EEA-wide market share of [ ]*)
did not participate in the agreements. For the same
reason, the participants would never have been able to
allocation
implement price
scheme. Consequently, according to Degussa, the infrin-
gement had only an ‘insignificant’
impact on the EEA
market.

increases or

a volume

(287) None of the arguments used by the parties to minimise
the Commission's finding that the cartel had an actual
effect on the market is conclusive. The explanations for
the failure to achieve the target prices (in particular as
from 1992 to 1993), may have some validity, but they
do not demonstrate in a convincing manner that the
implementation of the cartel agreement could not have
played a role in the setting and fluctuation of prices on
the methionine market.
Indeed, given that the parties
had replaced the uncertain situation of free competition
with continuous collusion, prices were necessarily estab-
lished at a level different
to that which would have
prevailed in a competitive market.

(288) The fact, highlighted by Nippon Soda and Degussa, that,
for all the cartel's efforts, methionine prices diminished
over time, certainly illustrates the difficulties encoun-
tered by the parties in increasing prices in a difficult
market situation. It does not, however, demonstrate that
the illegal practice had no effect on the market, nor
does it demonstrate that prices were not kept above a
competitive level.

(289) On the contrary, when examining the combined efforts
it can
of the cartel members (see recital 278 et seq.),
reasonably be concluded that during the entire period of
the cartel,
the cartel
including after 1992 to 1993,
members managed to maintain prices at a level higher
than they would have been without the illicit arrange-
ments.

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(290) As discussed under recital 275, the fact that the results
sought by the cartel participants were not entirely
achieved in no way proves that the cartel did not affect
the market. Moreover,
inter
alia, the risks involved, that the parties would repeatedly
have agreed to meet in locations across the world to set
target prices over the period of the infringement if they
had perceived the cartel as having little or no impact on
the methionine market.

is inconceivable, given,

it

(295)

(291)

In its reply to the statement of objections, Degussa
submits that the Commission's own evidence supports
its claim that Degussa and Rhône-Poulenc acted comple-
tely autonomously on the market between 1989 and
1990 (see recitals 101 and 102). This argument cannot,
however, be followed. Not only does the Commission
have ample evidence showing that Rhône-Poulenc and
Degussa actually continued to take part in the infringe-
ment between 1989 and 1991 (see recitals 95 to 125),
but the fact that Rhône-Poulenc and Degussa may well
have had ‘hidden agendas’ causing them to disregard to
some extent the commitments made towards the other
cartel participants does not
they did not
implement the cartel agreement. As the Court of First
‘an undertaking
Instance held in the Cascades case,
which, despite colluding with its competitors follows a
more or less independent policy on the market may
simply be trying to exploit
its own
benefit’ (104).

imply that

the cartel

for

The size of the relevant geographic market

(292) The cartel covered the whole of the common market
and, following its creation, the whole of the EEA. Every
part of the common market and the EEA was under the
influence of the collusion. For the purposes of calcu-
lating gravity, the Commission therefore considers the
entirety of the Community and, following its creation,
the EEA to have been affected by the cartel.

Conclusion of the Commission on the gravity of the infringe-
ment

its actual

(293) Taking into account the nature of the behaviour under
impact on the methionine market
scrutiny,
and the fact that it covered the whole of the Common
market and, following its creation, the whole EEA, the
Commission considers that the undertakings concerned
by this Decision have committed a very serious infringe-
ment of Article 81(1) of the EC Treaty and 53(1) of the
EEA Agreement.

Classification of cartel participants

account of the effective economic capacity of the offen-
ders to cause significant damage to competition and to
set the fine at a level which ensures it has sufficient
deterrent effect. This seems particularly necessary where,
as in this case, there is considerable disparity in the size
of the undertakings participating in the infringement.

In the circumstances of this case, which involves several
undertakings, it will be necessary, when setting the basic
amount of
the specific
weight, and therefore the real impact on competition, of
each undertaking's offending conduct.

to take account of

the fines,

(296) For this purpose the undertakings concerned can be
divided into different categories according to their rela-
tive importance in the market concerned, subject
to
adjustment where appropriate to take account of other
factors and especially the need to ensure effective deter-
rence.

(297) As a basis for comparison of the relative importance of
the undertakings in the market concerned, the Commis-
sion considers it appropriate in this case to take their
respective shares of the world market for the product.
Given the global character of the market, these figures
provide the most suitable picture of
the participating
undertakings' capacity to cause significant damage to
other operators in the common market and/or
the
EEA. Moreover, the world market share of any given
its
party to the cartel also gives an indication of
contribution to the effectiveness of the cartel as a whole
or, conversely, of
the instability which would have
affected the cartel had it not participated. The compar-
ison is based on shares of the world market for the
product in the last full calendar year of the infringement
(year 1998).

(298) Rhône-Poulenc and Degussa were among the three
of methionine
relevant
in
In 1998 their estimated shares of

major
geographic market.
the world market were [ ]* and [ ]* respectively.

producers

the

(299) Nippon Soda was a smaller player on the world methio-
In 1998 its estimated market share was
four times smaller than that of Rhône-

nine market.
]*, almost
[
Poulenc, the next smallest player.

(300) As far as the EEA is concerned, Rhône-Poulenc's market
share in 1998 was some [ ]* and Degussa's some [ ]*.
Nippon Soda, however, accounted for only about [ ]* of
the EEA market
for methionine (in its reply to the
Commission's
statement of objections, Nippon Soda
estimates its EEA share at [ ]*).

