2005/590/: Commission Decision of 30 October 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/E-2/37.784 — Fine art auction houses) (Notified under document number C(2002) 4283 final and corrigenda C(2002) 4283/7 and C(2002) 4283/8)   (Text with EEA relevance)
Date: 2002-10-30
Institutions: European Commission
Subjects: auction sale, cartel, fine, infringement procedure (EU), unlawful agreement, work of art

L 200/92

EN

Official Journal of the European Union

30.7.2005

COMMISSION

COMMISSION DECISION

of 30 October 2002

relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA
Agreement
(Case COMP/E-2/37.784 — Fine art auction houses)

(Notified under document number C(2002) 4283 final and corrigenda C(2002) 4283/7 and C(2002) 4283/8)

(Only the English text is authentic)

(Text with EEA relevance)

(2005/590/EC)

the EC Treaty and Article 53 of

On 30 October 2002, the Commission adopted a Decision (C(2002) 4283 final) relating to a
proceeding under Article 81 of
the EEA Agreement. On 6
November 2002, the Commission approved by written procedure C(2002) 4283/7, a corrigendum
to the C(2002) 4283/5 version of Decision C(2002) 4283 final, and C(2002) 4283/8, a corri-
gendum to the C(2002) 4283/6 version of Decision C(2002) 4283 final. In accordance with the
provisions of Article 21 of Regulation 17 (1), the Commission herewith publishes the names of the
parties and the main content of the decision, having regard to the legitimate interest of undertakings in
the protection of their business interests. A non-confidential version of the full text of the decision can be
found in the authentic language of the case and in the Commission’s working languages at DG COMP’s
website at http://europa.eu.int/comm/competition/index_en.html

I. SUMMARY OF THE INFRINGEMENT

1. Addressees

(1)

This Decision is addressed to the following undertakings
and/or associations of undertakings:

for

two main world-wide competitors
the sale on
commission by auction of so-called fine art objects,
furniture, collectibles and memorabilia (here-
antiques,
inafter also generically referred to as: fine arts), entered
into and participated in a continuing agreement and/or
concerted practice contrary to Article 81(1) of the Treaty
and Article 53 of the EEA Agreement, relating to prices
and other conditions of sale for auctions.

— Christie’s International plc,

— Sotheby’s Holdings Inc.

(3)

2. Time and nature of the infringement

(2)

From 30 April 1993 and lasting at least until 7 February
2000, Christie’s International plc (hereinafter: Christie’s)
and Sotheby’s Holdings, Inc. (hereinafter: Sotheby’s), the

(1) OJ 13, 21.2.1962, p. 204/62. Regulation as last amended by Regu-

lation (EC) No 1216/1999 (OJ L 148, 15.6.1999, p. 5).

commission),

The companies agreed, amongst others, to adopt identical
commission structures for vendors, to move to a non-
negotiable scale of vendor commission rates (replacing
the previously negotiable
to increase
vendor commission charges and refrain from granting
special conditions to sellers. They also fixed certain
other
thereby
preventing or restricting competition between them in
the
they
introduced a monitoring mechanism to ensure their
agreement and/or concerted practice was being respected.

and conditions of business,

auction business.

Furthermore

terms

fine

arts

30.7.2005

EN

Official Journal of the European Union

L 200/93

(4)

(5)

(6)

(7)

3. The market for fine arts auction services

(9)

Fine art objects, antiques,
furniture, collectibles and
memorabilia are commonly put up for sale at auctions.
There is no particular limit as to what sort of items may
be sold at auction, nor is there any particular minimum
the goods must have. Auctions may be
value that
conducted of
collection, or
individual
centred on a particular theme, category of merchandise
or period or type of art.

a particular

The principal fine art auction locations for both houses
are in London and New York, but regular auctions are
held in centres like Geneva, Zurich, Amsterdam, Rome,
Milan, Hong Kong and Melbourne. The major fine art
sales are planned and conducted as glamorous and
exclusive social events frequented by wealthy individuals.

