2004/206/EC: Commission decision of 17 December 2002 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/C.37.671 — Flood flavour enhancers) (Text with EEA relevance) (notified under document number (2002) 5091)
Date: 2002-12-17
Institutions: European Commission
Subjects: competition law, fixing of prices, food industry, restriction on competition, restrictive trade practice

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 17 December 2002

relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA
Agreement

(Case COMP/C.37.671 — Flood flavour enhancers)

(notified under document number (2002) 5091)

(Only the English text is authentic)

(Text with EEA relevance)

(2004/206/EC)

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Page

3

3

3

3

4

6

7

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8

CONTENTS

PART I — FACTS

A.

B.

Summary of the infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The nucleotide industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

3.

The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C.

Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. Description of events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

3.

4.

Participants and organisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The essential features of the cartel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Initial contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Operation of the cartel agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10

PART II — LEGAL ASSESSMENT

A.

Jurisdiction (application of the Treaty and the EEA Agreement)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

Relationship between the Treaty and the EEA Agreement

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

B.

Application of Article 81 of the Treaty and Article 53 of the EEA Agreement . . . . . . . . . . . . . . . . . . . . .

1.

2.

3.

4.

5.

6.

Article 81(1) of the Treaty and Article 53(1) of the EEA Agreement. . . . . . . . . . . . . . . . . . . . . . . . .

Agreements and concerted practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Single continuous infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restriction of competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect upon trade between Member States and between EEA contracting parties . . . . . . . . . . . . . .

Provisions of competition rules applicable to Austria, Finland, Iceland, Liechtenstein, Norway
and Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C.

Addressees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

Principles applicable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Addressees of the Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

D. Duration of the infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

E.

Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.

2.

Article 3 of Regulation No 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Article 15(2) of Regulation No 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16

16

17

17

17

18

18

19

20

20

20

20

21

22

22

23

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THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(3)

The undertakings participated in the infringement
between November 1988 and June 1998 (5).

Having regard to the Treaty establishing the European Com-
munity,

Having regard to the Agreement on the European Economic
Area,

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,

Having regard to the Commission decision of 10 July 2002 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 the Hearing Officer in this
case (4),

Whereas:

PART I — FACTS

A. SUMMARY OF THE INFRINGEMENT

(1)

This Decision is addressed to the following undertakings:

— Ajinomoto Company Incorporated

— Takeda Chemical Industries Limited

— Daesang Corporation

— Cheil Jedang Corporation

(2)

The infringement consists in the participation of those
producers of nucleotides in a continuing agreement
contrary to Article 81(1) of the Treaty and Article 53(1)
of the EEA Agreement covering the Community and the
EEA, by which they fixed the prices of the product,
implemented price increases, allocated customers and
set up a scheme to monitor and enforce their agreements.

(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 64, 12.3.2004.

B. THE NUCLEOTIDE INDUSTRY

1. THE PRODUCT

(4)

(5)

(6)

Nucleic acid or nucleotide is made from glucose through
a process of fermentation, separation, crystallisation and
filtration.

There are two nucleotides, which are used for food
flavour enhancement, namely disodium 5'-inosinate
(IMP) and disodium 5'-guanylate (GMP). Both nucleotid-
es are also sold in mixtures of these two products, such
as I & G, a 50/50 mixture of the two nucleotides.

IMP was the first nucleotide to be discovered with the
ability to sharpen flavours in some foods. It was later
discovered that GMP had the same properties. Both
products are only used in small quantities. They function
as a food flavour enhancer only in the presence of a
glutamate, whether added, like monosodium glutamate
(MSG), or naturally occurring, like the glutamate con-
tained in tomatoes. Among other applications IMP
and GMP are effective in low-sodium formulations.
Nucleotide flavour enhancers are used by major food
manufacturers to add flavour to foods either on their
own (with naturally occurring glutamate) or, most often,
in combination with MSG.

(7)

As such, they are mainly used to replace beef extracts,
to enhance sweet and meaty flavours, to mask ‘off’
flavours in various food formulations and to overcome
bitterness.

2. THE PRODUCERS

(a) AJINOMOTO COMPANY, INC. (JAPAN)

(8)

Ajinomoto Company, Inc. (Ajinomoto) is the ultimate
parent company of a group of companies manufacturing
chemicals,
including nucleotides and food products.
Backed by capabilities in amino acid technology, the
group of companies is also engaged in the development
and manufacture of pharmaceuticals. Ajinomoto’s oper-
ations encompass manufacturing and marketing bases
in 21 countries.

(9)

Ajinomoto operates nucleotide production plants in
Japan.

(5) See under the heading ‘Duration’ for individualised dates per

undertaking.

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(10)

(11)

Its European affiliates are Ajinomoto Europe Sales
GmbH (Hamburg, Germany), Ajinomoto Eurolysine
(Paris, France), OmniChem (Louvain-la-neuve, Belgium)
and Forum Holdings Ltd (United Kingdom).

In 2001, all companies belonging to the Ajinomoto
group
of
EUR 8 680 million.

total worldwide

turnover

had

a

(b) TAKEDA CHEMICAL INDUSTRIES LIMITED (JAPAN)

(12) Takeda Chemical Industries Ltd (Takeda) is the ultimate
parent company of a group of companies manufacturing
pharmaceuticals, chemicals, bulk vitamins, plant protec-
tion products and food additives such as nucleotides.

(13) The distribution of nucleotides into the EEA markets is
organised through Mitsui & Co.
(Japan). There are
however several local sales subsidiaries in Europe: Mitsui
& Co. Deutschland GmbH (for sales to western Europe
(including Germany,
the Netherlands, Portugal and
Switzerland), northern Europe, eastern Europe and Tur-
key), Mitsui & Co. UK Plc (for sales in the United
Kingdom and Ireland) and Mitsui & Co. France SA (for
sales in France).

(14)

For the financial year running from 1 April 2001 to
31 March 2002, Takeda had a total worldwide turnover
of EUR 9 247 million (6).

(c) DAESANG CORPORATION (SOUTH KOREA)

(15) Daesang Corporation (Daesang) is the ultimate parent
company of a group operating worldwide, the activities
of which include the manufacture of seasonings, animal
feeds and amino acids. It was created in November 1997
through a merger of Daesang Industrial Limited and
Miwon Corporation Limited. Daesang Industrial Limited
was formerly known as Sewon Corporation Limited
and Miwon Foods Corporation Limited (‘Daesang’ or
‘Miwon’).

(16)

Since September 1994, Daesang Europe BV is Daesang
Corporation’s European sales company for nucleotides.
Daesang Europe mainly sells nucleotides to independent
distributors in the EEA.

(17) Daesang’s worldwide
EUR 1 382 million (7).

turnover

in

2001 was

(d) CHEIL JEDANG CORPORATION (SOUTH KOREA)

(18) Cheil Jedang Corporation (Cheil) is the ultimate parent
company of a group of companies established and
operating worldwide. It was established as the South
Korean Samsung Group’s first manufacturing affiliate
Jedang Corporation
back in 1953.
became independent. Cheil
is a diversified company
focusing among other things on pharmaceuticals and
foodstuffs. Cheil entered the nucleotide market in 1977.

In 1993, Cheil

(19) Cheil operates in the EEA through its wholly owned
subsidiary, CJ Europe GmbH, and various independent
distributors.

(20)

In 2001, the companies belonging to the Cheil group
had a total turnover of EUR 1 976 million (8).

3. THE MARKET

(a)

SUPPLY SIDE

1. Production

(21) The main four producers of nucleotides are Ajinomoto,
Takeda, Cheil and Daesang. At the time of the infringe-
ment, other producers were Kyowa Hakko Kogyo Co. Ltd
(Kyowa) (Japan) (9) and Yamasa Corporation (Yamasa)
(Japan) (10).

(22) The total worldwide nucleotide production capacity in
In
the total worldwide nucleotide production

1997 was approximately 10 700 metric tonnes.
1992,
capacity was around 6 660 metric tonnes.

(23) None of

the Japanese or Korean manufacturers of
nucleotides have production facilities in the Community.
Cheil has a production plant in Indonesia and Kyowa
has recently constructed a production plant in the USA.

2. Distribution

(24) The abovementioned Japanese and South Korean pro-
ducers of nucleotides sell the product on the EEA market
through sales subsidiaries and independent distributors
established in different Member States.

(25)

Since September 1994, Daesang sells nucleotides in
Europe through its wholly owned subsidiary Daesang
Europe BV. Daesang Europe BV imports nucleotides
from Asia and sells them mainly to independent distribu-
tors in the EEA.

(6) The following exchange rate was used: EUR 1 = 108,682 JPY

exchange rate).

(Eurostat’s reference database — 2001 exchange rate).

(7) EUR 1 = 1 154,83 won (Eurostat’s reference database 2001

(9) In 1992 Kyowa ceased exporting nucleotides to Europe.
(10) Yamasa Corporation ceased supplying food flavour enhancer to

exchange rate).

Europe in 1994.

(8) EUR 1 = 1,13404 USD (Eurostat’s reference database 2001

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(26) Ajinomoto sells nucleotides in the EEA through its sales
subsidiary Ajinomoto Europe Sales GmbH established
in Hamburg, Germany, as well as through independent
distributors.

(27) Cheil sells nucleotides in the EEA through its wholly
owned subsidiary, CJ Europe GmbH, and through inde-
pendent distributors.

(28) Takeda sells nucleotides on the EEA through an indepen-
dent distributor, which distributes the product to cus-
tomers through its subsidiaries established in Germany,
France and the United Kingdom.

(b) DEMAND SIDE

(29) The demand for nucleotides is directly linked to the food
industry. As mentioned before, nucleotides are mainly
used by major food manufacturers to add flavour to
foods.

(30) Between 1992 and 1999, the nucleotides market grew
rapidly: whereas worldwide consumption in 1992 was
still at approximately 4 465 metric tonnes, it was well
over 9 000 metric tonnes in 1999. Over the same
period, it is estimated that the Community consumption
of nucleotides has risen from approximately 200 metric
tonnes to over 500 metric tonnes in 1999.

(31) According to the Commission’s best estimates, the total
EEA market was worth in the region of EUR 12 million
in 1997. In 2000, the EEA market for nucleotides was
worth around EUR 7,5 million.

(32)

It is estimated that the three main customers in Europe,
[ ]* (*), [ ]* (including [ ]*, which was acquired by [ ]*
during the 1990s) and [ ]* represent between 45 % and
55 % each year of all nucleotides sold in Europe. On an
individual basis, [ ]* purchases approximately 20 % and
[ ]* 15 % of all nucleotides imported into Europe.

(c) MARKET INFORMATION

(33) The nucleotides business is essentially a global one. The
major producers of nucleotides are large, multinational
corporations established in Japan and South Korea.
Although production is essentially based in Asia, sales
are global (essentially to three major geographical areas
— North America, Europe and Asia). The relevant
geographic market for nucleotides should therefore be
described as worldwide.

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

information which has been deleted from the text.

(34) All nucleotides sold in the EEA are imported from

outside the EEA.

(35)

South Korean producers benefited from a Community
preferential custom tariff regime until 30 April 1998 (11).

(36) The strain on which the production of commercial
nucleotides is essentially based (as well as the production
process itself) has been patented. Among other factors
that may influence the customer’s choice of supplier,
parties have mentioned the quality of the product, price,
delivery and technical support.

(37)

From the beginning of 1988 until the end of 1997, the
average monthly nucleotide prices in the EEA remained
fairly stable (approximately between EUR 22 and EUR 27
per kilogram). After this period, nucleotides prices
started to fall considerably (prices estimated approxi-
mately between EUR 12 and EUR 16 in 1999 and
between EUR 8 and EUR 12 in 2000).

(d)

INTER-STATE TRADE

(38) Over the period considered in this Decision, the nucleo-
tides market was characterised by important
flows
between the current Member States as well as between
the Contracting Parties to the EEA Agreement.

(39) All undertakings marketed the product in almost every
Member State, either through sales subsidiaries or
through distributors established in the Community.

(40) Daesang, for instance, sells nucleotides in the whole of
the Community through Daesang Europe BV, established
in the Netherlands. Cheil and Ajinomoto operate in a
similar way. Takeda, on the other hand, markets its
nucleotides through an independent distributor who has
sales subsidiaries in Germany, the United Kingdom and
France. The German outlet is responsible for virtually all
of
the Community territory with the exception of
France, the United Kingdom and Ireland, where other
subsidiaries are established.

(11) 1.1.1989 to 31.12.1989: 0 % (GSP) Council Regulation (EEC)
No 4257/88 of 19 December 1988 applying generalised tariff
preferences for 1989 in respect of certain industrial products
originating in developing countries (OJ L 375, 31.12.1988, p. 1.);
1.1.1990 to 31.12.1990: 0 % (GSP) Council Regulation (EEC)
No 3896/89 of 18 December 1989 applying generalised tariff
preferences for 1990 in respect of certain industrial products
originating in developing countries (OJ L 383, 30.12.1989, p. 1);
1.1.1991 to 31.12.1994: 0 % (GSP) Council Regulation (EEC)
No 3831/90 of 20 December 1990 applying generalised tariff
preferences for 1991 in respect of certain industrial products
originating in developing countries (OJ L 370, 31.12.1990, p. 1);
1.1.1995 to 30.4.1998: 0 % (GSP) Council Regulation (EC)
No 3281/1994 of 19 December 1994 applying a four-year
scheme of generalised tariff preferences (1995 to 1998) in respect
of certain industrial products originating in developing countries
(OJ L 348, 31.12.1994, p. 1).

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(41) Accordingly, a significant part of the nucleotide sales in

the Community represented inter-State trade.

(42) During the period of the infringement and since the
creation of the EEA, there were also sales to nucleotide
users established in the EEA, mainly through the sales
subsidiaries and distributors already established in the
Community.

C. PROCEDURE

(a) COMMISSION PROCEEDINGS

(43) On 9 September 1999, the Japanese company Takeda
filed an application pursuant to the Commission Notice
on the non-imposition or reduction of fines in cartel
cases (12) (the Leniency Notice) by informing the Com-
mission of a cartel existing with regard to nucleotides,
expressing its intention to cooperate fully with the
Commission. On 14 September 1999, Takeda handed a
file to the Commission containing certain documents
relating to the case.

(44) On 1 February 2000, Daesang approached the Com-
mission, confirming the existence of a cartel with regard
to nucleotides and expressing its intention to cooperate
fully with the Commission’s investigation.

(45) On 21 February 2000,

the Commission addressed
requests for information to Ajinomoto, Cheil, Daesang
and Kyowa requiring detailed explanations concerning
contacts with competitors between 1992 and 1999.

(46) On the basis of the information received during 2000, it
became clear that the cartel had operated prior to
1992 and the Commission sent additional requests for
information on 11 June 2001 to Takeda, Ajinomoto,
Daesang and Cheil concerning the period between
1988 and 1992.

received on 17 April 2000, Cheil admitted participating
in meetings between competitors and provided the
Commission with more details and documents relating
to these meetings. Cheil also expressed its intention to
fully cooperate with the investigation. Kyowa submitted
a statement in response to the Commission’s request for
information on 4 May 2000, admitting its participation
in meetings between competitors until the end of 1993,
and equally expressing its intention to cooperate fully
with the investigation. Kyowa also demonstrated that it
had ceased supplying nucleotides used as food flavour
enhancers in Europe since 1992.

