2006/897/EC: Commission Decision of 19 January 2005 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement against Akzo Nobel NV, Akzo Nobel Nederland BV, Akzo Nobel Chemicals BV, Akzo Nobel Functional Chemicals BV, Akzo Nobel Base Chemicals AB, Eka Chemicals AB, and Akzo Nobel AB, jointly and severally, Clariant AG and Clariant GmbH jointly and severally, Elf Aquitaine SA and Arkema SA, jointly and severally, and Hoechst AG (Case No C.37.773 — MCAA) (notified under document number C(2004) 4876)   (Text with EEA relevance)
Date: 2005-01-19
Institutions: European Commission
Subjects: fine, infringement procedure (EU), merger control, organic acid, restriction on competition, restrictive trade practice

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COMMISSION DECISION

of 19 January 2005

relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement
against Akzo Nobel NV, Akzo Nobel Nederland BV, Akzo Nobel Chemicals BV, Akzo Nobel
Functional Chemicals BV, Akzo Nobel Base Chemicals AB, Eka Chemicals AB, and Akzo Nobel AB,
jointly and severally, Clariant AG and Clariant GmbH jointly and severally, Elf Aquitaine SA and
Arkema SA, jointly and severally, and Hoechst AG

(Case No C.37.773 — MCAA)

(notified under document number C(2004) 4876)

(Only the English, French and German texts are authentic)

(Text with EEA relevance)

(2006/897/EC)

On 19 January 2005, the Commission adopted a decision relating to a proceeding under Article 81 of the EC Treaty and
Article 53 of the EEA Agreement. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/
2003 (1), the Commission herewith publishes the names of the parties and the main content of the decision, including any
penalties imposed, while having regard to the legitimate interest of undertakings in the protection of their business
interests. A non-confidential version of the full text of the decision can be found in the authentic languages of the case and
in the Commission's working languages at DG COMP's website at the following address: http://europa.eu.int/comm/
competition.

I.

SUMMARY OF THE INFRINGEMENT

Introduction

textile auxiliaries
manufacture of detergents, adhesives,
and thickeners used in food, pharmaceuticals and cos-
metics.

(1)

The Decision is addressed to Akzo Nobel NV, Akzo Nobel
Nederland BV, Akzo Nobel Chemicals BV, Akzo Nobel
Functional Chemicals BV, Akzo Nobel Base Chemicals AB,
Eka Chemicals AB, and Akzo Nobel AB (hereinafter ‘Akzo’),
jointly and severally, Clariant AG and Clariant GmbH
(hereinafter ‘Clariant’) jointly and severally, Elf Aquitaine SA
(hereinafter ‘Elf Aquitaine’) and Arkema SA (hereinafter
‘Arkema’,
jointly and
formerly known as Atofina SA),
severally, and Hoechst AG (hereinafter ‘Hoechst’).

(2) Reference in this summary will be made mostly to Atofina
SA (or ‘Atofina’) and not to Arkema, even though it is the
addressee of this Decision, as Atofina was the name in use
during the administrative procedure.

(3)

(4)

The addressees participated in a single and continuous
infringement of Article 81 of the Treaty establishing the
European Community (hereinafter ‘the EC Treaty’ or ‘the
Treaty’) and, from 1 January 1994, Article 53(1) of the
Agreement on the European Economic Area (hereinafter
‘EEA Agreement’), covering the whole of the EEA territory.

The Commission initiated an investigation into the EEA-
wide MCAA industry after it received a leniency application
in December 1999 from Clariant. The investigation revealed
that the cartel lasted from at least 1 January 1984 to 7 May
1999.

The market for mcaa

(6)

(7)

(8)

The geographic market was considered to be the EEA. The
value of this market was approximately EUR 121 million in
1998, the last full year of the infringement. During the
period of investigation, almost every part of the common
market and the EEA was under the influence of the cartel.