(294) Within the category of very serious infringements, the
proposed scale of likely fines makes it possible to apply
differential treatment to undertakings in order to take

(301) Rhône-Poulenc and Degussa will therefore constitute a
first category. Nippon Soda will constitute a second
category.

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(302) On the basis of
basic amounts of
follows:

the above, the Commission sets the
the fines determined for gravity as

— Aventis SA/AAN and Degussa: EUR 35 million,

— Nippon Soda: EUR 8 million.

Sufficient deterrence

(303)

In order to ensure that the fine has a sufficient deterrent
effect and takes account of the fact that large under-
takings have legal and economic knowledge and infra-
structures which enable them more easily to recognise
that their conduct constitutes an infringement and be
aware of
the consequences stemming from it under
competition law, the Commission will further determine
whether any further adjustment of the starting amount
is needed for any undertaking.

(304) With respective worldwide turnovers of [ ]* and [ ]* in
2000, Aventis and Degussa are much larger players than
Nippon Soda (worldwide turnover of [ ]* (2000)).
In
this respect, the Commission considers that the appro-
priate starting point
for a fine resulting from the
the relative importance in the market
criterion of
concerned requires further upward adjustment to take
account of the size and overall resources of Aventis and
Degussa respectively.

(305) On the basis of the above, the Commission considers
that the need for deterrence requires that the starting
point for their fine determined under recital 302 should
be increased by 100 % (x2)
to EUR 70 million as
regards Degussa and Aventis SA.

Duration of the infringement

(306) The Commission considers that Aventis, Degussa and
Nippon Soda have infringed Article 81(1) of the Treaty
1999
1986
from February
and
until
Article 53(1) of
from 1 January
the EEA Agreement
1994 until February 1999.

February

that

(307) Although Nippon Soda does not contest the duration of
the infringement itself, it avers that the duration to be
taken into account for the purpose of determining the
fine can not be 13 years. In support of its argument it
submits
the meetings changed in nature and
composition over the years and gradually ‘petered out’;
that the Commission has adduced little or no evidence
the
in respect of certain periods of
Commission has received and acknowledged evidence
that certain activities ceased very early on in the 13-
year period.

time; and that

(308)

In its reply to the statement of objections, Nippon Soda
submits that, although the Fines Notice indicates that an
infringement of ‘long duration’ may merit an increase of
this does not mean that every
10 % per annum,
to such a ‘per year’
infringement should be subject

looking at duration
increase. Secondly, the purpose of
separately is to permit penalties to be imposed for
restrictions ‘which have had a harmful impact on consu-
mers over a long period’. As discussed earlier under
‘Gravity’, Nippon Soda claims that the actual impact on
consumers has not been demonstrated. Thirdly, Nippon
Soda submits that it would be wrong, when considering
fines,
to regard the duration as being the period
between the first and last element of a complex infrin-
gement without assessing what occurred between.

(309) For its part, Aventis does not substantially contest the
duration of the infringement in its reply to the Commis-
sion's statement of objections, although it casts some
doubts on the credibility of Nippon Soda's information
on the starting date of the infringement,
in particular
regarding the meeting of February 1986. As mentioned
earlier, it submits in this context that the fact that it did
not have more detailed information concerning the
contacts in the 1980s should not be construed as an
effort to conceal these contacts, but rather that, as it is
to be expected, the recollections and records were more
complete in the 1990s. The initiation and duration of
the cartel arrangements have been established under
recitals 82 to 86 and 251 to 259. Lastly, Degussa firmly
contests the duration of the infringement, only admit-
ting its participation in the
infringement between
1992 and 1997. The duration of Degussa's participation
in the cartel is discussed under recitals 251 to 259).

(310) The Commission must dismiss Nippon Soda's argu-
ments. Once it has established the existence and the
duration of the infringement of Article 81(1) of the EC
Treaty, the Commission should take into account, when
determining the fine, the entire duration of the infringe-
ment. As the Court of Justice (upholding the judgment
of the Court of First Instance) has pointed out in Case
C-49/92P Commission v Anic Partecipazioni SpA,
a
complex cartel may properly be viewed as a single
continuing infringement for the time frame in which it
existed, even though the agreement may well be varied
from time to time, or
its mechanisms adapted or
strengthened to take account of new developments. The
validity of this assessment is not affected by the possi-
bility that one or more elements of a series of actions
or of a continuous course of conduct could individually
and in themselves constitute a violation of Article 81(1)
of the EC Treaty. The infringement can therefore rightly
be considered as having existed between February 1986
and February 1999.

(311) The Commission therefore

concludes

that Aventis,
Degussa and Nippon Soda have committed the infringe-
ment for 12 years and 10 months. The starting amounts
of the fines determined for gravity (see recitals 302 and
311) are therefore increased by 10 % per year (and 5 %
per six months), i.e. by 125 %.

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Conclusion on the basic amounts

relating to this period is based on the notes that were
made by [ ]* of Degussa.

(312) The Commission accordingly sets the basic amounts of

the fines as follows:

(318)

In the light of the above, the Commission considers that
no specific ringleader can be identified.