(49) On 20 October 2000, Takeda issued to the Commission
a corporate statement relating to certain anti-competitive
activities involving Takeda in the Community, comp-
lementing the documents submitted on 14 September
In its corporate statement, Takeda submitted
1999.
detailed information on the cartel, its structure, basic
rules and the meetings between competitors.

(50) As stated, the Commission issued a second request for
information concerning the period 1988 to 1992 on
11 June 2001. In its response of 20 July 2001, Takeda
provided additional
information with regard to the
operation of the cartel before 1992.

(51) Ajinomoto, on the other hand, submitted in its reply of
30 July 2001 that it was unable to find any references
to meetings with nucleotide competitors during the
period 1988 to 1991. However, it admitted that from
time to time such meetings must have taken place.

(52) Daesang replied on 23 July 2001 and confirmed its
participation in the cartel as from October 1988.

(53) Cheil submitted its reply on 14 August 2001, stating
that it believed that the meetings between 1988 and
1991 did not discuss the European market.

(47)

In its response to the Commission’s first request for
information (dated 3 April 2000 and 21 April 2000),
Daesang admitted participating in meetings with com-
petitors and provided the Commission with certain
documents specifying the purpose, dates and partici-
pants of various meetings. Daesang submitted a sup-
plementary submission on 10 May 2001.

(54) On 24 October 2001 and 20 December 2001, the
Commission addressed a request for information to
Yamasa. In its response of 17 January 2002, Yamasa
demonstrated that it had ceased supplying nucleotides
used as
in Europe since
July 1994.

food flavour enhancers

(48) Ajinomoto responded to the Commission’s request for
information on 3 April 2000 and 5 May 2000 handing
over certain documents relating to the meetings and
expressing its intention to extend its full cooperation in
In its reply to the
the Commission’s proceedings.
information, which was
Commission’s

request

for

(12) OJ C 207, 18.7.1996, p. 4.

(55) On 24 October 2001 and 31 January 2002, representa-
tives of Ajinomoto met with the Commission to discuss
their cooperation and submitted additional memoranda
on 17 December 2001 and 31 January 2002.

(56) On 10 July 2002, the Commission issued a statement of
objections addressed to Ajinomoto, Takeda, Daesang
and Cheil.

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D. DESCRIPTION OF EVENTS

1.

PARTICIPANTS AND ORGANISATION

(57) The meetings were generally held at top level (general
manager and manager level), as is demonstrated by the
evidence in the file concerning the dates, locations and
attendance for most of the cartel meetings (13).

(58) Kyowa Yamasa withdrew from selling outside Japan
respectively in 1992 and 1994, leaving only Ajinomoto,
Takeda, Cheil and Daesang as players on the worldwide
markets (outside Japan). Consequently, and as shown by
the evidence in the Commission’s file, the meetings
would be restricted to Takeda, Ajinomoto, Cheil and
Daesang as from October 1994 (14).

(59) The participants would usually meet in the last half of
August/September, prior to the annual quotations that
were to be sent to the three (initially four) big European
commercial users of nucleotides, [ ]*, [ ]*, [ ]* (and [ ]*,
which was acquired by [ ]* during the 1990s). These
prices would then be used as a benchmark for determin-
ing the prices for sales to other customers (15) and to
allocate these customers between them.

(60) Usually between the following January and March, the
manufacturers would then hold a meeting to review the
results of the annual contract negotiations with the big
three customers and discuss prices generally applicable
on the market (16).

(61) The participants would also hold bilateral meetings
during which they would prepare the multilateral meet-
ings or review the implementation of the agreements,
such as in relation to specific customers.

2. THE ESSENTIAL FEATURES OF THE CARTEL

BASIC PRINCIPLES

(62) The structure, organisation and operation of the cartel
was based upon a shared assessment of the market. As
in
mentioned above,
Europe, the market was largely made up by three large
industrial users of nucleotides: [ ]*, [ ]* (who acquired
[ ]* during the 1990s) and [ ]*. Between them, they
purchased around 45 to 55 % of all nucleotides sold in
Europe each year.

the producers recognised that

(13) See pages 1931 to 1947 and 1961 to 1974 of the Commission’s
file; see also pages 316 to 319, 1995 and 2174 to 2175 of the
Commission’s file.

(14) See pages 2170 to 2171 of the Commission’s file.
(15) Ajinomoto refers to these other customers (other than [ ]*, [ ]*

and [ ]*) as ‘the general market’.

(16) See pages 2170 to 2171 of the Commission’s file.

(63) The purpose of the cartel meetings was to discuss the
general
to share
trends on the nucleotides market,
information on prices and to discuss allocation between
the manufacturers of the annual nucleotides sales con-
tracts concluded with the three large industrial users of
nucleotides in the Community. The meetings included
discussions to the effect
the prices at which
nucleotides were sold to these three companies were to
be used as the benchmark for determining the prices for
sales to other customers (17).

that

(64) As part of

the agreement,

the Japanese producers
would purchase product from the Korean producers in
exchange for which the Korean producers agreed to
limit their sales to certain markets as well as to certain
customers (‘counterpurchasing agreements’).
In fact,
Takeda would be in charge of the counterpurchases
from Cheil, whilst Ajinomoto would have similar
arrangements with Daesang (18).

(65) The basic principles of

the cartel are very clearly
explained in Takeda’s minutes of a meeting held on
25 July 1997 between Takeda and Ajinomoto (19), where
Ajinomoto’s new [...] was introduced. In Takeda’s own
words, it was explained to him that the regular meetings
between competitors aimed at
‘(a) maintaining and
(b) respecting
reforming international market prices,
each other’s markets and (c) allocating large clients in
Europe’.

(a) Price fixing

(66) The cartel members agreed on ‘minimum’ and ‘target’
prices to be implemented. Prices would be set for the
sale of nucleotides to the big three European customers
and these prices would then be used as a benchmark for
determining the sales to other customers. Every year, a
target price for the next year in relation to the big three
customers would also be discussed (20) (see, for instance,
recitals 80, 87, 92, 94, 98, 108, 112, 113, 118 to 120,
124, 127 to 129, 139 to 141).

(67)

Prices were mainly established both in USD and DEM.
In the European market the DEM would be usually used
as the benchmark currency and converted into the
appropriate national currency when quoting and charg-
ing prices to the national customers.

(17) See Takeda’s corporate statement, page 2170 of the Com-

mission’s file.

(18) See pages 303 and 1962 of the Commission’s file.
(19) See pages 2158 to 2161 of the Commission’s file.
(20) See Takeda’s corporate statement, pages 2170 to 2171 of the
Commission’s file; see also Daesang’s statement, page 1933
of the Commission’s file; see also Daesang’s supplementary
submission, page 1963 of the Commission’s file; see also Kyowa’s
statement, pages 870 and 871 of the Commission’s file; see also
Cheil’s statement, page 304 of the Commission’s file; see also
Ajinomoto’s memorandum, page 2, paragraph 3, page 2445 of
the Commission’s file.

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(b) Customer allocation (and market sharing)

IMPLEMENTATION

(68)

[ ]* and [ ]* were historically supplied by Takeda
whereas [ ]* was historically supplied by Ajinomoto (21).
According to Daesang, an agreement existed between
Takeda and Ajinomoto not
to each other’s
respective European customers (22).

to sell

(69)

In order to protect their sales to these major European
nucleotides users, Takeda and Ajinomoto also entered
into agreements with their main competitors whereby
Takeda and Ajinomoto purchased product from their
competitors in exchange for which the respective com-
petitors would limit their sales to the main European
nucleotides users (23). As Cheil puts it (24), ‘The Japanese
companies (Takeda and Ajinomoto) were to buy nucleo-
tides from Cheil and Miwon (Daesang) respectively. In
exchange, the Korean producers were supposed not to
sell to the European “big three” and were to restrict
quantity to Japan’. (see, for instance, recitals 78, 81, 84,
86, 100 to 102, 108, 111, 112, 114, 116, 117, 122,
123).

(70) This compensation scheme, which was a corollary to the
customer allocation scheme, also lead to the allocation of
markets on a worldwide basis, as confirmed by Cheil (25).
In exchange for not selling to certain customers, the
Japanese undertakings purchased product from their
Korean counterparts (26). Given that these customers
were situated in different markets from where the
compensation sales occured, this effectively lead to the
allocation of markets (see, for instance, recitals 81, 82,
85, 94, 95, 100 to 102, 110, 112, 122, 124, 134).

(71) Takeda confirms that an integral part of the cartel
arrangements concerned ‘the allocation between the
manufacturers of the annual nucleotides sales contracts
concluded with the three large commercial users of
nucleotides in the Community: namely [ ]*, [ ]* and [ ]*’.

(72) The holding of regular and frequent meetings between
the addressees of this Decision was a key feature of the
cartel’s organisation. From 1989 to 1998, more than 20
multilateral meetings (including all cartel members) have
been identified. In addition, the parties held regular
bilateral meetings during this period (more than 35 of
such contacts have been identified). These meetings were
for example used to prepare the respective positions of
the undertakings in the multilateral meetings. There were
also occasional contacts by telephone (approximately 10
telephone conversations have been identified).

(73) The timing of the cartel meetings was usually set shortly
prior to the annual contract negotiations with the three
‘big European customers’ in order to agree on the target
prices to be quoted as well as on the allocation of those
contracts (27). The parties also held meetings to review
the implementation of the target prices during the sales
negotiations (28), although the review of past target
prices as well as the discussions on new target prices to
be applied were often combined in one and the same
meeting (see, for instance, recitals 93, 94, 96, 103, 109,
118, 125, 126, 130, 131, 141).

(74) The participants also exchanged their sales prices and
volumes, which were used as a basis in their discussions
to determine the target prices to be fixed (29) (see, for
instance, recitals 80, 96, 98, 103, 115, 133).

3.

INITIAL CONTACTS

(75) Cheil admits that certain meetings took place between
competitors as from July 1988, although it first stated
that the meetings between 1988 and 1991 did not
appear to pertain to the EEA, focusing on the Japanese
and Asian markets instead (30).

(76) A business trip report submitted by Cheil dated 16 to
28 July 1988 and attached as Annex 5 to Cheil’s 2001
statement, mentions that ‘Takeda said they were making
P-meeting (31) for nucleotides to avert severe competition
which would be occurred by Miwon’s [Daesang] entry
and asked us to support and join into the P-meeting’.

(21) See Takeda’s corporate statement, page 2170 of the Com-

mission’s file.

(22) See Daesang’s supplementary submission, page 4, or page 1963

of the Commission’s file.

(27) See Takeda’s corporate statement, pages 2170 and 2171 of the

(23) See Cheil’s statement, page 2, paragraph 2 (page 301 of the
Commission’s file); Kyowa, page 5, paragraph 1 (page 870 of
the Commission’s file); Daesang’s supplementary statement,
pages 1963 and 1964.

(24) Page 5 of Cheil’s statement, page 304 of the Commission’s file.
(25) See Cheil’s statement, page 4, page 303 of the Commission’s file.
(26) See Cheil’s statement, page 5 (page 304 of the Commission’s
file); see also pages 1963 to 1964 of the Commission’s file.

Commission’s file.

(28) See Takeda’s corporate statement, page 2171 of the Com-

mission’s file.

(29) See Takeda’s corporate statement, page 2170 of the Com-

mission’s file.

(30) See pages 1181 to 1182 of the Commission’s file.
(31) Referring to the meetings between producers or price-fixing

meetings.

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(77) Takeda, for its part, situates the initiation of the meetings

between competitors around 1989 (32).

(78) Kyowa, on the other hand, has submitted that the
meetings between Japanese nucleotides producers start-
ed at least in 1986, but ‘[...] there may have been even
earlier meetings’ (33). Kyowa further submits that in its
view, ‘the main players behind the meetings were Takeda
and Ajinomoto. Takeda was in charge of dealing with
Cheil, and Ajinomoto was in charge of dealing with
[Daesang]. Takeda was also the coordinator of the
group.’ (34).

(79) Ajinomoto admits that representatives of Ajinomoto did
from time to time meet with Cheil, Takeda, Kyowa and
Yamasa from 1988 onwards. Whereas it first claimed
that it had not been able to collect any information on
the subject matter of these meetings for the period
1988 to 1991 (35), it subsequently submitted various
internal documents on contacts during that period in its
additional memorandum of 17 December 2001 (36).

(80) An internal memorandum submitted by Ajinomoto
shows that representatives of the Japanese nucleotides
producers (Takeda, Ajinomoto, Kyowa and Yamasa) held
meetings on 8 and 10 November 1988 where, as regards
the European market, they exchanged information on,
and discussed and/or agreed upon the prices that were
offered or to be offered by each company to the three
big end-users in Europe, i.e. [ ]*, [ ]* and [ ]* as well as
the target prices in the general market in Europe other
than the ‘Big three customers’ for the 1989 calendar
year (37).

(81) Daesang submits (38) that it was first contacted by the
Japanese producers shortly after it started to produce
nucleotides in 1987: a meeting was organised between
the Japanese producers (Daesang speaks of the ‘Associ-
ation’ of Japanese producers), and representatives of
Miwon (now Daesang) in Tokyo on 5 October 1988.
The purpose of this meeting was to limit Miwon’s
penetration into the Japanese market and to discuss
possible cooperation with the Korean producers. The
discussions at this meeting led to the conclusion, on
19 December 1988, of a ‘counterpurchasing agreement’
between Ajinomoto and Miwon. Although presented as
a ‘supply contract’, Daesang admits that the verbally
agreed condition for this contract was that Miwon was
not to increase its sales to Japan and not to obstruct the
Japanese producers’ cooperation on world prices (39).

(32) See page 2170 of the Commission’s file.
(33) See page 869 of the Commission’s file.
(34) See page 869 of the Commission’s file.
(35) See page 2030 of the Commission’s file.
(36) See pages 2256 to 2299 of the Commission’s file.
(37) See pages 2264 to 2269 of the Commission’s file.
(38) Supplementary submission, see p. 2, point 1.
(39) See page 1962 of the Commission’s file; see also pages 986 to

989 of the Commission’s file.

(82) This is corroborated by an internal fax of Miwon dated
9 November 1988 where reference is made to the
negotiations for the supply contract with Ajinomoto,
stating that
‘the contract contains a clause on the
prohibition of new sales’. Daesang submits that this
meant that Ajinomoto was only willing to buy product
from Miwon if Miwon did not increase its sales to
Japan (40).

(83)

(84)

In addition, Daesang submits that at
this meeting
on 5 October 1988, Ajinomoto made it clear that
counterpurchases from Miwon would be made by
Ajinomoto whilst counterpurchases from Cheil would
be made by Takeda. Ajinomoto purchased Miwon
products through Takeda’s distributor, which it used as
a cover (41).

In this respect, Daesang indicates that the initiative for
the agreement came from the Japanese producers (42),
thus confirming Kyowa’s statements as mentioned above
(‘the main players behind the meetings were Takeda and
Ajinomoto. [...] Takeda was also the coordinator of the
group.’ (43)). The view that the cartel was lead by the
Japanese producers is also shared by Cheil, stating that
‘the broad commercial background to the events set out
is one of dominant players seeking to protect an effective
duopoly from emerging competition’ (44).

