97/84/EC: Commission Decision of 30 October 1996 relating to a proceeding under Article 85 of the EC Treaty (IV/34.503 - Ferry operators - Currency surcharges) (Only the English, French and Dutch texts are authentic)
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P& O European Ferries, Stena Line UK (Stena Sealink), Sea France (SNAT), Brittany Ferries and North Sea Ferries have infringed Article 85 (1) of the EC Treaty by participating from early to mid-October 1992 until 31 December 1992 in a concerted practice by which the leading roll-on roll-off ferry operators in the UK-Continent freight market contacted each other secretly so as to discuss and determine their reaction to the devaluation of sterling in September 1992.
The following fines are hereby imposed on the undertakings named herein in respect of the infringement found in Article 1: (i) P& OEF, a fine of ECU 400 000; (ii) Stena Line UK (Stena Sealink), a fine of ECU 100 000; (iii) Sea France (SNAT), a fine of ECU 60 000; (iv) Brittany Ferries, a fine of ECU 60 000; (v) North Sea Ferries, a fine of ECU 25 000.
The fines shall be paid within three months of the date of notification of this Decision to the following account: Account No 310-0933000-43 Commission of the European Communities Banque Bruxelles-Lambert Agence EuropΓ©enne Rond-Point Schuman/Schumanplein 5 B-1040 Brussels. After three months, interest shall automatically be payable at the rate charged by the European Monetary Institute on its ecu transactions on the first working day of the month in which this Decision was adopted, plus 3,5 percentage points, namely, 7,5 %.
This Decision is addressed to: - P& O European Ferries Channel House Channel View Road Dover GB-Kent CT17 9TJ; - Stena Line UK Charter House Park St. Ashford GB-Kent TN24 8EX; - Sea France 3, rue Ambroise ParΓ© F-75475 Paris Cedex 10; - Brittany Ferries S.A. Port de Bloscon F-29680 Roscoff; - North Sea Ferries Postbus 1123 NL-3180 AC Rozenburg ZH. This Decision is enforceable pursuant to Article 192 of the EC Treaty. Done at Brussels, 30 October 1996. For the Commission Karel VAN MIERT Member of the Commission (1) OJ No L 378, 31. 12. 1986, p. 4. (2) OJ No L 376, 31. 12. 1988, p. 1. (3*) In the published version of the Decision, some information has hereinafter been omitted, pursuant to the provisions of Article 24 of Regulation (EEC) No 4056/86 concerning professional secrecy. (4) OJ No C 82, 19. 3. 1994, p. 7. This agreement is now discontinued. (5) Stena Sealink reply to Article 16 request. (6) P& OEF reply to Article 16 request (7) Document found at the premises of P& OEF. (8) Document found at Sally Line during the Commission investigation. (9) P& OEF reply to Article 16 request. (10) Document found at the premises of Brittany Ferries. (11) Document found at the premises of P& OEF. (12) Document found at the premises of Truckline Ferries. (13) North Sea Ferries reply to Article 16 request. (14) Document found at the premises of P& OEF. (15) Stena Line BV reply to Article 16 request. (16) Document found at the premises of Truckline Ferries. (17) NSF reply to Statement of Objections, point 3.9; P& O reply to Statement of Objections, point 3.10. (18) Judgment of the Court of Justice of 14 July 1972 in Case 48/69, ICI v. Commission, [1972] ECR 619, paragraph 64. (19) Judgment of the Court of Justice of 16 December 1975 in Joined Cases 40-48, 50, 54-56, 111, 113 & 114/73, Suiker Unie et al v. Commission, [1975] ECR 1663, paragraph 174. (20) Commission Decision 86/398/EEC ('Polypropylene`) (OJ No L 230, 18. 8. 1986, p. 1), where activities were found to infringe Article 85, notwithstanding that the target prices agreed between the parties to the infringement were never in fact achieved. (21) OJ No C 207, 18. 7. 1996, p. 4.