— Aventis SA/AAN: EUR 157,5 million,

— Degussa AG: EUR 157,5 million,

3. Attenuating circumstances

— Nippon Soda Company Ltd: EUR 18 million.

Exclusively passive role in the infringement

2. Aggravating circumstances

Role of leader in the infringement

(313) The Commission is in the possession of elements indi-
this Decision

the addressees of

cating that certain of
took initiatives to launch the cartel.

(314) As mentioned in recitals 82 to 84, Rhône-Poulenc and
Degussa first contacted their Japanese counterparts to
set up anti-competitive price
in the
methionine market and to limit Japanese imports into
the EEA. Rhône-Poulenc's recollection of the 1990 meet-
it agreed to ‘bring
ings is that, together with Degussa,
Nippon Soda into the scheme’ (see recital 110).

arrangements

(315) On the other hand, if one considers the totality of the
evidence in this case, as described under the factual part
of this present Decision, the picture is that of a joint-
initiative cartel. All cartel members have been identified
the cartel meetings and
as participating in most of
taking turns organising the meetings concerned. They
all participated actively and directly in the infringement,
exchanging
and
discussing the target prices.

and reviewing

figures

their

sales

(316) Aventis

further

submits

that RPAN has

neither
compelled another company to take part in the cartel
It submits that
nor acted as an instigator or leader.
Nippon Soda played a very active role in the cartel and
that Degussa itself often acted as a leader
in the
cartel (105).

(317) Degussa submits that

it should not be considered to
have played a more active role in the cartel than Rhône-
Poulenc or Nippon Soda. Where it was stated in the
statement of objections that
the 1987 meeting was
chaired by Degussa in Frankfurt, Degussa submits that
its role was limited to providing a meeting room and
introducing the individual participants. When Rhône-
Poulenc states that [ ]* of Degussa organised a meeting
with Nippon Soda in Hong Kong,
it should be under-
stood that she only contacted Nippon Soda after a joint
decision by Degussa and Rhône-Poulenc, which led
eventually to a meeting being organised in Hong Kong.
Finally, the Commission should take into account the
fact that its activities during 1991 and 1994 are high-
information
lighted because of

that most

the fact

in so far as
(319) Nippon Soda states in its reply that,
discussions concerned the EEA,
it always played a
passive role in the infringement. It submits that its small
market share of the world and EEA methionine market
(on which, moreover, it is present only through Mitsui)
the European producers acted as natural
meant
leaders in matters relevant to the European markets. [ ]*.

that

(320) The effective economic capacity of the undertakings to
their
in the

influence
economic size has been taken into account
calculation of the basic fine (see recitals 294 to 302).

the EEA market on the basis of

(321) The Commission has no reason to consider that Nippon
‘follow-my-leader’ role in the
Soda played a passive,
infringement. Nippon Soda participated in the vast
majority of the cartel meetings identified and took part
directly and actively in the infringement. Indeed, Nippon
Soda took part
in the meetings and exchanged sales
information throughout its participation. Nippon Soda
cannot therefore claim to have played a purely ‘passive’
role (106).

(322) Nippon Soda's own background paper of 5 May
1990 (107),
for instance, clearly indicates that in 1989,
‘Nippon Soda and Rhône-Poulenc had tried to persuade
Degussa not to match the low prices then being offered
by Monsanto and Sumitomo’, thus actively intervening
to give direction to the cartel's operations.

(323) The Commission therefore concludes that Nippon Soda
is not entitled to benefit from a reduction in fine on the
basis of an allegedly purely passive role in the cartel.

(324) Finally, the fact that Nippon Soda was a small player in
the methionine market does not relieve it of its own
corporate
In particular, Nippon Soda
could have reported the cartel to the Commission.

responsibility.

Non-implementation in practice of
agreements

the offending

(325) As discussed in recitals 278 to 281 the Commission
considers
the anti-competitive agreements were
carefully implemented. This attenuating circumstance is
not therefore applicable to any of the addressees of this
Decision.

that

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Other attenuating circumstances

(326) As discussed before (see recitals 282 to 287), Nippon
Soda and Degussa have submitted that the Commission
should take the view that the arrangements only had an
‘insignificant’
impact on the EEA market. Both Nippon
Soda and Degussa point out
that despite the cartel
arrangements, prices kept falling below the agreed target
prices. Both Degussa and Nippon Soda have also
submitted that the participants were not always willing
to implement the agreements.

(327) The Commission considers that the infringement had a
material
impact on the EEA market, as has been
discussed under recitals 276 to 291. The Commission
firstly notes that the implementation of agreements on
target prices does not necessarily require that these exact
prices be applied. The regular failure to apply the agreed
price targets does not necessarily constitute an attenu-
ating circumstance. The agreements can be held to be
implemented when the parties fix their prices in order
to move them in the direction of
the target agreed
upon. This was the case for the cartel affecting the
methionine market.

(328) Secondly, although already discussed under recital 291,
the Commission stresses once again that the fact that an
undertaking which has been proved to have participated
in collusion on prices with its competitors did not
behave at all times on the market in the manner agreed
with its competitors is not necessarily a matter which
must be taken into account as an attenuating circum-
stance when determining the amount of the fine to be
imposed. As stated earlier, an undertaking which despite
colluding with its competitors follows a more or less
independent policy on the market may simply be trying
to exploit the cartel for its own benefit (108).

