Opinion ID: 805979
Heading Depth: 3
Heading Rank: 1

Heading: The August 2002 Price Increase

Text: In August 2002, soon after he became President of UPM’s Magazine Paper Division and twenty years after they last worked as colleagues, Tynkkynen invited Korhonen, who by then had become President of SENA, to lunch. As he later testified at SENA’s criminal trial, Tynkkynen wanted Korhonen to provide him with insight into operating in the North American market, a market with which Tynkkynen was unfamiliar. Tynkkynen also sought to determine whether SENA had sufficient market power to lead a price increase in the United States. In response to Tynkkynen’s invitation, Tynkkynen and Korhonen met for approximately 90 minutes on August 8 in a private executive lunchroom at UPM’s headquarters in Helsinki. During the meeting, Korhonen expressed his opinion that, contrary to Tynkkynen’s view, SENA was not a market leader for coated grade 5 or supercalendered paper. Tynkkynen and Korhonen estimated that together SENA and UPM likely would have a combined 40% market share for coated grade 5 paper. Tynkkynen advised Korhonen, “UPM has been a follower and will be a follower”—meaning that UPM would follow price increases announced by any major competitor and would also try to implement those increases consistently with its 7 customers.5 Trial Tr. at 177, 104. No one else was present during the meeting, and Korhonen did not disclose to anyone at SENA that he met with Tynkkynen or mention the substance of their discussion. The following day, on August 9, IP and Mead announced a $2 per hundredweight (“cwt.”) price increase for publication paper grades 2 through 4 effective October 1, 2002. Four days later, on August 13, SENA issued an identical announcement as to price, paper grades, and effective date. On August 21, UPM announced its $2 per cwt. price increase for publication paper grades 3 and 4, on the same schedule. (According to plaintiffs, UPM sold little or no grade 2 publication paper in the United States at that time.)