In recent months the Commission has granted 100% immunity from fines to a “whistle-blower” in various cartel cases under its leniency policy. The application of the leniency policy in individual cases can result in two competitors receiving entirely different treatment for their participation in the same cartel, even if their respective culpability was approximately equal during the operation of the cartel, especially if neither of them were the main instigator. The recent experience has shown that one such competitor may obtain a zero fine as a result of providing full information to the Commission to enable the Commission to identify and pursue a cartel, whilst a second party which was not fast enough to be the first to provide such information will at best obtain only partial reduction of its fine which may amount to 5% or 10% of its total turnover.

Immunity from fines can be granted to an undertaking which has been the first to come forward to offer decisive evidence to the Commission of the existence of a cartel. Other type of co-operation can result in proportionate reductions in fines. One of the most recent cases was decided in October 2002 in the case of collusive behaviour between Christie’s and Sotheby’s concerning vendor commissions and other trading conditions. Christie’s was granted full immunity from fines because it was the first to provide crucial evidence enabling the commission to prove the existence of the cartel, whilst Sotheby’s was fined €20.4 million, ie 6% of its worldwide turnover.

The European Commission found Aventis SA, Degussa AG and Nippon Soda Company Limited to have participated in a price-fixing cartel in Methionine, one of the most important amino acids used to compound animal feeds. The defendants were shown to have agreed price targets, implemented price increases and exchanged information on sales, volumes and market shares for the product, through regular meetings both at “summit” and at “managerial” staff levels. Degussa AG and Nippon Soda were fined respectively €118.12 and €9 million. Aventis SA and its subsidiary Aventis Animal Nutrients were granted full immunity from fines under the Commission’s 1996 Leniency Notice, because Aventis SA was the first undertaking to provide the Commission with decisive information identifying the infringements. The Commission stated that otherwise Aventis would have received a fine similar to the one imposed on Degussa. Nippon Soda and Degussa co-operated to a certain extent and were granted appropriate reductions in their fine. However, Degussa received a reduction of only 25% of its fine due to the fact that most of the information it provided was not provided voluntarily and it contested its participation in the cartel prior to mid-1992 and after 1997 despite evidence held on the Commission’s file demonstrating the contrary.

Aventis SA also received total immunity from fines on the same basis in respect of the Vitamins cartels case decided in November 2001 by the Commission, which involved total fines on eight companies of €855.22 million, which is by far the largest total amount of fines imposed in any cartel case, being almost three times higher than the next largest total. However in that case, although Aventis received total immunity in respect of the vitamins A and E cartels because it was the first company to co-operate with the Commission and to provide precise evidence for these two products, a fine of approximately €5 million was, however, imposed on Aventis because of its passive participation in the vitamin D3 cartel on which it provided no information to the Commission.

Both Hoffmann La Roche and BASF, who were found to be the main instigators in the cartels, also co-operated with the Commission at an early stage by providing crucial information on all of the individual vitamins, cartels they were involved in, and on this basis they were granted 50% reductions in their respective fines.

By contrast, in the most recent case involving full immunity from fines, the Methylglucamine cartel case decided on 27 November 2002, the Commission imposed a fine of €2.85 million on the Aventis group (after giving a 40% reduction for Aventis’ co-operation in the investigation) whilst granting full immunity to the only other participant in the cartel, Merck KgaA because it submitted important information to the Commission at a time when the Commission had no knowledge of the cartel. The cartel involved fixing market shares, agreeing price targets and price lists and sharing of the largest customers between the two participating groups. In setting the fine on Aventis, the Commission took into account the small size of the methylglucamine market, methylglucamine is a chemical product used mainly in x-ray analyses and pharmaceutical products, and is stated by the Commission to be the smallest product market for which it has ever adapted a cartel decision.

All of these cases were conducted in accordance with the Commission’s 1996 Leniency Notice. However, a revised Leniency Notice was adopted by the Commission, issued in February 2002. This Leniency Notice, which is on similar lines to the 1996 Notice, will apply in respect of subsequent cartel investigations, giving incentives to cartel members to co-operate at an early stage with the European Commission.