(85) Ajinomoto submits (45) in this respect that its role should
be considered as subordinate to Takeda’s which is said
to have initiated and orchestrated the cartel activities:
‘Faced with the fact that it lacked a well-organised sales
network in the EEA [...] and the entry of additional
competition from Korean companies, it was Takeda that
was keen to protect its leading position vis-à-vis [ ]* and
[
]* through customer allocation and price fixing.
Meetings among the competitors were initiated by [a
Takeda representative]*[...].[a Takeda representative]*
chaired the meetings and made the opening and conclud-
ing speeches. During the meetings, he would lead the
discussion and write grid-charts on a whiteboard. Takeda
would complain vigorously whenever it came to its
attention that other companies had undercut the prede-
termined price to [ ]* and [ ]*.’ (46)

(40) See pages 1962 and 990 to 992 of the Commission’s file.
(41) Daesang’s supplementary statement, p. 3; see also Annexes K

and L attached thereto.

(42) See pages 1961 to 1962 of the Commission’s file.
(43) See page 4 of Kyowa’s statement; page 869 of the Commission’s

file.

(44) See Cheil’s statement, page 2, paragraph 2; page 301 of the

Commission’s file.

(45) See pages 2557 to 2558 in the Commission’s file.
(46) This is contradicted by the facts in the Commission’s file. In an
internal note of Ajinomoto (see Annex 11 to Ajinomoto’s
Memorandum of 30 June 2000 or pages 2496 to 2499 of the
Commission’s file, it is stated that ‘we [Ajinomoto] as leading
manufacturer as well as Takeda, have to take the lead in the price
increase race, and therefore it is most likely to run against a head
wind. However,
it is inevitable that we have to take risks’;
see also Annexes 7 and 8 to Ajinomoto’s memorandum,
pages 2483 to 2488 of the Commission’s file).

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(86) According to Daesang, another counterpurchasing con-
tract was concluded between Takeda and Miwon in early
March 1989. According to Daesang, this contract was
negotiated on behalf of Miwon by Ajinomoto. The
Commission notes that, in its reply to the statement of
objections, Ajinomoto contests that
it negotiated a
contract with Takeda on behalf of Miwon. The con-
ditions of the contract with Takeda were that Miwon
(now Daesang) was not to increase its sales to Japan, that
Miwon was to cooperate with the Japanese producers in
raising the world price for nucleotides and that Miwon
was to cooperate with (i.e. refrain from selling to) the
‘Big three’ customers ([ ]*, [ ]*, [ ]*).

4. OPERATION OF THE CARTEL AGREEMENT

(87) According to a business trip report (47), a meeting among
the manufacturer(s) of nucleotides (in which Cheil
participated) was held between 7 and 23 March 1989.
The same business report
indicates that attendants
agreed to meet again in Kyung Ju, Korea on 7 June 1989
(according to Daesang, this is the meeting where the
target prices for 1989 were agreed upon).

(88) An internal fax from Miwon Japan to Mitra (48) dated
30 May 1989 (49), mentions, in addition to the supply
to Ajinomoto, an upcoming nucleotide
of product
meeting with competitors on 6 and 7 June 1989
in Kyung Ju, Korea, which was to be attended by
representatives of Takeda, Ajinomoto, Miwon as well as
representatives of two other producers.

(89) Daesang states that it believes that the target prices for
1989 were set at this producers’ meeting of 6 and 7 June
1989 (50).

(90) An internal

fax of Ajinomoto dated 9 June 1989
confirms this meeting, stating that ‘at a meeting which
took place the day before yesterday in Korea, Takeda
told the Koreans that a request was received by [...] to
reduce the USD 27,50 cif price to the prevailing market
price’ (51).

(91) An internal fax from Ajinomoto dated 13 July 1989
indicates that Ajinomoto’s European sales office was
requested to research and confirm their information
relating to Takeda’s selling price of nucleotides to [ ]*
and [ ]* and certain information on low selling price and
sales quantities of Takeda and other manufacturers in
West-Germany, France, the United Kingdom, Switzer-
land and Spain in preparation for an upcoming meeting
between four Japanese and two Korean nucleotides
manufacturers in Taiwan on 7 August 1989. No further
information is available on whether or not this meeting
of 7 August 1989 took place.

(47) See Annex 5 of Cheil’s 2001 statement, pages 2616 to 2619 of

the Commission’s file.

(92) On 5 October 1989, representatives from Takeda,
Ajinomoto, Cheil, Miwon and two other producers met
in the ANA hotel in Tokyo in order to discuss prices for
the forthcoming negotiations with the big customers,
including the European market for 1990, and to review
the implementation of the 1989 price-fixing agree-
ment (52).

(93) However, it should be noted that according to Daesang,
the meeting of 5 October 1989 consisted in fact of
several meetings. The discussion on prices for European
customers for 1989 and 1990 were discussed bilaterally
between Takeda and Miwon and Takeda and Cheil
respectively. Miwon was informed by Takeda that ‘Cheil
is basically cooperating, which indicates that Takeda had
previously met with Cheil’ (53). A final meeting was held
at 17.00 the same day, but essentially dealing with issues
relating to the [ ]* market.

(94)

It was concluded that there was a huge gap between the
target price and the actual price of nucleotides. The
target prices (including Europe) for 1990 were discussed
on the basis of the ‘guidelines for pricing in the European
market in 1990’, submitted by Takeda and indicating
three different target prices based on the volume ordered
by a customer (large, middle or small customer). In
addition, Daesang submits that in view of an expected
visit to Korea by a purchaser from [...], Takeda instructed
Miwon to offer [...] a price in accordance with the
guidelines (for a reproduction of these guidelines, see
below).

(A) Europe market — suggested guidelines for 1990

Price (CIF)

Target Customer

Remarks

USD 30/Kg More than 1 000 kg (large) One lot quantity

USD 31/Kg 500 — 1 000 kg (middle)

One lot quantity

USD 32/Kg Less than 500 kg (small)

One lot quantity

Source: Annexes J and L to Daesang’s supplementary sub-

mission (54).

(95) During the meeting on 5 October 1989, Takeda also

stated that ‘Europe is Takeda territory’ (55).

(48) Miwon Trading and Shipping Company, a subsidiary of Miwon.
(49) See pages 1963 to 1965 of the Commission’s file.
(50) See page 1965 of the Commission’s file.
(51) See pages 2259 and 2270 to 2272 of the Commission’s file
(page 3 and exhibit 2 of Ajinomoto’s supplementary statement
of 17 December 2001).

(52) See pages 2174, 1009 to 1015, 1016 to 1024 and 1025 to

1032 of the Commission’s file, respectively.

(53) See page 1965 of the Commission’s file.
(54) See Ajinomoto’s supplementary Submission of 17 December

2001, page 4, or page 2260 of the Commission’s file.

(55) See page 1009 of the Commission’s file.

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(96) Annex M to Daesang’s supplementary submission (56) is
an internal fax from Miwon in follow-up of the meeting
of 5 October 1989 which states that the basic position
of the (Miwon) headquarters is to try to follow the basic
cooperative framework of the Japanese companies. It is
further stated that the ‘Japanese producers have been
selling (in 1989) at a much lower price than the target
price in the European market
is
questionable, whether the above price guideline will be
followed by the Japanese companies during the 1990
contract period’.

[...]. Therefore it

(97) The abovementioned guidelines are confirmed by an
internal fax of Ajinomoto dated 6 October 1989, which
specifies that the guidelines were handed over to the
Korean producers. However, for the purpose of the
Japanese producers, a separate set of guidelines were
also exchanged on ‘guidelines prices’ to be quoted for
1990: USD 28/kg (DEM 52,20/kg) for the big users and
USD 30/kg (DEM) 55,80/kg for the other customers
(general market big accounts) (57).

(98) An internal

fax from Ajinomoto of 19 December
1989 reports on a meeting held between the Japanese
producers regarding nucleotides prices in Europe for
1990 on that same day. According to the fax, Takeda
said that they commenced negotiations with [ ]* and [ ]*
during their two recent European trips, but they did not
agree. Takeda made an offer to [ ]* at USD 27,50/kg but
Takeda wished to make a revised offer price at USD 26/
kg. Takeda’s negotiations with [ ]* were still pending (58).

(99) As stated before, the parties to the cartel would also
occasionally contact each other on a bilateral basis. The
documents contained in Annexes N and O to Daesang’s
supplementary submission are good examples of this.

(100) Annex N to Daesang’s supplementary submission (59)
contains an internal fax from Mitra to Miwon Japan
dated 22 November 1989, which expressly indicated
that Takeda had proposed that, if Miwon would agree to
limit its sales to [...] and [...], Takeda would accept a
lower standard of product from Miwon as part of its
counterpurchasing arrangement.

(101) Annex O to Daesang’s supplementary submission (60)
concerns a telex dated 28 November 1989 from Takeda,
which was only received a few days later by Miwon,
listing the terms of its purchases from Miwon in 1990,

(56) See pages 1033 to 1036 of the Commission’s file.
(57) See page 2260 of the Commission’s file.
(58) See Ajinomoto’s supplementary submission of 17 December

2001, page 4, or page 2260 of the Commission’s file.

(59) See pages 1037 to 1038 of the Commission’s file.
(60) See pages 1039 to 1040 of the Commission’s file.

and also containing the request from Takeda to Miwon
to offer a certain price to [...] and [...] and to subsequently
confirm its compliance with this request.

(102) According to Daesang,

it would no longer agree to
cooperate on pricing to [...] and [...] in 1991 unless
Takeda agreed to buy at least 20 tonnes of nucleotides
from it and it would not cooperate with regard to [...]
unless Takeda would purchase a total of 40 tonnes. Its
fax of 10 November 1990 (61) stated that this matter
was discussed with [ ]* from Takeda when he visited
Mitra on 7 November 1990. It is mentioned that ‘Mitra
fully agrees to cooperate in order to increase the
[worldwide] market price. However,
in the future,
exports to Europe freely with some customers accounts,
so would like to cooperate, in regard to ’91, only with
respect to [...] and [...]. In addition, currently [...] and
other customers are continuously requesting offers and
if possible looking to confirm contracts. If we [continue]
to follow Takeda’s request and offer at a higher price,
then it is certain that we will not be able to have [any]
contracts’. An internal fax dated 19 November 1990 (62)
concerns the same issue. The precise terms of the
counterpurchasing arrangements were also the main
topic discussed at a meeting between Ajinomoto, Take-
da’s distributor and Miwon in Tokyo on 1 May 1991 (63).

(103) According to Kyowa’s statement (64), [ ]* of Takeda
announced Takeda’s prices to [...] and [...] to Kyowa at a
meeting in January 1991, following a telephone call that
he made to his counterpart at Kyowa, reporting that
Takeda wanted to increase these prices up to a particular
level as from October 1991.

(104) Ajinomoto submitted an internal memorandum on
Takeda’s nucleotides negotiation status for 1992, which
was presumably written on 21 November 1991. Accord-
ing to this memorandum, Takeda informed Ajinomoto
regarding the 1992 contract that ‘Takeda was trying to
raise the price by two dollars on USD basis (to
USD 28,50) but
the negotiation was very difficult
because the price increase would be very significant
on a local currency basis due to the exchange rate’.
Furthermore, Takeda complained that [ ]* was receiving
lower offers from Ajinomoto (USD 17,20 instead of
Takeda’s USD 17,70) and requested Ajinomoto to offer
to sell at USD 18 for 1992, which would be higher than
Takeda’s price (65).

(61) See pages 1041 to 1044 of the Commission’s file.
(62) See pages 1045 to 1050 of the Commission’s file.
(63) See pages 1051 to 1054 of the Commission’s file.
(64) See page 871 of the Commission’s file.
(65) See exhibit 7 attached to Ajinomoto’s supplementary submission
of 17 December 2001 or pages 2285 to 2287 of the Com-
mission’s file; see also exhibit 8, or pages 2288 to 2290. The first
price quote (USD 28,50) concerns I & G product (mixture of IMP
and GMP), whereas second price quote (USD 17,20 to 18)
concerns IMP.

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(105) Sometimes, in order to limit the risk of detection, the
meetings between competitors were limited to just a few
undertakings who would then act on behalf of certain
other competitors. For instance, Daesang submits (66)
that a high level two-day meeting was organised on 27
and 28 April 1992 between the presidents of Daesang,
Cheil and Ajinomoto who acted on behalf of the other
Japanese producers as well because, as Ajinomoto stated,
‘it would look suspicious if the Japanese producers all
went to a Korean resort together’.

(106) During this meeting, the cooperation on nucleotides
was discussed. Daesang believes that Ajinomoto also
attended the meeting on behalf of the other Japanese
producers including, among others, Takeda (67).

(107) Daesang submits that representatives of Miwon attended
a meeting in Korea on 30 June 1992 with representatives
from Takeda. No information is given, however, as to
the subject of the meeting (68).

(108) The target prices for 1993 were discussed at a meeting
organised in Tokyo on 20 August 1992. According
to Daesang’s statement, the agenda for the meeting
concerned cooperation in setting the international mar-
ket price for nucleotides, ‘counterpurchasing’ and restric-
tions on sales to the [ ]* market. The final goal, as
expressed by Takeda, was to have one world price,
including the Japanese market and for the Japanese
producers to buy a significant amount of the Korean
producers’ production. The world target price ([...])
presented at the meeting was between USD 30 and
USD 32. After a meeting recess, an agreement was
reached on the world target price. According to Daesang,
‘it was clear that the Japanese companies had discussed
all the issues amongst themselves before the meeting
and had agreed upon a unified presentation’ (69). In
support of its statement, Daesang has provided a copy
of a target price list prepared by Takeda for the purpose
of the meeting of 20 August 1992. The list states that
for Europe, the target prices would be at DEM 48/kg and
DEM 45/kg for the big three customers (70). According
to Cheil, the Japanese producers requested during this
meeting that prices for Europe be offered only in local
currencies (71).

(109) On 28 January 1993, the participants met again in
Tokyo in order to review the implementation efforts to
achieve the target price set on 20 August 1992. During
this meeting, the parties decided whether the target price

(66) See pages 1970 to 1971 of the Commission’s file.
(67) See pages 1061 to 1066 of the Commission’s file.
(68) See pages 1067 to 1068 of the Commission’s file.
(69) See pages 1069 and 1070 to 1071 and 392 to 393 of the

Commission’s file.

set in 1992 should be adjusted and considered ways to
achieve it. Daesang submits that the two Korean pro-
ducers considered it too difficult to raise prices and
asked their Japanese counterparts for permission to sell
below target price. The Japanese producers refused. The
Japanese argued, among other things, that the Koreans
could sell into Europe at a lower price because they
were not subject to any duty due to the Community
preferential custom tariff regime (GSP). Even though the
parties apparently did not reach a consensus as to how
to achieve the target price, everyone reaffirmed the
target price (72).

(110) Furthermore, regional prices were discussed to see if the
companies were adhering to the worldwide target price
agreed to at the meeting of 20 August 1992. Specifically,
prices in the [ ]*, [ ]* and Europe were discussed. There
also was a discussion in general about cooperation with
regard to the European big three customers (73).

(111) Ajinomoto, Takeda, Miwon and Cheil met again in
Fukuoka (Japan) on 2 March 1993. During this meeting
an adjustment was made to the target prices for the
various regions for 1993. Furthermore, discussions were
the counterpurchasing
held to clarify the terms of
agreements, since the cooperation did not always go as
smoothly as the Japanese producers would have liked.
Cheil states that the attempt that was made during this
meeting to set the price in the Community area failed
because the Korean producers wanted to quote a differ-
ent price as they benefited from the GSP. Cheil concludes
that ‘in fact, it was the conduct of the Korean companies
which prevented the arrangements from working more
effectively’ (74).