(329) As for Nippon Soda's claim (see recital 282) that its
participation in the cartel arrangements could not have
caused more than an insignificant impact on any market
within the Commission's jurisdiction, given that it does
not itself sell methionine in the EEA, the Commission
points out that the mere fact that Nippon Soda sells in
the EEA through an independent distributor cannot in
itself constitute an attenuating circumstance. As far as
Nippon Soda is concerned, it has not only been demon-
strated that it actively participated in the cartel arrange-
ments during the entire period of
(see
recitals 319 to 324), but also that the infringement had
an actual
(see recitals 276 to
291). As mentioned before, the Commission has duly
that Nippon Soda's
taken into account
economic
cartel
members meant that its effective economic capacity to
influence the EEA market was smaller (see recitals 294
to 302).

in comparison to the other

impact on the market

the cartel

size

fact

the

(330) Degussa also points out that it has taken measures to
In
prevent any future infringement of anti-trust rules.
it has adopted a compliance programme.
this context,
The Commission welcomes the fact that Degussa has set

It nevertheless
up an antitrust law compliance policy.
considers that this initiative came too late and cannot,
as a prevention tool, dispense the Commission from its
duty to penalise an infringement of
the competition
rules committed by Degussa in the past. In the light of
the above, the Commission will not consider the adop-
tion by Degussa of a compliance programme as an
attenuating circumstance justifying a reduction in fine.

(331) The Commission therefore concludes that there are no
attenuating circumstances applicable to the participants
in this infringement affecting the methionine market.

4. Application of the Commission's Leniency Notice

treatment

(332) The addressees of this Decision have cooperated with
the Commission at different stages of the investigation
into the infringement for the purpose of obtaining the
favourable
in the Commission's
set out
Leniency Notice. In order to meet the legitimate expec-
tations of the undertakings concerned as to the non-
the fines on the basis of
imposition or reduction of
their cooperation,
in the
following section whether the parties concerned satisfied
the conditions set out in the Leniency Notice.

the Commission examines

Non-imposition of a fine or a very substantial
reduction of its amount (‘Section B’)

(333) Aventis submits that it meets the conditions set out in
the Commission Leniency Notice in order to obtain a
reduction of at
the fine or even an
exemption from the fine that would otherwise have
been imposed.

least 75 % of

(334) Aventis (AAN) points out that it was the first producer
to take the initiative of informing the Commission of
the existence of the methionine cartel and its involve-
ment in it and that it was the first producer to adduce
decisive evidence without which, according to Aventis,
the cartel might not have been disclosed. Furthermore,
Aventis submits that RPAN had already ended its invol-
vement in the cartel when it informed the Commission
about the existence of the cartel in May 1999.

(335) Aventis further submits that

it has continuously co-
the
operated with the Commission and provided all
information in its possession.
In addition, Aventis
submits that it has neither compelled another company
to take part in the cartel nor acted as an instigator or
leader, contrary to the statements made by Nippon
Soda.

(336) Furthermore, Aventis

(Rhône-Poulenc's

successor) (109)
contests any explicit or tacit suggestion in the statement
of objections that Rhône-Poulenc tried to conceal or
minimise the contacts between the producers in the
1980s. On the contrary, Aventis submits, the beginning
and the end of
the contacts between the methionine
producers would not have been disclosed had it not
been for Rhône-Poulenc, which was the only one to

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three meetings from the month of
describe the last
May 1998 to February 1999. Aventis claims that it was
aware, when denouncing the cartel,
the cartel
would be considered as an infringement of long dura-
tion, i.e. more than five years, and that this factor could
result in a significant increase in the amount of fine.
Finally, according to Aventis,
the Commission should
consider that AAN has not participated in any previous
infringement of the same type.

that

Nippon Soda's evidence of the pre-1990 infringements
does not meet the conditions set out in B or C of the
Leniency Notice,
it would not be giving Nippon Soda
due credit for its contributions made by in respect of
this period. Nippon Soda
the
Commission to utilise its discretion to acknowledge and
reward the value added by Nippon Soda in respect of
the pre-1990 period by granting a reduction greater
than that provided for in the Leniency Notice.

therefore

requests

(337) Aventis also points out that in cartels like the methio-
nine cartel, the Leniency Notice should be most effec-
tively applied: if the Commission does not grant exemp-
tion from a fine to the first party informing it about the
illegal practices in a cartel like the methionine cartel, the
leniency policy of the Commission will not produce the
desired effect of
to denounce a
inciting companies
cartel.

(342) Neither Nippon Soda or Degussa were the first

to
provide the Commission with decisive information on
the methionine cartel, as required under point (b) of
section B of the Leniency Notice. Nor do they meet the
condition set out under point (a) of section B.

Substantial reduction in a fine (‘Section C’)

(338) The Commission accepts

that Aventis was

the first
undertaking to submit decisive evidence on the existence
of an international cartel affecting the EEA in the
methionine industry. That information was provided in
a statement submitted by Rhône-Poulenc on 26 May
1999 after which the Commission carried out an inves-
tigation at the premises of Degussa-Hüls. Aventis there-
fore fulfils the conditions set out in Section B of the
Leniency Notice.