In more detail, the agreement and/or concerted practices
between Christie’s and Sotheby’s contained the following
elements:

(a) Regarding the vendors:

— agreeing to introduce a new ‘sliding scale’ for the

vendor's commission (1),

— agreeing to the terms applicable to the scale,
including making the scale non-negotiable, that
to
is, to allow no exceptions (save as agreed)
the scale,

— agreeing the modalities, as well as the timing of

its introduction,

‘season’. The main sales

Sales are arranged well in advance according to an inter-
traditionally
national
conducted in the spring and autumn;
revenues and
operating income of the auction houses therefore peak
in the second and fourth quarters.

are

The owners of the goods who wish to sell ‘consign’ the
merchandise to the auction house, which provides selling
expertise, arranges the auction, produces a catalogue and
arranges advance publicity. Goods are usually offered for
sale as individual items (so-called lots). Even items that
form part of an entire collection are usually split up for
lots. The auction house sells the
sale into individual
property as the agent of
the consignor, billing the
buyer for the goods purchased and remitting to the
received after deduction of
consignor
percent
commission,
and
commission
is
commonly referred to as the ‘vendor’s commission’ (or
‘seller’s
usually
this
is
calculated on the ‘hammer price’,
the price at which
the merchandise is knocked down to the final bidder.
Persons buying at auctions are also charged a percentage
of the hammer price (known as the ‘buyer’s premium’).

the monies
expenses
charged

The
consignor/seller

commission’);

commission

taxes.

the

to

— agreeing to monitor the adherence to the scale by
exchanging lists of the permitted exceptions in
the
order
agreement
any
deviations,

the implementation of
discuss
and

to monitor

to deter

and

— agreeing not

to give vendors at auction guar-

antees as to the minimum price,

— agreeing on a formula for

the sharing with
vendors of the ‘upside’ benefit where goods are
sold more than the guaranteed price,

— agreeing to make no advances to vendors on

single lots,

— agreeing and/or concerting on the terms and
for particular auction

conditions of advances
sales,

— agreeing the minimum interest rate for loans,

— agreeing to limit the commission paid to trade
the practice of

vendors/dealers and to restrict
providing insurance for trade vendors,

— agreeing on limiting the payment of introductory
commission (to 1 % of the buyer's premium in
cases where there was no vendor's commission).

4. Functioning of the cartel

(8)

From April 1993 onwards Christie's and Sotheby's
entered into a common plan aiming at restricting compe-
tition on a number of competitive parameters. These
were foremost related to the conditions applicable to
sellers, but also included conditions for buyers, as well
as other elements. The different elements of the plan
were modified and enhanced in high-level management
meetings during the years that followed, and lasted until
February 2000.

(b) Regarding the buyers:

— agreeing to limit credit terms to trade buyers to

90 days.

(1) A sliding scale means that the percentage that is charged to sellers as
In
a commission on the sale is changed at certain thresholds.
practice,
the
the higher the price obtained for a consignment,
lower the percentage that a seller has to pay.

L 200/94

EN

Official Journal of the European Union

30.7.2005

(10)

(11)

(12)

(13)

(c) Other elements:

— agreeing to limit their marketing efforts (avoiding
share or
in the art market or in a

regarding market

claims/statements
claiming ‘leadership’
particular segment).

as

required,

the parties

Furthermore, in order to implement and/or modify the
agreements
concerted and
exchanged information during regular meetings or
(telephone) contacts on any subject or matter (auctions,
vendors, dealers, buyers) which might give rise to or
competition between them or otherwise
encourage
conflict with or
to
compete.

their agreement not

endanger

auctions and applied to their sales in the EEA and
elsewhere. The common plan to increase revenues was
implemented by both companies. Given the high market
shares of the companies involved and the fact that the
agreement covered all sales in the EEA by the companies,
it had an actual impact on the EEA market.

The size of the relevant geographic market

(15)

For the purposes of calculating gravity, the Commission
therefore considers the entirety of the Community and,
following its creation, the EEA to have been affected by
the cartel.

II. FINES

1. Basic amount of the fine

(16)

The Commission thus sets the starting amount of the
fine for both undertakings at EUR 25.2 million.

Gravity of the infringement

its actual

Taking into account the nature of the behaviour under
impact on the fine arts auction
scrutiny,
market, 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 infringement of Article 81(1) of the EC Treaty
and 53(1) of the EEA Agreement.