(112) Daesang’s minutes of that meeting (75) provide, however,
a more detailed version of the events. According to
Daesang, the meeting was initially conducted by Ajino-
moto’s Deputy General Manager, who threatened to
end the counterpurchasing agreements if the Korean
companies continued to fall behind in their cooperation
with regard to the big three customers, maintaining the
agreed world price and restricting their sales to Japan.
Cheil and Daesang agreed that the counterpurchasing
practice had to be maintained and, consequently, they
agreed with the Japanese producers to improve their
cooperation efforts. Daesang states that it agreed to
cooperate with respect to the ‘big three’ customers but
wanted Ajinomoto and Takeda to increase the quantity
they purchased from Daesang.
of nucleotides that
Finally, a discussion was held on how the cooperation
could be implemented, regulated and enforced.

(70) Daesang explains that these figures are related to I & G. A
converting rate for prices for IMP and GMP separately is inserted
on the bottom of the same target price table.

(71) See Cheil’s statement, page 4, No 2.

(72) See pages 1072 to 1073 of the Commission’s file.
(73) See pages 1072 to 1073 of the Commission’s file.
(74) See Cheil’s statement, page 5, No 5.
(75) See pages 395 to 396 of the Commission’s file.

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(113) During the remainder of 1993, Miwon received several
more visits by Takeda and Ajinomoto representatives.
During these visits, the same topics were discussed, i.e.
cooperation on the ‘big three’ customers and the world
market prices (76).

(114) Further meetings were organised in Seoul and Tokyo
and regular contacts by telephone were held between
the parties (i.e. meetings between Takeda and Cheil on 7
and 26 May 1993 and 30 August 1993, meeting
between Ajinomoto, Takeda, Cheil and Miwon on 7 July
1993). Most of these contacts related to the execution
of either the counterpurchasing arrangements (i.e. prices
and quantities), or complaints about non-compliance
with the target prices by one of the (Korean) participants.

(115) Prices to particular customers were also discussed: on
13 September 1993, for example, Takeda phoned Cheil
to inform Cheil of the prices that were to be quoted to
the European big three customers ([ ]*, [ ]* and [ ]*). In
addition, the relationship between IMP, GMP and I & G
prices was discussed (see Cheil’s statement).

It was agreed that

(116) On 25 January 1994, a meeting was organised between
Cheil and Takeda to discuss the continuation of the
counterpurchasing contract.
the
quantity and price would be kept the same as in 1993.
According to Cheil, Takeda complained that Cheil did
not comply with the existing arrangements for Europe,
[ ]* and the [ ]*. For example, Takeda is said to have
complained to Cheil about the fact that [ ]* had asked
Takeda to reduce its price for IMP to USD 16,5/kg after
Cheil had offered a quote at this level to [ ]*.

(117) Cheil submits that the minutes it kept of this meeting
indicate clearly that the incumbent Japanese producers
played the leading role. Following discussions between
Cheil and Takeda concerning the ‘counter procurement’
by the Japanese industry, Takeda is reported to have
stated that a final decision in this respect would be taken
in a meeting between Ajinomoto and Takeda (77).

(118) On 25 August 1994 (78), a meeting took place in Tokyo.
The records of the meeting of Cheil and Miwon show
that at this meeting, the international market prices and
sales prices of nucleotides were discussed. The parties
exchanged their opinions on the new target prices to be
quoted. The Japanese wished to increase the international
prices. According to Cheil’s business report of that
meeting (79), Takeda suggested that the parties raise the
price up to USD 30/kg at a stroke, whereas the others
suggested that they raise the prices by USD 1 to 2/kg
step by step. Cheil submits that the Japanese complained
about the lack of compliance by the Korean companies.

(76) See page 1935 of the Commission’s file.
(77) See page 306 of the Commission’s file.
(78) Daesang submits that the Japanese producers had a premeeting
on 24 August 1994 in preparation of the meeting of 25 August
1994 with the two Korean producers (see page 5 of its statement,
page 1935 of the Commission’s file).

(79) See pages 392 to 393 of the Commission’s file.

(119) Finally, the parties discussed their cooperation on the
European big three customers. In particular, Ajinomoto
asked Cheil and Daesang to refrain from selling to [ ]*.
As a conclusion to the meeting, it was agreed to hold
in the middle of Septem-
another meeting in Seoul
ber 1994 where the main issues would be the following:
‘(a) price raise: setting target price at USD 30/kg;
(b) Cheil and Miwon would define their attitude to big 3
(especially [ ]*)’ (80).

(120) Earlier, on 7 and 8 July 1994,

there had been a
meeting between the Japanese and the Korean producers
concerning the 1995 price offer for Europe. It follows
from Cheil’s minutes of this meeting that the Japanese
producers insisted strongly on raising prices in 1995.
The Korean producers were requested to offer a price
lower than that of the Japanese products by USD 2/kg.
The minutes continue with an internal memo with one
clear message: ‘Please, try to raise the price based on the
shortage of Korean makers and yen appreciation’ (81).

(121) According to Cheil, another meeting was held on
6 October 1994 between Ajinomoto, Takeda and Cheil
at the Hotel Lotte in Seoul where the Korean cooperation
in Europe regarding the ‘big three’ customers was
discussed. Other items on the agenda were the Korean
cooperation on the [ ]* market and an overview of the
[ ]* market (including Cheil’s sales to a [ ]* client, which
already formed the object of disputes between Cheil and
the Japanese producers). Cheil submits that it did not
make any commitments during this meeting, using the
absence of Miwon as an excuse (82).

(122) An internal fax from Ajinomoto dated 17 October 1994
reports on a telephone conversation between Miwon,
Cheil and Ajinomoto showing that Ajinomoto asked
Cheil to make an offer to [ ]* Europe one week earlier
than Ajinomoto’s offer to the same company. Cheil
replied that they would accept if Miwon accepted first.
Regarding the price offer, Cheil said that they would
instruct their people to offer to sell at DEM 49,50/kg
but refused to make an offer at DEM 50/kg. Miwon
demanded that Ajinomoto purchase an additional
amount of product from Miwon as a condition for
accepting Ajinomoto’s request to offer to [ ]* at a high
price.

(123) Takeda and Miwon met in Seoul on 6 February 1995 (83)
to discuss world prices for nucleotides as well as the
counterpurchasing conditions.

(80) See pages 397 to 404 of the Commission’s file.
(81) See Cheil’s statement, page 6 and Annex 5.
(82) See page 307 of the Commission’s file.
(83) See pages 1937 and 405 to 410 in the Commission’s file.

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(124) On 16 and 17 October 1995, a meeting was held in
Takeda’s head office in Tokyo. Ajinomoto, Takeda, Cheil
and Daesang attended. According to Daesang, during
this meeting the nucleotide world markets and the
situation concerning the ‘big three’ were discussed.
Current prices in various countries and regions (includ-
ing Europe) were discussed to see if the target prices
were met or should be adjusted. Ajinomoto gave prices
that other producers should offer to [ ]* and the other
producers agreed. Takeda is said to have done the same
with respect to [ ]* and [ ]* and the others, including
Ajinomoto, agreed (84).

(125) Prior to this meeting, several other meetings took place
between the parties bilaterally and between the four
producers. Daesang submits that between April 1995
and 16 October 1995, it attended approximately three
or four meetings with Ajinomoto at Mitra’s head office
in Seoul and approximately one or two meetings with
Takeda at the same offices. There were approximately
two or three meetings at a conference room in the Lotte
Hotel which all four producers attended. At each of
these meetings,
the parties would review prices in
various regions to see if target prices previously agreed
to were being met or should be maintained, lowered or
raised. Some of the target prices were increased (i.e. the
[ ]* target price was maintained even though it was
converted into a price per pound rather than a price per
kilo). The parties also discussed and agreed to the
concept of raising the market prices in various regions
as a basis for raising the price to the European big three
customers (85).

(126) The participants of the cartel met in Seoul during the
month of December in order to review the 1995
cooperation. According to the report of the meeting (86),
Ajinomoto led the meeting and thanked everyone for
their cooperation during 1995 which resulted in the
effective implementation of nucleotide price increases
and asked everyone to continue their cooperation in
1996 so as to further increase the nucleotide prices. Mr
C.H. Kim of Daesang is said to have said that he would
and the other participants ‘showed their agreement by
nodding or saying words to that effect’.

(127) According to Daesang’s statement (87), the four pro-
ducers (Takeda, Ajinomoto, Daesang and Cheil) met on
7 March 1996 in Seoul in order to fix the 1996 target
price for sales to the ‘big three customers’. Ajinomoto
proposed an international target price of USD 35/kg.
With regard to the European market in general, Takeda
suggested that a new price should be applied in Europe

(84) See page 1075 of the Commission’s file.
(85) See pages 1937 to 1939 and 405 to 423 of the Commission’s

file.

(86) See page 1076 of the Commission’s file.
(87) See page 10 of its statement or page 1940 of the Commission’s
file; see also Annex 12 to its statement, pages 426 to 427 of the
Commission’s file.

by the end of August 1996. Ajinomoto suggested that
this price should be set at DEM 51/kg. Takeda submitted
a copy of its report of that meeting to the Com-
mission (88).

(128) According to this meeting memo, there was a common
understanding between the participants regarding a price
improvement to be realised in 1996. Each company
confirmed that it would not change the current supply
amount and agreed that price improvement would be
the priority. According to the meeting memo,
the
participants discussed the policy of improvement of the
1996 prices, with the 1997 price plan for the big three
(European) customers in mind. It was agreed that the
target price for the three big companies should be
USD 35/kg (about 10 % up) on a USD basis. In order to
achieve this price,
the nucleotide producers would
prepare a price improvement schedule for the general
market prices, which should reach the level of USD 35/
kg by September/October (1996).

(129) On 21 May 1996, Ajinomoto requested and obtained a
meeting with Miwon about the low price sales of Miwon
in Europe. Concerning Europe, Ajinomoto informed
Miwon that it was negotiating the price for the second
half of 1996 with European customers, but that a price
increase in Germany and Spain would be very difficult.
Ajinomoto noted that in Spain the price level was
DEM 44 to 45/kg, but that it should have been DEM 49/
kg based on the price in 1995. A European target price
of DEM 50/kg was agreed as of June 1996, with the
exception of sales to the ‘big three customers’ (89).

(130) The same day, Ajinomoto also met with Cheil in order
to discuss the implementation of
the agreed price
increases. Cheil is said to have stated that such price
increases would not be possible in Europe before
July 1996. Ajinomoto insisted that the agreed prices be
implemented by the end of August 1996 (90).

(131) According to Daesang’s supplementary submission (91),
discussions on the prices to be charged to the big three
customers for 1997 started during a meeting held on
3 July 1996. A new European target price was proposed
by Takeda and the other parties commented on that
proposal during the meeting.

(88) Takeda rightly observed in its reply to the statement of objections
that it had confirmed that although the memo refers to 17 March
1996, rather than 7 March, reference is actually made to the
meeting held on 7 March. (In fact, the memo also states the
conclusions drawn at the meeting, whilst having been drafted on
12 March 1996).

(89) See page 1941 of the Commission’s file.
(90) See Annex 5 attached to Cheil’s statement, pages 2610 to 2612

of the Commission’s file.

(91) See pages 12 and 13 of Daesang’s statement, pages 1942 to

1943 of the Commission’s file.

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(132) Miwon and Takeda met again on 9 July 1996 in
New Jersey, USA and discussed the market price of
nucleotides in the world. Takeda asked Daesang for its
cooperation in pricing (92).

(138) According to a report submitted by Takeda, a meeting
was held in March 1997 between Takeda, Cheil and
Daesang and an agreement was reached on target prices
of USD 30 (98).

(133) Somewhere in the summer of 1996, Ajinomoto, Takeda,
Miwon and Cheil met again in order to discuss the
current situation of nucleotides markets, including Euro-
pe, and exchange information on sales prices (93).

(134) At a meeting on 29 August 1996 in Seoul, Takeda
informed the others (94) of the price that it planned to
offer to [...] for 1997 and asked the others to offer at a
higher price (DEM 54/kg). Takeda also asked the others
to inform it in case [...] requested a price offer from
them. Takeda also suggested different reasons that could
be given to customers to justify a price increase (95).

(135) It should also be noted that bilateral meetings were
also used to influence the outcome of the ‘general’
competitors meetings. For example, Ajinomoto and
Miwon held a meeting on 28 August 1996, one day
before the actual competitors meeting, where Ajinomoto
advocated a price increase for the customer [...] for
1997. According to Daesang, Ajinomoto wanted to
secure the support of Miwon before the actual meeting
between competitors took place (96).

(136) Takeda submits in this respect that following the US
investigations into Ajinomoto’s involvement in a world-
wide cartel on lysine, Ajinomoto avoided attending the
four-party meetings with other nucleotides producers
(as from August 1996) although it continued to partici-
pate in the nucleotides arrangements. Instead, it con-
tinued to hold direct bilateral contacts with Takeda,
usually before or after those meetings. According to
Takeda, Ajinomoto expected Takeda to use the infor-
mation given by Ajinomoto as a basis for the talks with
the Korean producers (97). In reply to the statement of
objections, Ajinomoto submits that these allegations are
incorrect and are not corroborated by evidence. The
exact duration of Ajinomoto’s participation in the
cartel arrangements is discussed in more detail under
‘Duration’.

(137) According to Daesang, it was informed by Takeda that
all parties had reached an agreement on the prices for
the big three customers during a round of golf organised
between representatives of Miwon and Takeda in New
Jersey on 10 September 1996.

(139) The target prices that were set for 1997 appeared to be
difficult to maintain. A meeting was organised in Seoul
between 26 to 28 May 1997. According to Takeda’s
report of this meeting (99), an agreement was reached to
set the current overseas price at USD 25/kg for 1997, ‘a
level
falling short of USD 30 agreed upon in the
March 1997 meeting’. The report continues that ‘pro-
ceeding from the judgment that price improvements are
necessary before the next year’s contracts are negotiated
with the different major European companies scheduled
for autumn, we exchanged views with the two compani-
es (Cheil and Daesang) on the range of price improve-
ment and the timing (schedules)’.

(140) Finally, they agreed on an improvement up to USD 29
to 31/kg for the following year. A price-fixing agreement
was equally reached for [ ]*, one of the European
customers. According to Takeda’s report of that meet-
ing (100), the contract price to [ ]* that was agreed upon
for 1997 stood at DEM 48/kg USD 32/kg. An increase
would be sought of around 6 % (DEM 51/kg), but
Takeda acknowledged that attaining such an increase
would be difficult.

(141) Takeda visited Miwon in Amsterdam on 3 June 1997.
The items discussed at this meeting were the nucleotide
market in Europe, sales by Miwon to [...], [...] and [...]
and the exchange of information on prices in Europe
and possibilities for price improvements. A similar
meeting was held between Takeda and Cheil in Frankfurt
on 9 June 1997 where information was also exchanged
on prices in Europe and the possibility of improving
these prices (101).

(142) Takeda met again with Miwon in New Jersey, USA on
10 July 1997 and 16 September 1997 in order to
discuss the nucleotides market in general (102).

(143) According to Takeda’s corporate statement, Takeda’s [ ]*
met for the first time with his new counterpart at
Ajinomoto on 25 July 1997. At this meeting, which
took place at a restaurant in Tokyo, they discussed how
the nucleotides market had been organised between the
manufacturers in recent years and they exchanged
their companies’ views in relation to price strategy.
Ajinomoto, on the other hand, states that during
this and later meetings, to the best of Ajinomoto’s
knowledge, ‘European target prices or customers were
not discussed’.