(343) Nippon Soda or Degussa were not the first to provide
information on the
the Commission with decisive
methionine
(a) of
cartel,
section C of the Leniency Notice. Accordingly, neither
of the above undertakings meets the conditions as set
out in section C.

required under point

as

(339) The Commission notes that Rhône-Poulenc was not in a
position to supply any documentary evidence of
the
violation on the grounds that RPAN employees either
did not create or did not keep any relevant documents.
The Commission also notes that the statement was not
comprehensive as to the operation of the cartel during
the 1980s. At first, on the basis of the information at
its disposal, Aventis even considered that these arrange-
ments ‘did not constitute an organised effort to reach
agreements to fix prices or rig the market and that they
had been discontinued in 1987 or 1988’. The Commis-
sion acknowledges however that this could be explained
by an incomplete recollection of events, as submitted by
Aventis/AAN. Lastly, the Commission notes that Aventis
did not substantially contest the facts described in the
Commission's statement of objections. The Commission
will
these elements when
determining the amount of the reduction in fine.

take into account all of

(340) The Commission accordingly grants Aventis a 100 %
reduction of the fine that would otherwise have been
imposed if it had not cooperated with the Commission.

Significant reduction of a fine

(344) With regard to the period after 1990, Nippon Soda
submits that it meets and exceeds all of the conditions
set out in category D of the Leniency Notice. It should
therefore be allowed the maximum level of
leniency
available under category D of the Leniency Notice in
respect of the post 1990 period,
i.e. 50 %. However,
Nippon Soda argues that its cooperation in this case has
enabled the Commission to present a case in respect of
the post-1990 period that is much sounder and well
documented than would otherwise have been possible.
Nippon Soda therefore believes that
the Commission
should use its discretion to grant a higher level of
leniency in relation to this period. Finally, Nippon Soda
also submits that it should be granted a reduction in its
fine for not having contested any of the facts contained
in the statement of objections.

(345) The Commission accepts that Nippon Soda provided
information which contributed materially to establishing
the facts relating to the existence of the cartel arrange-
ments prior to 1990. However, as mentioned above,
Nippon Soda cannot benefit from either categories B
or C of the Leniency Notice because it was not the first
to adduce decisive evidence as required under point (b)
of section B and point (a) of section C (110).

(341) Nippon Soda submits that the information it provided
on the infringement prior to 1990 means that Nippon
Soda should be considered to meet all the terms set out
in categories B or C of the Leniency Notice. Nippon
Soda argues that if the Commission were to find that

(346) The Commission concludes thatNippon Soda fulfils the
in the first and second indent of

conditions set out
section D(2) of the Leniency Notice.

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(347) The information provided by Nippon Soda was detailed
and therefore extensively used by the Commission in the
pursuit of its investigation. Nippon Soda provided valu-
able information on the background, origin and opera-
tion of the cartel. As mentioned above, the Commission
considers that the information provided by Nippon Soda
to 1990 contributed
in relation to the period prior
materially to establishing the existence of
the cartel
arrangements between 1986 and 1990. The Commission
also acknowledges the fact that Nippon Soda has not
in the statement of
set out
contested the facts as
objections. In order to take full account of the value of
the information provided concerning the cartel arrange-
ments prior
to 1990 and other aspects of Nippon
Soda's contribution to the investigation (including not
it a
contesting the facts),
50 % reduction in the fine that would have been
imposed had it not cooperated with the Commission.

the Commission will grant

(352)

(348) For its part, Degussa submits that

it has cooperated
extensively with the Commission during its investiga-
tion, providing valuable information on the operation of
the cartel between 1992 and 1997, thereby significantly
exceeding its legal obligation to reply to the Commis-
sion's request
for information. Degussa claims it has
assisted the Commission in clarifying, classifying and
putting the documents into the right context, enabling
the Commission to demonstrate the functioning of the
cartel between 1992 and 1997. Consequently, Degussa
submits that it qualifies for a significant reduction in
fine.

(349) The Commission notes, however, that the information
provided by Degussa was either found during the inves-
tigation carried out at the premises of Degussa-Hüls of
16 June 1999 or provided by Degussa in reply to the
Commission's request for information of 28 July 1999.

(350)

In this respect, Degussa submits that the Commission,
in its statement of objections, has wrongly refused to
accept the voluntary nature of Degussa's cooperation.
Degussa submits that, according to the case-law of the
Court of First Instance (111), it was not obliged to reply
to the questions that the Commission formulated in its
they ‘clearly went beyond
Article 11 letter because,
purely factual elements’.

Indeed, most of

(351) The Commission cannot accept this argument and reaf-
firms its view that most of Degussa's cooperation can
not be classified as ‘voluntary’.
the
information provided by Degussa
in reply to the
Article 11 request falls entirely within the ambit of an
undertaking's duty under Article 11 of Regulation
the
No 17 to reply fully to such requests. None of
questions in the Commission's Article 11 letter referred
to by Degussa in support of its claim can be considered
as undermining Degussa's rights of defence. As the
Court held in the Orkem case (112), Regulation No 17
does not give an undertaking under investigation any

right to evade the investigation on the grounds that the
results thereof might provide evidence of an infringe-
ment by it of the competition rules. On the contrary, it
imposes on the undertaking an obligation to cooperate
actively, which implies that it must make available to
the Commission all information relating to the subject-
matter of the investigation.