Description of the cartel

In terms of the organisation of the cartel, contacts between
the major producers of MCAA can be traced back to the
late 1970s and early 1980s and at this stage were largely
bilateral and related to the exchange of customer and
pricing information.

By the early to mid 1980s multilateral meetings began to be
organised and arrangements became more solidified with
the aim of maintaining their respective market shares. The
participants at this stage were Hoechst, Akzo and Atochem
SA (subsequently Atofina SA, now known as Arkema).
Clariant joined only in 1997 after it purchased Hoechst's
MCAA business.

(5) Monochloroacetic acid (or ‘MCAA’) is a reactive organic
intermediate used in the

acid which is a chemical

(1) OJ L 1, 4.1.2003, p. 1. Regulation as amended by Regulation (EC)

No 411/2004 (OJ L 68, 6.3.2004, p. 1).

(9) At this time the participants would meet 2-4 times a year
on a multilateral basis with meetings organised on a
rotating basis in the respective countries of the under-
takings involved. Bilateral contacts were maintained and the
participants also met during special meetings and social
occasions.

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(10) The cartel became more formalised in 1993 with the aim of
having more transparent statistics, stamping out cheating,
having greater control over sales personnel and implement-
ing a compensation system. A formal system of exchange of
quarterly sales and price data was also implemented
between the participants.

Differential treatment

(17) The undertakings were divided into different categories
according to their relative importance in the market to
for the specific weight and therefore the real
account
impact of each undertaking on the market.

(11)

In addition, in an attempt to justify the exchanged market
figures a statistical organisation, […] (hereinafter ‘[…]’), was
retained. […] provided aggregated market statistics and the
participants met a […] representative twice a year, usually
in Zurich, to discuss these and other matters of industry
concern.

(12) However, these legitimate meetings served as a cover for the
real purpose of the gatherings which was for the parties to
get together to discuss the implementation of the cartel
arrangements. These illegal meetings usually took place the
evening prior to the […] meeting at a separate location. 13
[…] meetings were planned between 1994-1999 although
the final meeting appears to have been cancelled.

(13) Even though the organisation of the cartel may have shifted
in the course of its duration, essential features remained the
same. This involved volume and customer allocation in
order
to maintain market shares. Market shares were
additionally safeguarded by a compensation mechanism
between the parties in the event of over- or under-selling.
There was significant exchange of sales and price informa-
tion and also evidence of concerted price increases.

II:

FINES

Basic amount

Gravity

(14) The infringement consisted of allocating customers and
volume quotas, agreeing concerted price increases, arran-
ging a compensation mechanism to ensure the implemen-
tation of quotas, exchanging sales volumes and prices, and,
participating in regular meetings, both multilateral and
bilateral, as well as other contacts to ensure the proper
functioning of the cartel. These types of conduct are by
their very nature very serious violations of Articles 81 EC
and 53(1) EEA.

(15) The cartel agreement was implemented by producers,
which for the relevant period covered the vast majority of
the Common market and the EEA, after 1 January 1994. It
must therefore have had an impact on the MCAA market in
the Common market and the EEA.

(18) As the basis for comparing the relative importance of an
undertaking in the market concerned, the Commission
considered it appropriate to take the EEA-wide product
turnover. The comparison was made on the basis of the
EEA-wide product turnover in the last full year of the
infringement: 1998 for all the undertakings except for
Hoechst for whom 1996 was the reference year, as it exited
the MCAA market in mid-1997.

(19) Akzo, Clariant, and Atofina were the major producers of
MCAA in the EEA in 1998, with respective approximate
market shares of 44 %, 34 % and 17 %. Hoechst had a
market share of 28 % in 1996 before it exited the MCAA
market in mid-1997. The undertakings were therefore split
into three categories. First category: Akzo; second category:
Hoechst and Clariant; third category: Atofina.