(92) See Daesang’s statement, page 1943 of the Commission’s file.
(93) See Daesang’s statement, page 1944 of the Commission’s file.
(94) Cheil, Daesang and Ajinomoto.
(95) See page 1945 of the Commission’s file.
(96) See page 1944 of the Commission’s file.
(97) See pages 2171 to 2172 of the Commission’s file.

(98) See page 2146 of the Commission’s file.
(99) See page 2146 of the Commission’s file.
(100) See page 1946 of the Commission’s file.
(101) See pages 2217 to 2220 of the Commission’s file.
(102) See Daesang’s statement, page 1947 of the Commission’s file.

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(144) The information provided by Takeda with regard to this
meeting, as well as to the meeting held in Septem-
ber 1997, provides a somewhat different picture. Taked-
a’s report of that meeting (103) clearly mentions that,
among other things, Ajinomoto informed Takeda ‘that
Ajinomoto had already suggested a 10 % increase on a
DEM basis (to around DEM 51?) to their distributors for
next year [...]’. Takeda mentioned to Ajinomoto that
‘they understood their increase in DEM pricing with a
[this]
change to dollar pricing in mind, but
depend[s] on how this was passed on the other compani-
es, Takeda, Cheil and Miwon’. Takeda also informed
Ajinomoto that it would decide on pricing towards [ ]*
and [ ]* based upon the European market research
planned for early October (104).

that

(145) About a month later, Takeda met with representatives
of Cheil and Miwon separately in bilateral meetings on
27 to 29 August 1997. According to Takeda, the main
subject of the meetings were the counterpurchasing
agreements, but it is possible that the companies also
mentioned the forthcoming annual contract nego-
tiations with the three big customers at this meeting.
Daesang submits that it also met with Takeda in the
USA on 10 July 1997 and 16 September 1997 and
discussed the nucleotides market in general (105).

(146) In September 1997, Takeda met again with Ajinomoto.
According to Takeda, Ajinomoto communicated that it
sought a 15 % price increase for 1998 and a minimum
of 10 % (106). In a contemporaneous document submit-
ted by Takeda related to this meeting (107), it is stated
that ‘the head office of each company seems to have
decided [upon] the offered price from A[jinomoto],
to [...]* and the
C[heil] and MW (Miwon/Daesang)
offered price from T[akeda] to [...]*, [...]* for contract
negotiations for the next year. We assumed that in
Europe, the products of C[heil] and MW (Miwon) would
get GSP treatment’ (108).

(147) According to Daesang, Miwon held a meeting with
Takeda in Seoul in October 1997 where they had a
general discussion about the declining price for nucleo-
tides in the world market (109).

(148) Cheil submits that it held meetings with Takeda on 24
and 26 March 1998 in Seoul and that on these
occasions (110), the worldwide nucleotide market and
production was discussed. Another meeting between
Cheil and Takeda has been identified on 2 June 1998
and Cheil submits that the items discussed concerned
the price decline for nucleotides and Cheil’s low-priced
sales on the Japanese market.

(149) No other cartel related meetings have been identified.

PART II — LEGAL ASSESSMENT

A.

JURISDICTION (APPLICATION OF THE TREATY AND

THE EEA AGREEMENT)

1. RELATIONSHIP BETWEEN THE TREATY AND THE EEA
AGREEMENT

(150) The arrangements set out above applied to most of the
Member States and to the EEA (Norway and, prior to its
accession to the Community, Austria).

(151) The EEA Agreement, which contains provisions on
competition analogous to the Treaty, came into force on
1 January 1994. This Decision therefore includes the
application as from that date of those rules (primarily
Article 53(1) of the EEA Agreement) to the arrangements
to which objection is taken.

(152) In so far as the arrangements affected competition and
trade between 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 the EFTA
countries or between EFTA countries which were part
of
is
applicable.

the EEA, Article 53 of

the EEA Agreement

(103) See page 2223 of the Commission’s file.
(104) In its reply to the Commission’s statement of objections,
Ajinomoto contests Takeda’s description of these events, as
further discussed in detail under ‘Duration’.

(105) See pages 1947 and 1974 of the Commission’s file.
(106) See page 2176 of the Commission’s file; Ajinomoto contests
this description of events, as further discussed in relation to the
duration of Ajinomoto’s participation in the infringement.

(107) See page 2224 of the Commission’s file.
(108) The translation provided by Ajinomoto in its statement of
29 November 2002 reads as follows: ‘Seems that the head office
of each company has studied and tentatively decided on the
price to be proposed at the negotiation for the next year contract
scheduled for October and November by A, C, MW with [ ]*
and by T with [ ]* and [ ]* groups. On the premise that C’s and
MW’s product will continue to enjoy GSP in Europe next year’.

(153) If an agreement or practice affects only trade between
Member States, the Commission retains competence and
applies Article 81(1) of the Treaty. If an agreement
affects only trade between EFTA/EEA States, then the
EFTA Surveillance Authority (ESA) is alone competent
and applies the EEA competition rules,
in particular
Article 53(1) of the EEA Agreement (111).

(109) See Daesang’s statement, pages 1947 to 1948 of the Com-

mission’s file.

(110) See page 309 of the Commission’s file.
(111) 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
in 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.

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(154) In this case, the Commission is the competent authority
to apply both Article 81(1) of
the Treaty and
Article 53(1) of the EEA Agreement on the basis of
Article 56 of that Agreement, since the cartel had
an appreciable effect on trade between the Member
States (112).

B. APPLICATION OF ARTICLE 81 OF THE TREATY AND
ARTICLE 53 OF THE EEA AGREEMENT

1. ARTICLE 81(1) OF THE TREATY AND ARTICLE 53(1) OF THE
EEA AGREEMENT

(155) Article 81(1) of the Treaty prohibits as incompatible
with the common market all agreements between under-
takings, decisions by associations of undertakings or
concerted practices which may affect trade between
Member States and which have as their object or effect
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 trade conditions, limit or control
production and markets, or share markets or sources of
supply.

(156) Article 53(1) of the EEA Agreement (which is modelled
on Article 81(1) of the Treaty) contains an identical
prohibition of agreements, decisions and concerted
practices but substitutes the conditions of effect on
trade between Member States with ‘between contracting
parties’ (in this context ‘contracting parties’ means the
Community and the individual (then) EFTA States), and
the prevention, restriction or distortion of competition
within the common market with ‘within the territory
covered by ...[the EEA] Agreement’.

2. AGREEMENTS AND CONCERTED PRACTICES

(157) Article 81(1) of the Treaty and Article 53 of the EEA
Agreement prohibit agreements, decisions of associ-
ations and concerted practices.

(158) An agreement can be said to exist when the parties
adhere to a common plan which limits or is likely to limit
their individual commercial conduct by determining 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 contractual sanctions
or enforcement measures are required. The fact of
agreement may be express or implicit in the behaviour
of the parties.

(159) In its judgment in Joined Cases T-305/94 etc. Limburgse
Vinyl Maatschappij NV and others v Commission (PVC
II) (113), the Court of First Instance stated (in para-
graph 715) that ‘it is well established in the case-law that
for there to be an agreement within the meaning of

Article [81(1)] of the Treaty it is sufficient for the
undertakings to have expressed their joint intention to
behave on the market in a certain way’.

(160) An ‘agreement’ for the purpose of Article 81(1) of the
Treaty does not require the same certainty as would be
necessary for the enforcement of a commercial contract
at civil law. Moreover, in the case of a complex cartel of
long 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.

(161) As the Court of Justice (upholding the judgment of the
Court of First Instance) pointed out in Case C-49/92P
Commission v Anic Partecipazioni SpA (114),
in para-
terms of
from the express
graph 81,
Article 81(1) of the Treaty that that agreement may
consist not only in an isolated act but also in a series of
acts or course of conduct.

follows

it

(162) A complex cartel may thus 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. The validity of
this assessment is not affected by the possibility 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 Treaty.

(163) 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 Treaty where there
is a single common and continuing objective.

(164) The mere fact that each participant in a cartel may
play the role which is appropriate to its own specific
circumstances does not exclude its responsibility for the
infringement as a whole, including acts committed by
other participants but which share the same unlawful
purpose and the same anti-competitive effect. An under-
taking which takes part
in the common unlawful
enterprise by actions which contribute to the realisation
of the shared objective is also responsible, for the whole
period of its adherence to the common scheme, for the
acts of the other participants pursuant to the same
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 (Judgment of the Court
of Justice in Commission v Anic, paragraph 83.)

(112) See Chapter 5 ‘Effect upon trade between the Members States

and between EEA contracting parties’.

(113) [1999] ECR II-931.

(114) [1999] ECR I-4125.

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(165) Article 81 of the Treaty (115) draws a distinction between
the concept of ‘concerted practice’ and that of ‘agree-
ments between undertakings’ or of ‘decisions by associ-
ations of undertakings’
in order to bring within the
prohibition of that Article any form of coordination
between undertakings which, without having reached
the stage where an agreement properly so-called has
been concluded, knowingly substitutes practical cooper-
ation between them for the risks of competition. 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 behav-
iour, the conduct may still fall under Article 81(1) of the
Treaty as a ‘concerted practice’ (116).

long duration,

(166) It is not necessary, however, particularly in the case of
a complex infringement of
for the
Commission to characterise it as exclusively one or other
of these forms of illegal behaviour (117). 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 simultaneously the characteristics of each form
of prohibited conduct while, considered in isolation,
some of its manifestations could accurately be described
as one rather than the other. It would however be
is clearly a
artificial analytically to subdivide what
continuing common enterprise having one and the
same overall objective into several different forms of
infringement. A cartel may therefore be an agreement
and a concerted practice at the same time. Article 81 lays
down no specific category for a complex infringement of
the present type (118).

(115) The case-law of the Court of Justice and the Court of First
Instance analysed under this heading in relation to the interpret-
ation of the terms ‘agreements’ and ‘concerted practices’
in
Article 81 of the Treaty expresses principles well established
before the signature of the EEA Agreement. It therefore also
applies to these terms in so far as they are used in Article 53 of
the EEA Agreement. References to Article 81 of the Treaty
therefore also apply to Article 53 of the EEA Agreement.
(116) See judgment of the Court of First Instance in Case T-7/89
Hercules v Commission [1991] ECR II-1711, paragraph 256. See
also Case 48/69, Imperial Chemical Industries v Commission [1972]
ECR 619, paragraph 64 and Joined Cases 40-48/73, etc. Suiker
Unie and others v Commission [1975] ECR 1663.

(117) See also the judgment in PVC II, where it is stated that ‘[i]n the
context of a complex infringement which involves many
producers seeking over a number of years to regulate the market
between them, the Commission cannot be expected to classify
the infringement precisely, for each undertaking and for any
given moment, as in any event both forms of infringement are
covered by Article [81] of the Treaty’.

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

v Commission, paragraph 264.

3.

SINGLE CONTINUOUS INFRINGEMENT

(167) In this case, the manufacturers of nucleotides adhered,
over a long period of time, to a common scheme which
laid down the lines of their action in the market and
restricted their individual commercial conduct. As such,
the arrangements present the characteristics of an agree-
ment in the sense of Article 81(1) of the Treaty, although
some factual elements of the illicit conduct could aptly
be described as a concerted practice were it appropriate
to do so.

(168) From the end of 1988 to June 1998, there is ample
evidence to show the existence of
this single and
continuous collusion in the EEA market for nucleotides
between Takeda (119), Ajinomoto (120), Daesang (121) and
Cheil (122) which together account for virtually the entire
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 restrict competition can therefore be
dated back at least to 1988. This collusion was in pursuit
of a single anti-competitive economic aim: preventing
price competition by agreeing on target prices and price
increases.

(169) Given the common design and common objective
which the producers steadily pursued of eliminating
competition in the nucleotides market, the Commission
considers that the conduct in question constituted a
single continuing infringement of Article 81(1) of the
Treaty in which each participant must bear its responsi-
bility for the duration of its adherence to the common
scheme. These arrangements are described in detail in
the factual part of this Decision. This description is
supported by widespread and clear evidence, systemati-
cally referred to throughout the text.

4. RESTRICTION OF COMPETITION

(170) The complex of agreements in this case had the object
and effect of restricting competition in the Community
and EEA.

(119) With regard to Takeda, from 8 November 1988 until 2 June

1998.

(120) With regard to Ajinomoto,

from 8 November 1988 until

September 1997.

(121) With regard to Daesang,
31 December 1997.

from 19 December 1988 until

(122) With regard to Cheil, from (end of) March 1989 until 2 June

1998.

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(171) Article 81(1) of the Treaty and Article 53(1) of the
EEA Agreement expressly mention as restrictive of
competition agreements which:

‘directly or indirectly fix selling prices or any other
trading conditions; (b) limit or control production,
markets or technical development or, (c) share markets
or sources of supply’.

The list is not exhaustive.

(172) In the complex of agreements and arrangements con-
sidered in this case, the following elements can be
identified as relevant
in order to find a breach of
Article 81(1) of the Treaty and Article 53(1) of the EEA
Agreement:

(175) However, the cartel also had a restrictive effect on
competition. In fact, the cartel arrangements involved
the major worldwide nucleotides producers and were
conceived, directed and encouraged at high levels in
each participating company (124). The target prices, price
rises and customer allocation, which were the primary
objective of
the cartel, were agreed, announced to
customers and implemented throughout the EEA.

(176) In their replies to the statement of objections, Cheil
and Ajinomoto claim that the restrictive impact on
competition was very limited. Ajinomoto further argues
that the Commission’s conclusion is based on inconclus-
ive evidence, having failed to demonstrate sufficiently
the impact of the arrangements on the market. The
restrictive effect of the arrangements in questions is
established in more detail in recitals 224 to 238.

— allocating customers,

— allocating markets,

— agreeing target and minimum prices,

— agreeing concerted price increases,

— exchanging information on sales figures so as to

monitor the implementation of the target prices,

— participating in regular meetings and other contacts
in order to agree the above restrictions and to
implement and/or modify them as required.

(173) These kinds of arrangements have as their object the
restriction of competition within the meaning of
Article 81(1) of the 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 an inflation of the price to their benefit
and above the level which would be determined by
conditions of free competition.

(174) In order to conclude that Article 81(1) of the Treaty and
53(1) of the EEA Agreement apply, there is no need to
consider the actual effects upon competition of an
agreement once it is established that the agreements had
the object of restricting competition (123).

5.

EFFECT UPON TRADE BETWEEN MEMBER STATES AND

BETWEEN EEA CONTRACTING PARTIES

(177) The continuing agreement between the producers had
an appreciable effect upon trade between Member States
and between contracting parties of the EEA.

(178) Article 81(1) of the 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 competition
within the common market. Similarly, Article 53(1) of
the EEA Agreement is directed at agreements which
undermine the realisation of a homogeneous European
Economic Area.

(179) According to the case-law of the Court, ‘in order that an
agreement may affect trade between Member States, it
must be possible to foresee with a sufficient degree of
probability on the basis of a set of objective factors of
law that it may have an influence, direct or indirect,
actual or potential, on the pattern between Member
States’ (125). In any event, Article 81(1) of the Treaty
‘does not require that agreements referred to in that
provision have actually affected trade between Member
States, it does require that it be established that the
agreements are capable of having that effect’ (126).

(123) Judgment of the Court of First Instance, in Joined Cases T-25/
95 etc Cimenteries CBR and others v Commission [2000] ECR II-
491, paragraph 3927. See also judgment in Cases T-374/94,
T-375/94, T-384/94 and T-388/94, European Night Services and
others v Commission [1998] ECR II-3141, paragraph 136, where
the Court has confirmed this in specific relation to price-fixing
agreements.