(17)

Nature of the infringement

Duration of the infringement

The Commission considers that the duration to be taken
into account is from 30 April 1993 until 7 February
2000. The duration of
therefore
comprises a period of six years and nine months. As a
result, the infringement can be classified as one of long
duration,
leading to an increase of the amount estab-
lished for gravity of 65 %.

infringement

the

the

their

cartel

actions,

illegality of

constituted a deliberate

The
infringement of
Articles 81(1) EC and 53(1) EEA. With full knowledge
the participants
of
combined to set up a secret and institutionalised illegal
scheme designed to prevent competition between the
two most important fine arts auction houses. This infrin-
gement consisted mainly of price fixing practices, 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.

cartel

arrangements

involved were

The
conceived,
directed and encouraged at the highest levels in each
participating company. By its very nature it leads to an
competition, which is of
important distortion of
exclusive benefit to the companies participating in the
cartel and is highly detrimental to customers.

The impact of the infringement within the EEA

(14)

The infringement was committed by the two most
fine arts
important undertakings on the market

for

(18) On the basis of the above, the Commission sets the basic

amount of the fine as follows:

— Christie’s: EUR 41,58 million,

— Sotheby’s: EUR 41,58 million.

2. Aggravating or attenuating circumstances

(19)

The Commission does not consider that any separate
aggravating or attenuating circumstances apply in this
case.

3. Application of the 10 % turnover limit

(20) Given that

the amount

thus calculated for Sotheby’s
exceeds 10 % of worldwide turnover in the year prior
to this Decision, the basic amount for Sotheby’s will be
limited to EUR 34,05 million according to Article 15(2)
of Regulation 17.

30.7.2005

EN

Official Journal of the European Union

L 200/95

4. Application of the ‘1996 Leniency Notice’ (1)

(21) Given that the applications for leniency were made in the
year 2000, under the Leniency Notice then applicable, it
is the 1996 Leniency Notice that applies to this case, as
opposed to the revised Leniency Notice adopted in 2002.

information and evidence that materially contributed to
establishing the existence of the infringement. Also, it did
not materially
the
the
Commission bases
admitted the
existence of a number of elements of the infringement
as described by the Commission in this decision.

on which
It

facts
allegations.

contest
its

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

(25)

Sotheby’s therefore meets the condition of section D, first
and second indent, of the Notice.

Conclusion as regards the application of the Leniency Notice

(26)

In conclusion, with regard to the nature of their coop-
eration and in the light of the conditions set out in the
Leniency Notice,
to the
addressees of this Decision the following reductions of
the respective fines:

the Commission will grant

— to Christie’s: 100 %,

— to Sotheby’s: 40 %.

5. Decision

(27)

The following fines are imposed:

— Christie’s International plc: EUR 0 million,

— Sotheby’s Holdings Inc.: EUR 20,4 million.

(28)

listed shall

The undertakings
immediately bring the
in so far as they have not
infringements to an end,
already done so. They shall refrain from repeating any
act or conduct as the infringement found in this case and
from adopting any measure having equivalent object or
effect.

this

information,

the time of disclosure of

(22) Christie’s was the first to inform the Commission of the
existence of the cartel and to adduce decisive evidence,
without which the cartel might not have been disclosed.
At
the
Commission had not undertaken an investigation nor
did it have in its possession sufficient information to
establish the existence of the cartel. Further, Christie’s
had ended its involvement in the cartel, by confirming
to the Commission that no contacts with Sotheby’s were
taking place in relation to the reported conduct and by
issuing its public announcement about the new vendor’s
commission scheme only a few days after submitting the
evidence
it has
continuously cooperated with the Commission and it
has not been determined that
compelled
it has
Sotheby’s
in the cartel or played, as
to take part
compared to the participation of Sotheby’s, a deter-
mining role in the cartel.

to the Commission.

Furthermore,

(23)

The Commission considers that Christie’s therefore does
meet the relevant conditions set out in section B of the
Leniency Note.

Significant reduction in a fine (Section D)

(24)

The Commission notes that Sotheby’s has fully coop-
erated with the Commission in the course of the inves-
tigation. Furthermore, it provided the Commission with

(1) Commission Notice on the non-imposition or the reduction of fines

in cartel cases, OJ C 207, 18.7.1996, p. 4.