Sufficient deterrence

(20) Within the category of very serious infringements, the scale
of likely fines also makes it possible to set the fines at a
level which ensures that they have sufficient deterrent effect,
taking into account the size of each undertaking. In this
respect, the Commission noted that in 2003 the turnover
of Atofina/Elf Aquitaine was EUR 84,5 billion, and that of
Akzo was EUR 13 billion. Accordingly, the Commission
considered it appropriate to multiply the fine for Atofina/Elf
Aquitaine with a factor of 2,5 and that of Akzo with a
factor of 1,5.

Duration

(21) Akzo and Atofina have committed an infringement of a
long duration. They participated in the cartel from January
1984 to May 1999, equating to 15 years and four months,
which justified an increase of 150 % of the basic amount of
the fine for both undertakings.

(22) Hoechst has also committed an infringement over a long
time, by being involved in the illegal arrangements from
January 1984 to the end of June 1997, or a period of 13
years and 6 months, which justified an increase of 135 % of
the basic amount of the fine.

(16) Given the nature of

the behaviour under scrutiny, the
Commission considered that the addressees of this Decision
committed a very serious infringement of Article 81 EC and
53(1) EEA.

(23) Clariant's participation is restricted to the period from July
1997, date at which it acquired the MCAA business from
Hoechst, to May 1999. It was accordingly involved in the
cartel for a period of 1 year and 10 months, which justified
an increase of 15 % of the basic amount of the fine.

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Aggravating circumstances

Recidivism

the fine that would otherwise have been imposed on
Clariant AG and Clariant GmbH had they not cooperated
with the Commission.

(24) At

two of

took place,

the time the infringement

the
addressees of this Decision had already been subject to
previous Commission Decisions in cartel cases. Hoechst
was an addressee in the PVC II (94/599/EC; 27 July 1994)
and Dyestuffs (69/243/EEC; 24 July 1969) Commission
Decisions. Atofina was also an addressee of the PVC II
Decision. These aggravating circumstances justified an
increase of 50 % in the basic amount of the fine imposed
on Hoechst and Atofina.

2.

Substantial reduction in a fine (‘Section C’: reduction from
50 % to 75 %)

(29) Neither Akzo or Atofina met the conditions set out in

Section C of the Leniency Notice.

Attenuating circumstances

3.

Significant reduction of a fine (‘Section D’: reduction from
10 % to 50 %)

Effective cooperation outside of the 1996 Leniency Notice

(25) Akzo made voluntary statements which allowed the
Commission to conclude that Eka Nobel AB, Eka Nobel
Skoghall AB and Nobel Industrier AB (now respectively Eka
Chemicals AB, Akzo Nobel Base Chemicals AB and Akzo
Nobel AB) were independently involved in the cartel from
15 June 1993 until they became part of the Akzo group on
25 February 1994. As a result of Akzo's disclosures it faces
a higher fine than it would without its cooperation. The
Commission therefore considered it appropriate, having
regard to the principles of
fairness and the particular
circumstances of the case, to reduce to zero the fine on the
above companies for their independent infringement.

Application of the 1996 Leniency Notice

(26) Three of the addressees (Akzo, Atofina and Clariant) of the
present Decision co-operated with the Commission at
different stages of the investigation into the infringement
for the purpose of receiving the favourable treatment set
out in the Commission's 1996 Leniency Notice (2).

(27) The Leniency Notice was applied as follows in the Decision:

1. Non-imposition of a fine or a very substantial reduction of
its amount (‘Section B’: reduction from of 75 % to 100 %)

(28) Clariant was the first undertaking to submit decisive
evidence on the existence of a secret cartel affecting the
MCAA industry in the EEA. This information was provided
in a statement and evidence submitted by Clariant on
6 December 1999, and, it enabled the Commission to carry
out an investigation at the premises of Akzo and Atofina.
Clariant also fulfilled the other conditions of Section B: it
in the cartel, cooperated fully
ended its involvement
throughout
the investigation and did not act as an
instigator of the cartel. The Decision took into account
all of these elements when granting a 100 % reduction of

(2) According to point 28 of

the 2002 Leniency Notice,

from
14 February 2002, the 2002 Notice replaces the 1996 Notice for
all cases in which no undertaking has contacted the Commission in
order to take advantage of the favourable treatment set out in that
notice. As in this case several undertakings applied for leniency with
the Commission before 14 February 2002, the 1996 Leniency Notice
applies.