(124) See above, under ‘Participants’.
(125) Judgment in Joined Cases C-215/96 and C-216/96 Bagnasco v
Banca popolare di Novale and others [1999] ECR I-135, para-
graphs 47 and 48.

(126) Judgment in Case C-306/96 Javico v Yves Saint Laurent [1998]
ECR I-1983, paragraphs 16 and 17; see also Joined Cases T-374/
94 etc European Night Services and others v Commission [1998]
ECR II-3141, paragraph 136.

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(180) As demonstrated in the section ‘inter-State trade’, the
nucleotides market is characterised by an important
volume of trade between the Member States. Although
none of the nucleotide producers had any production
capacity based in the EEA during the relevant period,
nucleotide was marketed in virtually all States of the
EEA territory, either through wholly owned sales subsidi-
aries, or through distributors established in only a few
of the Member States. There was also a considerable
volume of trade between the Community and the EFTA
countries that are members of the EEA. Norway imports
100 % of its requirements, primarily from the Com-
munity, and prior to the accession of Austria, Finland
and Sweden, these countries imported the totality of
their requirements of nucleotides.

(181) The application of Article 81(1) of the Treaty and
Article 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. Nor is it necessary, in order for these
provisions to apply, to show that the individual conduct
of each participant, as opposed to the cartel as a whole,
affected trade between Member States (127).

(182) In this case, the cartel arrangements covered virtually all
trade throughout the world, including the Community
and EEA. The existence of price-fixing and customer
allocation mechanisms must have resulted, or have been
likely to result,
in the automatic diversion of trade
patterns from the course they would otherwise have
followed (128).

6.
AUSTRIA, FINLAND,

PROVISIONS OF COMPETITION RULES APPLICABLE TO
ICELAND, LIECHTENSTEIN, NORWAY
AND SWEDEN

(183) The EEA Agreement entered into force on 1 January
1994. For the period prior to that date during which the
cartel operated, the only provision applicable to these
proceedings is Article 81 of the Treaty; in so far as
the cartel arrangements within that period restricted
competition in Austria, Finland, Iceland, Liechtenstein,
Norway and Sweden (then EFTA Member States) they
were not caught by that provision.

(184) In the period 1 January to 31 December 1994, the
provisions of the EEA Agreement applied to Austria,
Finland, Iceland, Liechtenstein, Norway and Sweden; the
cartel thus constituted a violation of Article 53(1) of the
EEA Agreement as well as of Article 81(1) of the
Treaty, and the Commission is competent to apply both
provisions. The restriction of competition in those six
EFTA States during that one year period falls under
Article 53(1) of the EEA Agreement.

(185) 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 in those markets. The operation of
the cartel in Norway, Iceland and Liechtenstein remained
in violation of Article 53(1) of the EEA Agreement.

(186) In practice, it follows from the above that in so far
Iceland,
as the cartel operated in Austria, Finland,
Liechtenstein, Norway and Sweden,
it constituted a
violation of the EEA and/or Community competition
rules as from 1 January 1994.

C. ADDRESSEES

1.

PRINCIPLES APPLICABLE

(187) In order to identify the addressees of this Decision, it is
necessary to determine the legal entities to which the
responsibility for the infringement should be imputed.

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

(189) When an infringement of Article 81(1) of the Treaty
and/or Article 53(1) of the EEA Agreement 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 when the infringement was committed, so that
it can answer for it.

(190) 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.

(127) See judgment in Case T-13/89 ICI v Commission [1992] ECR II-

1021, paragraph 304.

(128) Judgment

in Joined Cases 209 to 215 and 218/78, Van
Landewyck and others v Commission [1980] ECR 3125, para-
graph 170.

(191) In this procedure no issue arises regarding the appropri-
ate addressee of the Decision and it will be sent to those
legal entities directly involved in the infringement.

2. ADDRESSEES OF THE DECISION

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(192) In the case of Miwon Corporation (129), which changed
legal form in November 1997, this assessment is in
conformity with the Commission’s normal practice and
current case-law (130). Miwon Corporation Limited’s full
merger with Sewon Co. Ltd to form Daesang Corpor-
ation (131) means that responsibility passes to the new
entity. There is an obvious continuity between Miwon
and the new entity into which it has been subsumed.
Miwon ceased to exist in law and its legal personality as
well as all its assets and staff were transferred to Daesang
Corporation.

D. DURATION OF THE INFRINGEMENT

(193) Although certain evidence submitted to the Commission
(see recital 77) indicates that the initial contacts between
the Japanese producers go back as far as 1986, the
Commission will, for the purpose of these proceedings,
limit its assessment under the competition rules and the
application of any fines to the period from 8 November
1988, this being the date of the first known meeting
between the Japanese producers where prices for the
forthcoming negotiations with the big three customers
were discussed and agreed upon (see recital 79). The
starting date of the infringement taken into account with
regard to Takeda and Ajinomoto will
therefore be
8 November 1988.

(194) As far as Daesang is concerned,

it admits having
concluded a counterpurchasing agreement with Ajino-
moto on 19 December 1988, when it was verbally
agreed that the condition for this contract was that
Miwon was not to increase its sales to [ ]* and not to
]* producers’ cooperation on world
obstruct
prices (132). The Commission will
take
19 December 1988 as the starting date of the infringe-
ment with regard to Daesang.

therefore

the [

(195) According to a business trip report (133), the first meeting
of the manufacturer(s) of nucleotide in which Cheil
participated was held between 7 and 23 March 1989.
The same business report
indicates that attendants
agreed to meet again in Kyung Ju, Korea on 7 June 1989
(according to Daesang, this is the meeting where the
target prices for 1989 were agreed upon).

(196) With regard to the same ‘P-meetings’, a third business
trip report dated 3 to 10 October 1989 (134) explains
that the purpose of the meeting was to ‘discuss the way
to prevent the price decline in the global market’ and to
have a ‘preliminary meeting with Takeda to discuss
nucleotides supply to Takeda in 1990’.

(197) Cheil’s participation in the infringement prior to 1991
is also confirmed by the minutes of a meeting held on
5 October 1989 between Ajinomoto, Takeda, Daesang
and Cheil where target prices for 1990 had been
discussed and where the implementation of the 1989
target prices had been reviewed (135).

(198) Cheil confirms that this meeting took place even though
it first claimed that it had found little evidence as to the
content of that meeting (136).

(199) In its reply to the statement of objections, Cheil confirms,
however, that certain meetings between competitors
took place from July 1988 and admits its participation
in the infringement from March 1989, although it adds
that prior to 1992 the main focus was on markets other
than the EEA and that, in any case, Cheil only had minor
activities on the European market between 1989 and
the end of 1991 (137).

(200) On the basis of

the
Commission considers Cheil to have participated in the
infringement from March 1989.

the abovementioned evidence,

(201) It should of course be noted that in so far as the cartel
covered Austria, Finland, Norway and Sweden, this does
not constitute an infringement of the EEA Agreement
before 1 January 1994, when the Agreement came into
effect.

(202) In its reply to the statement of objections, Ajinomoto
argues that it ceased its participation in the cartel after
August 1996. In support thereof, Ajinomoto submits
that it not only stopped attending producers’ meetings
after August, but that it also ceased counterpurchases
from Daesang. Ajinomoto argues that the evidence in
the Commission’s file itself indicates that its withdrawal
from the nucleotides arrangements was complete, genu-
ine and permanent: there is no evidence that Ajinomoto
attended any of
after
August 1996 and contacts with Takeda were limited to
unsuccessful attempts by Takeda to re-involve Ajinomo-
to in the arrangements.

the producers’ meetings

(129) Miwon Corporation Limited participated in the infringement
through its subsidiaries Miwon Japan Inc. and Mitra (Miwon
Trading & Shipping Company) as well as directly (see for
example Annexes T and U of Daesang’s supplementary sub-
mission).

(130) Case C-49/92 P, Commission v Anic Partecipazioni SpA, para-

graph 145.

(131) See above under ‘The producers’.
(132) See pages 1962 and 986 to 989 of the Commission’s file.
(133) See Annex 5 of Cheil’s 2001 statement, page 2617 of the

Commission’s file.

(134) See Annex 5 to Cheil’s 2001 statement, page 2618 of the

Commission’s file.

(135) See Annexes I, J, K, L and M attached to Daesang’s supplementary
submission; see also Daesang’s supplementary submission,
page 6 and Takeda’s corporate statement, page 7.

(136) See Annex 5 to Cheil’s 2001 statement, page 2618 of the

Commission’s file.

(137) See pages 5 and 6, last paragraph of Cheil’s 2001 statement,
and pages 9 and 10 of its response to the Commission’s
statement of objections.

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(203) Takeda, for its part, argues that the Commission should
consider the date of the last known meeting where
target prices were agreed to constitute the end of the
infringement.

(204) Daesang and Cheil do not contest the duration of the

infringement as established in this Decision.

(205) As far as Ajinomoto is concerned, the Commission
agrees that there is not sufficient evidence to demonstrate
that it participated in the agreement on the target prices
for 1997. Nevertheless, the Commission can not accept
Ajinomoto’s claim that it ceased participating in the
infringement after the meeting of August 1996.

(206) As a matter of fact, the contemporaneous evidence
submitted by Takeda concerning the bilateral meetings
it held with Ajinomoto clearly demonstrates that both
undertakings discussed the nucleotides market and pric-
es during these contacts. In the notes relating to the
July 1997 meeting, for instance, Takeda states that it
was told by Ajinomoto that they would travel to Europe
in August and September and suggest a 10 % price
increase to their distributors, for which they expected
the distributors to protest strongly. In the following note
concerning the September meeting, Takeda states for
example that ‘[A]jinomoto’s basic policy is 15 % (mini-
mum 10 %) up. In August at a meeting with Europe
branches, they received strong resistance as expected,
but they decided that they would start at DEM 53 and
would achieve at least DEM 51 (10 % up)’ (138). The
combination of these two notes clearly shows that
Ajinomoto had not only indicated the price increase it
would seek in Europe, but also gave feedback as to how
the discussions had gone and how they would proceed
from there. This clearly goes beyond mere unsuccessful
attempts made by Takeda to re-involve Ajinomoto in
the arrangements (139).

(207) The Commission therefore considers that Ajinomoto
continued to take part in the infringement beyond the
meeting of August 1996 by continuing to meet with
Takeda and discussing nucleotides prices.

(208) Even if Ajinomoto ceased counterpurchases after
August 1996 and did not participate in any multilateral
meeting after August 1996, Ajinomoto continued to
participate in the illegal scheme, actively contributing by

(138) The translation provided by Ajinomoto in its letter of 29 Novem-
ber 2002 reads as follows: ‘A’s head office’s basic policy about
DEM price is 15 % (minimum 10 %) up adjustment. Met with
strong opposition, as expected, at the meeting with European
branches in August, but for the time being will start with
DEM 53 and attempt to achieve minimum DEM 51 (10 % up)’
(139) In its letter of 29 November 2002, Ajinomoto confirms
contesting the facts as established in Takeda’s notes and calls
into question the probative value of the two Takeda notes as
evidence for Takeda’s continued participation in the infringe-
ment.

exchanging price information. Although the form may
have changed from participating in the multilateral
meetings into holding bilateral contacts with Takeda, it
must be concluded that Ajinomoto participated in the
the last known meeting
infringement until at
in which it discussed nucleotides prices, namely the
September 1997 meeting it held with Takeda.

least

(209) With regard to the other parties, given that

they
participated in the agreement on the target prices for
1997, the Commission will consider the infringement
to have lasted until the end of 1997, except where any
illicit contacts between participants have been identified
beyond the end of 1997. In the case of Takeda and
Cheil, the last known meeting between them where
nucleotides prices were discussed is 2 June 1998 (140).
Consequently, the Commission considers that as far as
Takeda and Cheil are concerned, the infringement lasted
until 2 June 1998.

(210) The Commission therefore considers the infringement
to have lasted until September 1997 as far as Ajinomoto
is concerned, until the end of 1997 as far as Daesang is
concerned and until 2 June 1998 as far as Cheil and
Takeda are concerned.

E. REMEDIES

1. ARTICLE 3 OF REGULATION No 17

(211) Where the Commission finds there is an infringement of
Article 81(1) of the Treaty or 53(1) of the EEA Agree-
ment it may require the undertakings concerned to bring
such infringement to an end in accordance with Article 3
of Regulation 17.

(212) In this case, the Commission indicated in its statement
of objections that the participants went to considerable
lengths to conceal their activities and that they had also
given contradictory information regarding the period
during which the infringement took place. In their reply
to the statement of objections, all undertakings submit
that
they terminated their participation before the
Commission initiated its investigation. Ajinomoto sub-
mits that it ended its participation in August 1996.

(213) Notwithstanding these observations, and for the avoid-
ance of doubt, the undertakings which remain active in
the nucleotides market and to which this Decision is
addressed should be required to bring the infringement
to an end,
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 or effect.

if

(214) The prohibition applies to all secret meetings and
multilateral or bilateral contacts between competitors in
restricting competition between them or
view of
enabling them to concert their market behaviour, in
particular their pricing.

(140) See page 309 of the Commission’s file.

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2. ARTICLE 15(2) OF REGULATION No 17

Nature of the infringement

(a) GENERAL CONSIDERATIONS

(215) Pursuant to Article 15(2) of Regulation No 17, the
Commission 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
Treaty and/or Article 53(1) of the EEA Agreement.

(216) 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 17.

(217) The role played by each undertaking party to the
infringement will be assessed on an individual basis. In
particular,
in the fine
the Commission will reflect
imposed any aggravating or attenuating circumstances
and will apply, as appropriate, the Leniency Notice.

(218) In assessing the gravity of the infringement, the Com-
mission 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.

(b) THE AMOUNT OF THE FINE

(219) The cartel constituted a deliberate infringement of
Article 81(1) of the Treaty and Article 53(1) of the
EEA Agreement: with full knowledge of the restrictive
character of
their
illegality, leading producers of nucleotides combined to
set up a secret and continuous system designed to
restrict competition.

their actions and, moreover, of

1. The basic amount

(220) The basic amount of the fine is determined according to

the gravity and duration of the infringement.

Gravity

(222) It

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

(223) The cartel arrangements involved major worldwide
operators and were conceived, directed and encouraged
at high levels in each participating undertaking (141). By
its very nature, the implementation of a cartel agreement
of the type described above leads to an important
distortion of competition, which is of exclusive benefit
to producers participating in the cartel and is detrimental
to customers and, ultimately, to the general public.

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

(225) Ajinomoto argues that in this case, a number of elements
show not only that the infringement had a limited
impact on the market, but also that the infringement
was not as serious as suggested by the Commission.
the European
These elements include the fact
nucleotide sector is of limited size, the fact that the
infringement was not fully implemented, the fact that
nucleotides represent only a very small proportion of
the cost of the end products and that thus any harm to
consumers was limited and the fact that the ability to
play off suppliers against each other limited any harm
to direct customers.

that

(226) The Commission must reject these arguments. It is clear
that price and market-sharing cartels by their very nature
jeopardise the proper functioning of the single market.
It would be erroneous to conclude on the basis of the
small size of the market that this infringement was not
very serious. What matters is that the normal competi-
tive pattern that would have governed the single market
for nucleotides was replaced by a system of collusion
the essential
concerning the price of
component of competition. As demonstrated in the
recitals
actually
implemented and had an actual
impact on the EEA
nucleotides market (142). As such, the infringement of
the EEA
Article 81(1) of
Agreement is considered very serious. The Commission
considers the argument on the limited size of the market
in recitals 241 to 242.

the Treaty and 53(1) of

arrangements were

the product,

below,

the

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

(141) See recitals 57 and following.
(142) The remaining elements adduced by Ajinomoto are also dealt

with under the heading ‘impact on the market’.