that

In this respect,

In its request for information, the Commission sought
mainly to obtain factual clarification of documents (and
certain unclear quotations made in those documents)
found at Degussa's premises during the investigation
carried out on 16 June 1999 and the production of
documents already in existence. It is settled case-law of
the Courts (113)
the Commission is entitled to
request such factual clarification.
the
Court of First Instance stated (114) that ‘the mere fact of
being obliged to answer purely factual questions put by
the Commission […] cannot constitute a breach of the
principle of respect for the rights of defence or impair
legal process. There is nothing to
the right
prevent
requests
the addressee of such questions or
from showing, whether later during the administrative
procedure or
in proceedings before the Community
courts, when exercising his rights of defence, that the
facts set out in his replies or the documents produced
by him have a different meaning from that ascribed to
them by the Commission.’

to fair

(353) The Commission nevertheless accepts

the

that Degussa
could not have been compelled to provide all
the
information
information it provided and that
provided by Degussa confirmed the vast majority of
the meetings between 1992 and 1997 as well as a
number of the facts in question. Considering the overall
the
cooperation of Degussa with the investigation,
Commission accordingly concludes that Degussa fulfils
the conditions set out in the first indent of section D(2)
the Leniency Notice and grants Degussa a 25 %
of
reduction of
the fine that would have been imposed
had it not cooperated with the Commission.

(354) Degussa however contests the facts of the statement of
objections in so far as they relate to the duration of the
cartel. Degussa claims that ‘the facts, as described in the
statement of objections, are only correct insofar as they
state that Degussa was part of the illegal arrangement
between mid-1992 until 1997 (Copenhagen meeting)’.
The Commission has demonstrated in the factual part of
this Decision that Degussa did in fact participate in the
cartel arrangements for the entire duration of the infrin-
gements. The Commission must therefore conclude that
Degussa does not fulfil the conditions set out in the
second indent of section D(2) of the Leniency Notice.
Consequently, Degussa does not qualify for a reduction
indent of
of
section D(2) of the Commission's Leniency Notice.

fine pursuant

to the

second

the

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Conclusion on the application of
Notice

the Leniency

— Nippon Soda Company Ltd, a fine of EUR 9 000 000.

(355)

In conclusion, with regard to the nature of their co-
operation and in the light of the conditions as set out
in the Leniency Notice, the Commission will grant to
the addressees of this Decision the following reductions
of their respective fines:
— to Aventis SA/AAN: a reduction of 100 %,
— to Degussa AG: a reduction of 25 %,
— to Nippon Soda Company Ltd: a reduction of 50 %.

5. The final amounts of the fines imposed in these

proceedings

(356)

the fines to be imposed, pursuant

to
In conclusion,
Article 15(2)(a) of Regulation No 17, are to be as
follows:
— Aventis SA/AAN: EUR 0,
— Degussa AG: EUR 118 125 000,
— Nippon Soda Company Ltd: EUR 9 000 000,

HAS DECIDED AS FOLLOWS:

Article 1

Aventis SA and Aventis Animal Nutrition SA,
jointly liable,
Degussa AG and Nippon Soda Company Ltd have infringed
Article 81(1) of
the EEA
Agreement by participating,
in the manner and to the extent
set out
in a complex of agreements and
concerted practices in the sector of methionine.

the Treaty and Article 53(1) of

in the reasoning,

The duration of the infringement was as follows:
— from February 1986 until February 1999.

Article 2

The undertakings named in Article 1 shall forthwith bring the
said infringement to an end, if they have not already done so.
They shall henceforward refrain in relation to their activities in
methionine from any agreements or concerted practices that
may have the same or a similar object or effect as the
infringement.

Article 3

The following fines are hereby imposed on the undertakings
names in Article 1 in respect of the infringement found herein:
— Degussa AG, a fine of EUR 118 125 000,

Article 4

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

Account No 642-0029000-95 of the European Commission
with:

Banco Bilbao Vizcaya Argentaria (BBVA) SA
Avenue des Arts/Kunstlaan, 43
B-1040 Brussels

(SWIFT code: BBVABEBB)

(IBAN code: BE76 6420 0290 0095)

that period,

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

Article 5

This Decision is addressed to:

Aventis SA
1, Avenue de l'Europe
F-67300 Strasbourg

Aventis Animal Nutrition SA
42, Avenue Aristide Briand
F-92150 Antony

Degussa AG
Bennigsenplatz 1
D-40474 Düsseldorf

Nippon Soda Company Ltd
Shinotemachi Building
2-2-1 Otemachi / Chiyoda-Ku
Tokyo 100-8165 (Japan)

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

Done at Brussels, 2 July 2002.

For the Commission

Mario MONTI

Member of the Commission

(*) The square brackets marked with an asterisk denote confidential

information which has been deleted from the text.

(1) OJ 13, 21.2.1962, p. 204/62.
(2) OJ L 1, 4.1.2003, p. 1.
(3) OJ L 354, 30.12.1998, p. 18.

(4) OJ C 241, 8.10.2003.
(5) OJ L 395, 30.12.1989, p. 1.
(6) Case IV/M.1378 (OJ C 254, 7.9.1999, p. 5).
(7) [1767].

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Official Journal of the European Union

L 255/31

(8) [1800-1801, 1802-1805, 1806-1809, 1810-1813, 1814-1820].

(52) [125-133].

(9) Sumitomo Article 11 reply, p. 6 et seq.

(10) [1767].

(11) [1614-1615].

(12) [1732].

(13) [1616].

(14) [1767].