(30) Both Akzo and Atofina co-operated with the Commission.

(31) Atofina closely cooperated with the Commission and
therefore qualified for a significant reduction in the amount
of the fine as it was the second undertaking that provided
the Commission with information and evidence that
materially contributed to the establishment of the existence
of the cartel. Additionally, Atofina did not contest the facts
relied upon to establish the existence of the cartel. The
information and evidence provided by Atofina was detailed
and extensively relied upon by the Commission in this
Decision. Atofina fulfilled the conditions set out in Section
D and its cooperation is reflected in a 40 % reduction of the
fine that would otherwise have been imposed.

(32) Akzo qualified for a significant reduction of the amount of
the fine as it was the third undertaking that provided the
Commission with information and evidence that corrobo-
rated the existence of the MCAA cartel. Akzo did not
contest the facts that the Commission relied upon. The
Commission concluded that Akzo fulfilled the conditions
set out
in Section D. The information and evidence
provided by Akzo was detailed, was relied upon by the
Commission and this is reflected in the 25 % reduction of
the fine that would otherwise have been imposed.

Decision

(33) The following undertakings infringed Article 81 of the
Treaty by allocating volume quotas, allocating customers,
agreeing concerted price increases, agreeing on a compen-
exchanging information on sales
sation mechanism,
volumes and prices, and, participating in regular meetings
and other contacts to agree and implement the above
restrictions. The following undertakings’ behaviour also
constituted an infringement of Article 53(1) of the EEA
Agreement as from 1 January 1994.

(a) Akzo Nobel Chemicals BV, Akzo Nobel Functional
Chemicals BV, Akzo Nobel Nederland BV and Akzo
Nobel NV, from 1 January 1984 to 7 May 1999;

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(b) Akzo Nobel Base Chemicals AB, Eka Chemicals AB
and Akzo Nobel AB, from 15 June 1993 to 7 May
1999;

(c) Hoechst AG, from 1 January 1984 to 31 June 1997;

(d)

Elf Aquitaine and Arkema SA (formerly known as
Atofina SA), from 1 January 1984 to 7 May 1999;

(e) Clariant AG, Clariant GmbH, from 1 July 1997 to

7 May 1999.

(34) For these infringements, the following fines are imposed:

EUR 84,38 million;

(a)

Akzo Nobel Chemicals BV,
Akzo Nobel Nederland BV,
Akzo Nobel NV, Akzo Nobel
Functional
BV,
Akzo Nobel Base Chemicals
AB, Eka Chemicals AB and
Akzo Nobel AB:

Chemicals

(b) Hoechst AG:

EUR 74,03 million;

(c)

(d)

(e)

Elf Aquitaine SA and Arkema
SA (formerly known as Ato-
fina SA) jointly and severally:
Arkema SA (formerly known
as Atofina SA):
Clariant AG and Clariant
GmbH jointly and severally:

EUR 45,00 million;

EUR 13,50 million;

EUR 0 million.

Akzo Nobel Base Chemicals AB, Eka Chemicals AB and
Akzo Nobel AB shall be jointly and severally liable for
the first
payment of
paragraph, up to an amount of EUR 50,63 million. The
other Akzo companies listed in that point shall be jointly
and severally liable for the full amount of the fine.

the fine imposed in point (a) of

(35) The undertakings listed in point 1 above shall immediately
bring their infringement to an end, insofar as they have not
already done so. They shall refrain from repeating any act
or conduct as the infringement found in this case, and from
any act or conduct having the same or similar object or
effect.