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The actual
market in the EEA

impact of the infringement on the nucleotides

(227) The infringement was committed by undertakings
which, during the material period, held the lion’s share
of the world and European markets for nucleotides.
Moreover, the arrangements were specifically aimed at
raising prices higher than they would otherwise have
been and restricting the quantities sold. Given that these
arrangements were implemented, they had a material
impact on the market.

(228) There is no need to quantify in detail the extent to which
prices differed from those which might have been
applied in the absence of these arrangements. Indeed,
this cannot always be measured in a reliable manner,
since a number of external factors may simultaneously
have affected trends in the price of the product, so
making it extremely difficult to draw conclusions on the
relative importance of all possible causal effects.

(229) The cartel agreements were, however,

the cartel,

the duration of

implemented.
Throughout
the parties
exchanged information on their sales prices and volumes
and, on the basis of those figures, the parties agreed on
target prices (see, for instance, recitals 80, 89, 91, 92 to
94, 97 to 98, 104, 108 to 111, 115 to 116, 118 to 131,
133, 135, 138 to 141). As demonstrated throughout
the factual part of this Decision, the target prices and
price rises were agreed, announced to customers and
implemented throughout the EEA (see, for instance,
recitals 86, 104, 118 to 120, 122, 124, 126, 128, 134,
139 to 141, 144). The parties closely monitored the
implementation of their agreements by organising reg-
ular multilateral and bilateral meetings among them. At
these meetings, the parties exchanged their sales figures,
discussed market prices (thus enabling the parties to
monitor whether the agreed target prices were being
met) and, where necessary, agreed to adjust the target
prices (see, for instance, recitals 92, 109, 111, 124, 128
to 130.

(230) In view of the above and the effort invested by each
participant in the complex organisation of the cartel,
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 nine years must have had an impact on the
market.

(231) Ajinomoto argues that the Commission bases itself
on inconclusive evidence in demonstrating that the
infringement had a significant impact on the market.
According to Ajinomoto, the impact of the infringement
on the market was only limited. In fact, Ajinomoto
submits that it not only proved very difficult to reach
agreements on target prices, but that even where agree-
ments were reached, these agreements were never fully
complied with: deviation from the arrangements was
frequent and not punished and no effective monitoring
system was established. Consequently, according to
Ajinomoto, the infringement was not fully implemented.

In support

(232) In addition, Ajinomoto submits that nucleotide costs
account on average for less than 0,1 % of the price of
the final product and the ability to play suppliers off
against each other limited harm to direct consumers.
Finally, Ajinomoto argues that an analysis of the econ-
omic conditions during the period under review con-
firms that price evolution was consistent with competi-
tive behaviour.
thereof, Ajinomoto has
submitted a report prepared by RBB Economics which
states that there is no basis for concluding that prices in
the 1988 to 1997 period were unusually stable or that
the price drop at the end of 1998/beginning of 1999
reflected the termination of the infringement. According
to the report, it is doubtful that any customer allocation
arrangements between nucleotides manufacturers were
efficient and, secondly, the price drop at the end of
1998/beginning of 1999 is the result of important
changes in external market factors which fundamentally
changed pricing conditions in Europe rather than caused
by the end of the cartel: a substantial increase in capacity
caused by the opening of Cheil’s plant in Indonesia
combined with a stagnation of demand from 1997
onwards led to a high excess in capacity. Devaluation of
Korean and Indonesian currencies created additional
pressure on European prices. In a supplement to its
reply to the statement of objections, Ajinomoto submits
that the average estimates of the capacity data provided
to the Commission by the undertakings (and made
accessible) confirm that price development throughout
the relevant period was consistent with competitive
conditions and the infringement had a limited impact
on the market.

(233) In its reply to the statement of objections, Cheil draws
the same conclusions, emphasising that it was Cheil’s
decision to increase its capacity that caused prices to fall
significantly at the end of 1998/beginning of 1990.
Cheil also argues that the small size of the market means
that the real economic impact of the illegal conduct is
smaller, justifying setting the basic amount of the fine
at a lower level. Furthermore, Cheil, supported by
Daesang (143), argues that the Commission should take
into account when determining the gravity of
the
infringement the fact that the impact of the infringement
on consumers is negligible as well as the fact that the
Koreans were drawn into a pre-existing scheme.

(234) Similarly, Takeda submits that even the maximum
potential impact on ultimate consumers is very limited
in view of the small size of the European market,
the fact that nucleotides are purchased by large food
manufacturers rather than end consumers and in view
of the small cost factor nucleotides constitute in the end
product. Takeda further reserves its rights as to the fact
that the Commission has not sought to quantify precisely
any increase of price caused by the infringement above
the level which would have been obtained.

(143) See both Daesang’s response of 20 September 2002 as well as

the summary sent by letter of 27 November 2002.

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(235) 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
concerning the price stability between 1988 and 1997
and the price drop at the end of 1998/beginning of
1999 may have some validity (in particular regarding
the capacity increase caused by the opening of Cheil’s
new plant in Indonesia towards the end of the cartel),
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 nucleotides market. Indeed, given that the
parties had replaced the uncertain situation of
free
competition with continuous collusion, prices were
necessarily established at a level different to that which
would have prevailed in a competitive market.

(236) The fact, highlighted by Ajinomoto and Cheil, that,
towards the end of the cartel, the production capacity
was significantly increased at a time when demand was
diminishing, leading to a drop in prices (and a reduction
in the capacity utilisation rates of the respective pro-
ducers), certainly illustrates the difficulties encountered
by the parties towards the end of the cartel to influence
prices in a difficult market situation, and perhaps even
the reasons for the collapse of the cartel itself. It does
not, however, demonstrate that the illegal practice had
no effect on the market during the nine-year existence
of the cartel, nor does it demonstrate that prices were
not kept above a competitive level.

(237) On the contrary, when examining the combined efforts
of the cartel members (see recitals 75 to 149, it can
reasonably be concluded that during the entire period of
the cartel, the cartel members managed to maintain
prices at a level higher than they would have been
without the illicit arrangements.

(238) Even if the results sought by the cartel participants were
not entirely achieved, this would not prove that the
cartel did not affect the market. Moreover, it is inconceiv-
able, given, 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 nucleotides market. In this
respect, one can as an example make reference to the
specific congratulations expressed by Ajinomoto to all
cartel members during one of the cartel meetings for the
successful
implementation of the 1995 target prices
(see recital 126 or Annex Z attached to Daesang’s
supplementary submission (144)).

the entire duration of

(239) In their replies to the statement of objections, Ajinomo-
to, Cheil and Daesang have also argued that the Com-
mission’s own evidence shows that they have often
disregarded the arrangements and often acted auton-
omously on the market. This argument cannot, however,
be followed. Not only does the Commission have ample
evidence showing that Ajinomoto, Daesang and Cheil
actually continued to take part in the infringement
throughout
the infringement
(which is also not contested by the parties, except for
Ajinomoto
its participation beyond
August 1996 is concerned), but the fact that any of the
parties may well have had ‘hidden agendas’ causing them
to disregard to some extent the commitments made
towards the other cartel participants does not imply that
they did not implement the cartel agreement. As the
Court of First Instance held in Cascades v Commission, ‘an
undertaking which, despite colluding with its competi-
tors follows a more or less independent policy on the
market may simply be trying to exploit the cartel for its
own benefit’ (145).

far

as

as

The size of the relevant geographic market

(240) 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
determining gravity, the Commission therefore considers
the entirety of the Community and, following its cre-
ation, the EEA to have been affected by the cartel.

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

(241) Taking into account the nature of the behaviour under
scrutiny, its actual impact on the nucleotides 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 infringe-
ment of Article 81(1) of the Treaty and 53(1) of the EEA
Agreement.

(242) A clear distinction must be made between the question
of the size of the product market and that of the actual
impact of the infringement on this product market. It is
not the practice of the Commission to consider the size
of the product market as a relevant factor to assess
gravity.

(243) Nevertheless, without prejudice to the very serious
nature of an infringement, the Commission will in this
case take into consideration the limited size of the
product market.

(144) See page 1076 of the Commission’s file.

paragraph 230.

(145) Case T-308/94 Cascades v Commission [1998] ECR II-925,

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Classification of cartel participants

Sufficient deterrence

the effective economic capacity of

(244) 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
account of
the
offenders 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
market share of the undertakings participating in the
infringement.

(245) In the circumstances of this case, which involves several
undertakings, it will be necessary, when setting the basic
amount of the fines, to take account of the specific
weight, and therefore the real impact on competition, of
each undertaking’s offending conduct.

(246) For this purpose the undertakings concerned can be
divided into different categories according to their
relative importance in the market concerned, subject to
adjustment where appropriate to take account of other
factors, such as in particular, the need to ensure effective
deterrence.

(247) As a basis for comparison of the relative importance
the
the undertakings in the market concerned,
of
Commission 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 party to the cartel also gives an indication of its
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 compari-
son is based on shares of the world market for the
product in the last full calendar year of the infringement
(1997).

(248) Ajinomoto was at all times the largest producer of
nucleotides in the relevant geographic market. In 1997
its estimated share of the world market was between
40 % and 50 %.

(249) Takeda, Cheil and Daesang were smaller players on the
In 1997 their respective
world nucleotides market.
estimated market share was between 10 % and 20 %,
more than two times’ smaller than that of Ajinomoto,
the largest player.

(250) Ajinomoto will therefore constitute a first category.
Takeda, Cheil and Daesang will constitute a second
category.

(251) On the basis of the above, the basic amounts of the fines

determined for gravity should be as follows:

— Ajinomoto: EUR 6 million,

— Takeda, Daesang and Cheil: EUR 2,4 million.

(252) In order to ensure that the fine has a sufficient deterrent
effect and takes account of the fact that large undertak-
ings have legal and economic knowledge and infrastruc-
tures which enable them more easily to recognise that
their conduct constitutes an infringement and be aware
of the consequences stemming from it under compe-
tition law,
further determine
whether any further adjustment of the basic amount is
needed for any undertaking.

the Commission will

(253) With respective worldwide turnovers of EUR 8,7 billion
and EUR 9,2 billion in 2001, Ajinomoto and Takeda are
much larger players than Daesang (worldwide turnover
of EUR 1,4 billion (2001)) and Cheil (worldwide turn-
over of EUR 1,9 billion in 2001). In this respect, the
Commission considers that
the appropriate starting
point for the fines based on the criterion of the relative
importance in the market concerned requires further
upward adjustment to take account of the size and the
overall resources of Ajinomoto and Takeda respectively.

(254) On the basis of the above, the Commission considers
that the need for deterrence requires the starting point
for the fines determined in recital 251 to be increased
by 100 % to EUR 12 million as regards Ajinomoto and
by 100 % to EUR 4,8 million as regards Takeda.

Duration of the infringement

(255) The Commission considers that Daesang has infringed
Article 81(1) of the Treaty from 19 December 1988
until the end of 1997 and Article 53(1) of the EEA
Agreement from 1 January 1994 until the end of 1997.

(256) The Commission considers that Cheil has infringed
Article 81(1) of the Treaty from March 1989 until 2 June
1998 and Article 53(1) of the EEA Agreement from
1 January 1994 until 2 June 1998.

(257) Takeda submitted that the Commission should take the
date of the last known cartel meeting as the final date
for the infringement. As demonstrated above under
‘Duration’, the evidence in the file shows that 2 June
1998 was, in fact, the last known illicit contact between
Takeda and a cartel member. Consequently, the Com-
mission considers that Takeda infringed Article 81(1) of
the Treaty from 8 November 1988 until 2 June 1998
and Article 53(1) of the EEA Agreement from 1 January
1994 until 2 June 1998.

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(258) Lastly, Ajinomoto contests the duration of the infringe-
ment, only admitting its participation in the infringe-
ment until August 1996. The duration of Ajinomoto’s
participation in the cartel is discussed in recitals 202 to
210). The Commission considers that Ajinomoto has
infringed Article 81(1) of the Treaty from 8 November
1988 until at least September 1997 and Article 53(1) of
the EEA Agreement from 1 January 1994 until at least
September 1997.

(259) The Commission therefore concludes that Takeda, Aji-
nomoto, Daesang and Cheil have committed the
infringement for respectively nine years and six months
(Takeda), eight years and nine months (Ajinomoto), nine
years (Daesang) and nine years and two months (Cheil),
which corresponds to a long duration (more than five
years). The starting amounts of the fines determined for
gravity (see recitals 251 and 254) are therefore increased
by 10 % per year and 5 % per six months, i.e. by 95 %
as far as Takeda is concerned, 90 % as far as Cheil and
Daesang are concerned and 85 % as far as Ajinomoto is
concerned.

(260) Cheil submits however in its reply to the statement of
objections that, although the Guidelines on the method
of setting fines imposed pursuant to Article 15(2) of
Regulation No 17 and Article 65(5) of
the ECSC
Treaty (146) indicate that an infringement of ‘long dur-
ation’ may merit an increase of 10 % per annum, this
does not mean that every infringement should be subject
to such a ‘per year’ increase. In particular, Cheil submits
that the Commission should consider applying a lower
increase on account of duration than the standard 10 %
per year for the period from March 1989 to the start of
1992 in the light of the small participation of Cheil in
the infringement during that period (and the resulting
small impact on the market). Similarly, Cheil submits
that regarding the post-1996 events, such an approach
would be equally justified in view of the fact that the
intensity of these events was much lower and in view of
Cheil’s 1996 decision to increase capacity (effective
towards the end of the 1990s).

(261) The Commission must reject this argument. Cheil’s
participation in the infringement during the entire
duration of the infringement has been established in the
factual part of this Decision. It is also established that
the infringement had an impact on the EEA market. The
mere fact that a participant in a cartel may play the role
which is appropriate to its own specific circumstances
does not exclude its responsibility for the infringement
as a whole. An undertaking which takes part in the
common unlawful enterprise by actions which con-
tribute to the realisation of the shared objective is equally
responsible, for the whole period of its adherence to the
common scheme, for the acts of the other participants
pursuant to the same objective (147). The Commission
therefore considers
that Cheil participated in the
infringement in the same manner throughout the entire
duration of the infringement.

(146) OJ C 9, 14.1.1998, p. 3.
(147) Judgment of the Court of Justice in Commission v Anic, para-

graph 83.

Conclusion on the basic amounts

(262) The basic amounts of the fines should therefore be as

follows:

— Takeda: EUR 9 360 000,

— Ajinomoto: EUR 22 200 000,

— Daesang: EUR 4 560 000,

— Cheil: EUR 4 560 000.

2. Aggravating circumstances

(263) The Commission has not identified any aggravating
circumstances to be taken into account in this Decision.

3. Attenuating circumstances

Exclusively passive role in the infringement

(264) Cheil and Daesang state in their reply (148) that they
always played a passive or ‘follow-my-leader’ role in the
infringement. They were drawn into a pre-existing cartel
which was lead by Takeda and, to a minor extent,
Ajinomoto who wished to protect their own markets and
limit competition through counterpurchases. Ajinomoto
states in this respect that it played a subordinate role to
Takeda, who should be considered as the real leader of
the cartel. Moreover, the Korean producers argue that
they are much smaller than their Japanese counterparts,
which also demonstrates the limited impact of their
behaviour on the market.