(15) The distinction may not have been as apparent to others as it was
to Nippon Soda: Degussa continued to use the term ‘Summit’
throughout. The direction and focus of
the meetings appear
however to have changed with the arrival of Monsanto (whose
methionine business was later to be spun off and incorporated as
Novus) on the European market in 1988 to 1989.

(16) [1802-1805].

(17) [1712-1713, 1719].

(18) [1719-1720].

(19) Nippon Soda submission of 23 February 2000, pages 4 and 5

[1767-1768].

(20) [1800-1801].

(21) [1800-1801].

(53) [59].

(54) [105-115].

(55) [105-115] (page 11).

(56) [80-83].

(57) [97].

(58) [ ]* of Degussa, who participated until 1991.

(59) [294].

(60) [1776].

(61) [1773, 1745-1754].

(62) [1773].

(63) [1724-1725].

(64) [1724].

(65) [1725].

(66) [1775].

(67) [1726].

(22) This is obviously a typing error and 1990 is meant.

(68) See Final Act of the Agreement on the European Economic Area

(23) The note also shows that

the cartel members were essentially
concerned with Monsanto's arrival on the market
(documents
found at Degussa showing details of Monsanto's 1990 sales in
tonnes and its important customers indicate that Monsanto was a
main preoccupation of the cartel, see at pages 49 and 50-51. At
they
various moments throughout
would try to obtain the cooperation of Monsanto.

the duration of

the cartel,

(24) [1712].

(25) [1768].

(26) [1772-1773].

(27) [1773].

(28) [1782-1799].

(29) [558].

(30) [134-137].

(31) [195].

(32) [136].

(33) [567].

(34) [192-193].

(35) [198].

(36) [190-191].

(37) [187].

(38) [173].

(39) [192-193].

(40) [175-180].

(41) [1806-1809].

(42) [1810-1813].

(43) [1814-1820].

(44) [1814-1820] (page 5).

(45) [167-172].

(46) [167-172] (page 4).

(47) At several times in the arrangements,

it was suggested that the
participants should try to persuade Novus to join the arrange-
ments. However, nothing came of this.

(48) [154-158].

(49) [154-158] (last page).

(50) [118-121].

(51) [122].

(OJ L 1, 3.1.1994, p. 3).

(69) Pursuant to Article 56(1)(b) of the EEA Agreement, and without
prejudice to the competence of
the Commission where trade
between Member States is affected, the ESA is also competent on
cases where the turnover of the undertakings concerned in the
territory of the EFTA States equals 33 % or more of their turnover
in the territory of the EEA.

(70) See below under Chapter 5 ‘Effect upon trade between Community

Member States and EEA Contracting Parties’.

(71) Joined Cases T-305/94, etc., Limburgse Vinyl Maatschappij NV and
others v Commission (PVC II) (1999) ECR II-931, at paragraph 715.

(72) The case-law of the Court of Justice and Court of First Instance
the terms
analysed below in relation to the interpretation of
‘agreements’ and ‘concerted practices’
the EC
Treaty expresses principles well established before the signature of
the EEA Agreement. It therefore applies equally to these terms in
so far as they are used in Article 53 of
the EEA Agreement.
References to Article 81 therefore apply also to Article 53.

in Article 81 of

(73) Case 48/69, Imperial Chemical Industries v Commission (1972) ECR

619 at paragraph 64.

(74) Joined Cases 40-48/73, etc., Suiker Unie and others v Commission

(1975) ECR 1663.

(75) See also judgment of the Court of First Instance in Case T-7/89
Hercules v Commission (1991) ECR II-1711, at paragraph 256.

(76) See judgment of the Court of Justice in Case C-199/92 P Hüls v

Commission (1991) ECR I-4287, at paragraphs 158-166.

(77) Judgment of the Court of First Instance in Case T-7/89 Hercules v

Commission, at paragraph 264.

(78) At paragraph 696.

(79) Judgment of the Court of First Instance in Case T-7/89 Hercules v

Commission, at paragraphs 262-263.

(80) Judgment of the Court of Justice in Case C-49/92 Commission v

Anic (1999) ECR I-4125, at paragraph 83.

(81) See judgment of

Instance in T-25/95 et al.
Cimenteries CBR and Others v Commission (2000) ECR II-491,
paragraph 2430.

the Court of First

(82) According to Degussa's reply to the Commission's Article 11 letter,
this meeting was held in Lisbon on 15 to 17 March 1992. In its
reply to the statement of objections, Degussa refers to it as the
‘Barcelona’ meeting of 1992, but it is understood that this should
in fact read as ‘Lissabon’ instead of ‘Barcelona’.

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(83) See for example judgment of the Court of First Instance in Case T-
25/95 Cimenteries SBR v Commission (2000) ECR II-491; judgment
of the Court of First Instance in Case T-21/99 Dansk Rorindustrie
A/S v Commission, paragraphs 41-49 (not yet published); judgment
of the Court of First Instance in Case T-12/89 Solvay & Cie SA v
Commission (1992) ECR II-907, paragraphs 98-99; judgment of the
Court of First Instance in Case T-141/89 Tréfileurope v Commission
(1995) ECR II-791, at paragraphs 85-86.