(265) The effective economic capacity of the undertakings to
influence the EEA market on the basis of their economic
size has been taken into account in the calculation of
the basic amount of the fine (see recitals 244 to 251).

(266) Even if, on the basis of these statements, there might be
certain elements indicating that the Japanese undertak-
ings started the cartel and took the initiative to organise
certain meetings, the Commission has no reason to
consider that either of the Korean producers played a
purely passive role or ‘follow-my-leader role’
in the
infringement. Both undertakings participated in the vast
majority of the cartel meetings identified and took part
directly and actively in the infringement. Indeed, Cheil
and Daesang took part in the meetings and exchanged
sales information throughout their participation. They
cannot therefore claim to have played a purely ‘passive
role’ (149).

(148) See also Daesang’s summary statement of 27 November 2002.
(149) See, for instance, paragraph 365 of Commission Decision 2001/
418/EC in Case COMP/36.545/F3 Amino Acids (OJ L 152,
7.6.2001, p. 24).

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(267) For example, Daesang’s own report of the meeting that
took place in December 1995 in review of the 1995
cooperation (150) shows clearly that all parties had
cooperated in implementing the 1995 price increases
and all parties agreed to continue the cooperation for
1996. As shown by the facts, Cheil and Daesang would
in turn also make proposals on target prices and hold
meetings among them to prepare a common position
for the producers meetings.

(268) In view of the totality of the evidence in this case, as
described under the factual part of this Decision, the
picture is that of a cartel in which all parties participated
actively and directly in the infringement, exchanging
their sales figures and reviewing and discussing the
target prices. All participants held a shared interest in the
arrangements. All cartel members have been identified as
participating in most of the cartel meetings and taking
turns organising the meetings concerned. As such, there
is also no undertaking which can be considered as a
leader in the sense of the Guidelines.

Non-implementation in practice of the offending
agreements

(269) As discussed in recital 229, the Commission considers
that the anti-competitive agreements were implemented.
This attenuating circumstance is not therefore applicable
to any of the addressees of this Decision. The Com-
mission notes that in principle, an agreement restricting
competition is implemented where the cartel members
determine their conduct on the market according the
joint intentions expressed. In case of repeated agree-
ments, concluded over a long period, it can be presumed
that the agreements have been implemented by each of
the participants as they would otherwise not have
repeatedly agreed to meet in locations worldwide to fix
prices and allocate customers over such a long period of
time. None of
forward by the
the arguments put
parties, can validly overthrow the proof adduced by the
Commission.

(270) As already stated in recital 239, 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 (151). The
fact, as is claimed by the parties, that they regularly did
not comply with the agreed arrangements, can therefore
not be regarded as sufficient evidence demonstrating the
non-implementation of the agreements.

Other attenuating circumstances

(271) In its reply to the statement of objections, Ajinomoto
submits that the Commission should regard its unilateral
and voluntary termination of its participation, in particu-
lar prior to any Commission intervention, in the infringe-
ment as a mitigating circumstance as well as the fact
that this unilateral withdrawal would have contributed
to the unravelling of the infringement.

(272) In support thereof, Ajinomoto refers to Takeda’s internal
memoranda of 28 May 1997 and 9 June 1997 (152), and
Takeda’s corporate statement (153), where reference is
made to the concerns of the cartel members with regard
to Ajinomoto’s decision no longer to participate in the
multilateral meetings after August 1996 and the effects
this would have on these meetings.

(273) This argument must be rejected. It has been demon-
strated under ‘Duration’ that Ajinomoto’s decision no
longer to participate in the multilateral meetings after
August 1996 can not be considered as demonstrating
its unilateral termination of
its participation in the
infringement as from that date. On the contrary, the
Commission considers that it continued to participate in
the infringement by maintaining bilateral contacts with
Takeda, discussing the nucleotides market and prices. In
these circumstances, the Commission considers that
Ajinomoto’s lack of participation in the multilateral
meetings can only have played a minor role, if indeed
any at all, in the ‘unravelling’ of the cartel.

(274) Cheil submits that the Commission should take into
account the fact that it has already been fined for this
infringement in the USA, claiming that undertakings
should not be exposed to ‘double jeopardy’ and that the
Commission should solely base the level of the fine on
the effects that the infringement had in the relatively
small Community market.

(275) This argument should be rejected. Fines imposed in
other jurisdictions, including the USA, do not have any
bearing on the fines to be imposed for infringing
Community competition rules. The exercise by the
United States (or any other third country) of its jurisdic-
tion over cartel behaviour can in no way limit or exclude
the Commission’s jurisdiction under Community com-
petition law. It is noted that by virtue of the principle of
territoriality, Article 81 of the Treaty is limited to
restrictions of competition in the common market and
Article 53 of the EEA Agreement is limited to restrictions
of competition in the EEA market. In the same way, the
US antitrust authorities only exercise jurisdiction to the
extent that the conduct has a direct and intended effect
on the United States.

(150) See Annex Z attached to Daesang’s supplementary submission,

page 1076 of the Commission’s file.

(151) Case T-308/94 Cascades SA v Commission, paragraph 230.

(152) Respectively, pages 2147 and 2151 of the Commission’s file.
(153) Takeda’s statement, page 2173 of the Commission’s file.

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(276) Takeda submits that the Commission should take into
account the fact that it already paid a substantial fine in
the Vitamins case (154). Ajinomoto puts forward a similar
argument in relation to the fine it paid in the Lysine
case (155). The Commission rejects that argument. The
Vitamins case and the Lysine case did not deal with
Takeda’s and Ajinomoto’s infringement on the nucleo-
tides market and can therefore not be taken into account
for the purpose of this Decision.

(277) Cheil and Daesang further submit that they regularly did
not comply with the arrangements and even acted
against them, such as by increasing production capacity
or undercutting the target prices.

(278) 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
circumstance 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 (156).

(279) Ajinomoto, Cheil and Takeda also point out that they
have taken measures to prevent any future infringement
of anti-trust rules. In this context, they have adopted or
strengthened compliance programmes. The Commission
welcomes the fact that these undertakings have set up
an anti-trust
It nevertheless
law compliance policy.
considers that this initiative came too late and cannot, as
an instrument of prevention, dispense the Commission
from its duty to penalise an infringement of the compe-
tition rules committed by these undertakings in the past.
In the light of the above, the adoption of a compliance
programme should not be considered as an attenuating
circumstance justifying a reduction in the fine.

(280) There are therefore no attenuating circumstances appli-
cable to the participants in this infringement affecting
the nucleotides market.

4. Application of the leniency notice

(281) 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 treatment set out in the Leniency Notice.
In order to meet the legitimate expectations of the

undertakings concerned as to the non-imposition or
reduction of the fines on the basis of their cooperation,
the Commission examines in the following section
whether the parties concerned satisfied the conditions
set out in the Leniency Notice.

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

(282) Takeda has requested the benefit of maximum leniency.
In this respect, Takeda claims that it should benefit
from changes in the leniency policy introduced by
the Commission Notice on immunity from fines and
reduction of fines in cartel cases (157) published in 2002
(the 2002 Leniency Notice), arguing that it did not take
any steps to coerce any other undertaking to participate
in the infringement. Consequently, Takeda submits that
it could qualify for maximum leniency under the new
rules. Takeda argues that Community law recognises the
principle that in certain circumstances, retroactive effect
should be given to changes in the treatment of penalties
having a deterrent effect, and that principle can apply
more generally in relation to administrative decisions, as
is applied in a number of Member States.

(283) The 2002 Leniency Notice clearly states that it is not
applicable to cases in which undertakings have already
contacted the Commission to take advantage of the
favourable treatment set out in the previous notice.
Consequently, all leniency applications should be treated
in the light of the provisions of the Leniency Notice
published in 1996, which remains applicable for the
purpose of this Decision.

(284) The Commission acknowledges that Takeda was the first
to come forward adducing decisive evidence of the
existence of
the cartel and maintaining continuing
and complete cooperation throughout the investigation.
Takeda first informed the Commission of the existence
of the cartel on 9 September 1999, handing over a file
with contemporaneous evidence on 14 September 1999.
At that time, the Commission had not received any
information of the cartel from any other source.

(285) In assessing Takeda’s cooperation,

the Commission
notes that the documentary evidence it first produced
did not relate to the activities of the cartel prior to
1992. Nevertheless, in its corporate statement, Takeda
indicated that the cartel did in fact originate in 1989.
There is no indication that Takeda has any other
information or documents available concerning the
cartel. Therefore, it must be concluded that Takeda’s
cooperation with the Commission has been complete.

(154) Case 37.512, not published yet.
(155) Case 36.545 (OJ L 152 7.6.2001, p. 24-72).
(156) Case T-308/94 Cascades SA v Commission, paragraph 230.

(157) OJ C 45, 19.2.2002, p. 3.

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(286) Despite there being elements in the file indicating
that Takeda may have played, on certain occasions, a
coordinating role in the cartel, Takeda did not compel
any other enterprise to take part in the cartel and did
not act as an instigator in the cartel nor did it play a
determining role in the illegal activity in the sense of the
Leniency Notice. It has also been established that Takeda
had put an end to its involvement in the infringement
before coming forward to the Commission.

(287) In the light of its overall cooperation in the investigation,
Takeda fulfils the conditions set out in Section B of the
Leniency Notice and should be granted a 100 %
reduction in the fine that would have been imposed had
it not cooperated with the Commission.

Substantial reduction in a fine (Section C)

(288) Daesang, Cheil and Ajinomoto request the benefit of a
reduction in fine in accordance with Section C of the
Leniency Notice. At the time when Daesang, Cheil and
Ajinomoto started to cooperate with the Commission,
Takeda had already submitted sufficient information to
establish the existence of the cartel. Consequently, it is
concluded that Daesang, Cheil and Ajinomoto were not
to provide the Commission with decisive
the first
evidence on the existence of the nucleotides cartel, as
required under point (b) of Section B of the Leniency
Notice. Accordingly, none of those undertakings meets
the conditions as set out in Section C.

Significant reduction of a fine (Section D)

(289) Daesang submits that it not only offered to cooperate
with the Commission’s investigation before the Com-
mission issued the first request for information but
also provided the Commission with its complete and
continuous cooperation throughout the investigation. It
also argues that it has enabled the Commission to
establish the entire duration of the infringement as from
October 1988 and was thus the first to adduce decisive
evidence of
in the
statement of objections.

the entire infringement set out

(290) Although Daesang only contacted the Commission
after Takeda had already come forward, it nevertheless
contacted the Commission on its own initiative prior to
receiving any request
In addition,
Daesang fully cooperated with the Commission’s investi-
gation throughout the entire investigation. Daesang also
provided information that contributed materially to
establishing the facts relating to the existence of the
cartel arrangements prior to 1992.

for information.

(291) The information provided by Daesang, prior to the
Commission sending it a request for information, was
detailed and extensively used by the Commission in
the pursuit of its investigation. In particular, but not
exclusively, Daesang provided valuable information on
the operation of the cartel prior to 1992. After receiving

the statement of objections, Daesang did not substan-
tially contest the facts on which the Commission bases
its findings. Daesang therefore fulfils the conditions set
out in the first and second indent of paragraph 2 of
Section D of the Leniency Notice and should conse-
quently be granted a reduction of the fine of 50 %.

(292) Cheil provided many contemporaneous reports of meet-
ings and contacts thus materially contributing to estab-
lishing the existence of the cartel. The information
provided by Cheil was extensively used by the Com-
mission. Furthermore, Cheil does not contest the facts
of the infringement as set out by in the statement of
objections. It must therefore be concluded that Cheil
fulfils the conditions as set out in the first and second
indent of paragraph 2 of Section D of the Leniency
Notice, as argued by Cheil. Consequently, in view of the
overall cooperation provided by Cheil to the Com-
mission’s investigation,
it should be granted a 40 %
reduction in the fine that would have been imposed had
it not cooperated with the Commission.

(293) Ajinomoto has fully cooperated with the Commission
during the entire duration of the investigation, assisting
the Commission in materially establishing the existence
of the infringement, providing contemporaneous docu-
ments which were extensively used by the Commission
as well as clarifications given on the operation of
the arrangements. Consequently, Ajinomoto fulfils the
conditions laid down under the first indent of para-
graph 2 of Section D of the Leniency Notice.

(294) However, Ajinomoto contests the facts as set out in the
statement of objections as far as the duration of the
cartel is concerned. Ajinomoto therefore does not qualify
for a reduction of the fine pursuant to the second indent
of paragraph 2 of Section D of the Leniency Notice. On
the basis of the foregoing, it is concluded that Ajinomoto
fulfils the conditions set out in the first indent of
paragraph 2 of Section D of the Leniency Notice and
should accordingly be granted a reduction of 30 %.

Conclusion on the application of the Leniency
Notice

(295) In conclusion, with regard to the nature of

their
cooperation and in the light of the Leniency Notice, the
addressees of
this Decision should be granted the
following reductions of their respective fines:

— to Takeda: a reduction of 100 %,

— to Ajinomoto: a reduction of 30 %,

— to Daesang: a reduction of 50 %,

— to Cheil: a reduction of 40 %.

12.3.2004

EN

Official Journal of the European Union

L 75/31

5. The final amounts of the fines imposed in these

— Ajinomoto

Company

Incorporated,

a

fine

of

proceedings

EUR 15 540 000,

(296) In conclusion, the fines to be imposed, pursuant to
Article 15(2)(a) of Regulation No 17, should be as
follows:

— Takeda: EUR 0,

— Ajinomoto: EUR 15 540 000,

— Daesang: EUR 2 280 000,

— Cheil: EUR 2 736 000,

HAS ADOPTED THIS DECISION:

Article 1

Ajinomoto Company Incorporated, Takeda Chemical Indus-
tries Limited, Daesang Corporation and Cheil Jedang Corpor-
the Treaty and
ation have infringed Article 81(1) of
Article 53(1) of the EEA Agreement by participating, in the
manner and to the extent set out in the reasoning, in a complex
of agreements and concerted practices in the nucleotides
sector.

The duration of the infringement was as follows:

(a) Ajinomoto Company Incorporated, from 8 November

1988 until September 1997;

(b) Takeda Chemical Industries Limited, from 8 November

1988 until June 1998;

(c) Daesang Corporation, from 19 December 1988 until the

end of 1997;

(d) Cheil

Jedang Corporation,

from March 1989 until

June 1998.

Article 2

The undertakings listed in Article 1 shall immediately bring to
an end the infringement referred to therein, in so far as they
have not already done so.

— Daesang Corporation, a fine of EUR 2 280 000,

— Cheil Jedang Corporation, a fine of EUR 2 736 000.

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

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

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

Article 4

This Decision is addressed to:

Takeda Chemical Industries Limited
12-10, Nihonbashi 2-chome
Chuo-ku
Tokyo 103-8668
Japan

Ajinomoto Company Incorporated
15-1, Kyobashi itchome
Chuo-ku
Tokyo 104-8315
Japan

Cheil Jedang Corporation
6F, Cheiljedang Bldg
Namdaemoon-Ro
Chung-Ku, 100-095 Seoul
Korea

Daesang Corporation
Daesang Building
96-48 Shinsul-Dong
Dongdaemoon-Ku, Seoul
Korea

They shall refrain from any agreements or concerted practices
in relation to their activities in nucleotides that may have the
same or similar object or effect as the infringement.

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

Article 3

Done at Brussels, 17 December 2002.

The following fines are hereby imposed on the undertakings
listed in Article 1 in respect of the infringement referred to
therein:

For the Commission

Mario MONTI

Member of the Commission