(84) Judgment of the Court of First Instance in Case T-25/95 Cimenteries
SBR v Commission (2000) ECR II-491, at paragraph 3927. See also
judgment of the Court of First Instance in Cases T-374/94, T-375/
94, T-384/94 and T-388/94 European Night Services v Commission
(1998) ECR II-3196, at paragraph 136, where the Court has stated
this in specific relation to price-fixing agreements.

(85) Judgment of the Court of First Instance in Case T-13/89 Imperial
at
Commission

ECR II-1021,

Industries

(1992)

v

Chemical
paragraph 304.

(86) Judgment of the Court of Justice in Joined Cases 209 to 215 and
218/78 Van Landewyck and others v Commission (1980) ECR 3125,
paragraph 170.

(87) Case 48/69 Imperial Chemical

Industries

(1972) ECR 619,

at

paragraphs 132-133.

(88) Case 107/82 AEG-Telefunken (1983) ECR 3151, paragraph 50.
(89) Case T-65/89 BPB Industries (1993) ECR II-0389, paragraph 149.
in Case C-310/93

the Court

(Appeal rejected by judgment of
(1995) ECR I-0865).

(90) Judgment of the Court in Case C-286/98 Stora Kopparbergs Berg-

(91) Commission decisions

case

slags AB (2000) ECR I-9925, at paragraph 29.
in the Polypropylene

(OJ L 230,
18.8.1986, p. 1, paragraph 96);
in the PVC case (OJ L 74,
17.3.1989, p. 1, paragraph 43); and in the Cartonboard case (OJ
L 243, 19.9.1994, p. 1, paragraph 156). See also Case T-6/89
(1991) ECR II-
Enichem Anic SpA v Commission (Polypropylene)
1623. Judgment upheld by the Court of Justice in case C-49/92 P
Commission v Anic Partecipazioni SpA (1999) ECR I-4125. Also, Case
T-327/94 SCA Holdings Ltd v Commission (1998) ECR II-1373.
Judgment upheld by the Court of Justice in Case C-297/98 P SCA
Holdings Ltd (2000) ECR I-10101.

(92) Case T-352/94 Mo Och Domsjö AB v Commission (1998) ECR II-

1989, at paragraph 87.

(93) See also judgment of Court of Justice in Stora Kopparbergs Bergslags
AB v Commission (2000) ECR I-9925, at paragraphs 37 and 38.
(94) In its reply to the statement of objections, Aventis refers to its
letter of 17 January 2002 addressed to the Commission where it
states the reasons why it considers that AAN should be the
addressee of the Decision rather than Aventis SA.

(95) Under Article 5 of Council Regulation (EC) No 2894/94 of
implementing
28 November 1994 concerning arrangements of
the Agreement on the European Economic Area ‘the Community
rules giving effect to the principles set out in Articles 85 and 86
(now Articles 81 and 82) of the EC Treaty […] shall apply mutatis
mutandis’ (OJ L 305, 30.11.1994, p. 6).

(96) OJ C 207, 18.7.1996, p. 4.
(97) See recital 61.
(98) The cartel members covered virtually all the market during the
earlier years of the cartel. After Monsanto's (Novus since 1991)
entry into the market, the cartel members gradually lost market
shares. However, towards the end of the infringement, the partici-
pants would still hold over 60 % of the worldwide and European
market for methionine.

(99) [1806-1809].
(100) 1 USD = 1,61147 DEM in 1990 (Eurostat official exchange rate).
(101) 1 USD = 1,61147 DEM in 1990 (Eurostat official exchange rate).
(102) 1 USD = 1,61147 DEM in 1990 (Eurostat official exchange rate).
(103) 1 USD = 1,61147 DEM in 1990 (Eurostat official exchange rate).
(104) Case T-308/94 (1998) ECR II-925, paragraph 230.
(105) Aventis' reply to the Commission's statement of objections, p. 14.
(106) See, for instance, recital 365 of the Commission Decision in Case
COMP/36.545/F3 Amino Acids (OJ L 152, 7.6.2001, p. 24).

(107) See recital 98 and following.
(108) Case T-308/94 Cascades SA v Commission (1998) ECR II-925, at

paragraph 230.

(109) As discussed earlier, see under ‘ Addressees’.
(110) Nippon Soda also does not meet

the condition set out under

point (a) of Section B.

(111) Judgment of the Court of First Instance of 20 February 2001 in
Case T-112/98 Mannesmann Röhren-Werke AG v Commission and
judgment of
Justice in Case 374/87 Orkem v
Commission (1989) ECR 3283, at paragraph 35.

the Court of

(112) Judgment of

the Court of

Justice in Case 374/87 Orkem v

Commission (1989) ECR 3283, at paragraph 27.

(113) Judgment of the Court of First Instance of 20 February 2001 in
Case T-112/98 Mannesmann Röhren-Werke AG v Commission,
paragraphs 70, 77-78;
judgment of the Court of Justice in Case
374/87 Orkem v Commission (1989) ECR 3283, paragraphs 37-38,
40. See also judgment of the Court of Justice in Case C-227/92 P
Hoechst AG v Commission (1989) ECR 2859 and the opinion of
Advocate General Mischo delivered on 20 September 2001 in
Case C-94/2000 Roquette Frères SA v Commission concerning the
powers given to the Commission by Article 14 of Regulation 17
to enable it to carry out its duty under the EC Treaty to bring to
light any infringement of Articles 81 or 82 of the EC Treaty.

(114) Ibid., paragraph 78.