(55) Article 85 (1) of the EC Treaty prohibits as incompatible with the Common Market all agreements between 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, and in particular those which directly or indirectly fix purchase or selling prices or any other trading conditions. (56) In order to establish the existence of a concerted practice, it is sufficient that the undertakings knowingly substitute practical cooperation for the risks of competition that might otherwise develop (18). A concerted practice requires direct or indirect contact between the competitors having the object or the effect of influencing their conduct on the market or of disclosing the conduct which they themselves have decided to adopt or contemplate adopting on the market (19). It is clear from the evidence that the parties engaged in direct discussions aimed at settling on a common course of conduct in relation to the introduction of currency surcharges. It is also clear that these discussions took place at senior levels between the parties, with the managing directors in particular being directly involved. (57) In light of the level of contact between the operators and the exchanges of information between them in relation to the imposition of a surcharge, it is clear that the similarities between the surcharges imposed by several of them did not result from the transparency of the relevant market, as some of the operators have suggested. In particular, the information which was known to each of the parties to the infringement about the activities of the other parties, was known, not as a result of consultation with common customers, but instead as a result of direct exchanges of information between them. (58) In order for Article 85 to apply, it is necessary that the agreement or concerted practice between the parties has the object or effect of restricting competition. The clear object of the arrangement between the parties was to bring about the imposition of a common currency surcharge with effect from the same date. There can be no doubt that this arrangement amounted to a concerted practice, the object of which was to fix trading conditions by the parties thereto. (59) The arrangement between the operators clearly falls within Article 85, notwithstanding the difficulties experienced by the operators in actually applying the surcharges announced to their customers (20). While it may be the case that the surcharges were not implemented in precisely the form which had been announced by the operators in mid-October 1992, the result of the operators' cooperation was nevertheless to influence the trading conditions in the relevant market. Effect on trade between Member States (60) Given the importance of the undertakings concerned in the market for freight services by sea between the United Kingdom and northern France, Belgium and The Netherlands, there can be no doubt that the arrangement had at least a potential effect on trade between Member States. (61) A concerted practice between the major suppliers of a particular service will, by its very nature, affect the pattern of trade between Member States which would have emerged in the absence of any such practice. This is especially clear where the service in question is an international transport service. In the present case, the parties concerned account for a large proportion of the service market in question and are established in different Member States. A diminution in competition between them is likely to deflect demand from one to another and thus alter the pattern of trade in that service between Member States. There is also at least a potential secondary effect in that an increase in the price of transport services is likely to depress demand for those services, thereby diminishing trade in goods between the United Kingdom and continental Europe. Conclusion (62) On the basis of the above, the Commission considers that P& O European Ferries, Stena Sealink, SNAT and Brittany Ferries participated in a concerted practice contrary to Article 85 of the EC Treaty by agreeing the amount of a currency surcharge which would be applied to roll-on, roll-off freight services between the United Kingdom and France. (63) The Commission also considers that P& OEF and North Sea Ferries participated in a concerted practice contrary to Article 85 by agreeing the amount of a currency surcharge which would be applied to roll-on, roll-off freight services between the UK and Belgium and the Netherlands. FINES Article 19 (2) of Regulation (EEC) No 4056/86 (64) Under Article 19 (2) of Regulation (EEC) No 4056/86, the Commission may by decision impose on undertakings fines of from ECU 1 000 to ECU 1 million, or a sum in excess thereof but not exceeding 10 % of the turnover in the preceding business year of each of the undertakings participating in the infringement, where either intentionally or negligently they infringe Article 85 (1) of the Treaty. In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement. Gravity (65) A concerted practice by which the most important operators in the market for transporting freight by roll-on, roll-off ferry, have attempted to introduce a uniform increase in price, constitutes a serious breach of Community law. The operators have argued that the surcharges were justified in that they were faced with substantial losses if they did not increase their sterling prices. The Commission does not deny that any operator acting independently was entitled to introduce currency surcharges if it considered it necessary. It is clear from the evidence, however, that P& OEF, Stena Sealink, SNAT, Brittany Ferries, and North Sea Ferries attempted to eliminate uncertainty concerning the actions of their competitors, by agreeing to introduce identical, or almost identical, surcharges. Most of the operators have argued either that the surcharges were not implemented at all or that they were only partially implemented. The Commission can accept that the introduction of surcharges was only partially successful, largely due to the resistance displayed by customers to the introduction of surcharges. The fact that it was not entirely successful does not make it a less serious infringement. A deliberate and manifest infringement of one of the clearest aspects of the prohibition laid down in Article 85 (1) must be regarded as serious. (66) The Commission considers that the ringleaders in the concerted practice were clearly P& OEF and Stena Sealink. The other operators played a relatively minor role. Duration (67) The Commission considers the concerted practice to have begun from 2 October 1992 as far as P& OEF, Sealink and SNAT are concerned, since its origins appear to lie in the meeting held on that date, with Brittany Ferries and North Sea Ferries joining in mid-October 1992. The evidence indicates that the surcharges were applied to smaller customers whose market power was less than their larger competitors, and that they remained in place until 31 December 1992. As stated in paragraph 28, a document found at Stena Sealink states that [. . .] Another document found at Stena Sealink, addressed to SNAT, states [. . .] Documents found at the premises of Sally Line indicate that P& OEF issued letters to its customers on its Felixstowe-Rotterdam/Zeebrugge services on 20 November 1992, in which it advised them of 1993 freight rate increases, and in which it stated: 'To avoid any misunderstanding currency surcharge will continue to apply as per the scale, effective from 1 November 1992, which was announced in our letter 19 October 1992`. Similar letters were issued on 23 November 1992, to customers on its Dover-Calais/Boulogne/Zeebrugge/Ostend services. Another internal P& OEF document indicates that from 23 November 1992, P& OEF [. . .] A further document found at P& OEF states [. . .]. SNAT admits that [. . .] of its [. . .] clients invoiced in sterling paid the surcharges, and says that the surcharges were not applied after 31 December 1992, which implies they were paid up to that date. Similarly, Brittany Ferries states that the surcharge affected 10 % of its haulier clients and that it was applied until 1 January 1993. The Commission is prepared to accept that the infringement ended at the end of 1992. (68) The Commission does not consider that the infringement in this case merits very substantial fines. Although what the companies concerned intended to achieve constituted a serious breach of Community law, in practice the simultaneous introduction of currency surcharges proved to be only partially successful. However, merely symbolic fines would not be appropriate either, given the blatant nature of the infringement. The Commission also considers that P& OEF and Stena Sealink should be fined a greater amount than the other parties in view of the fact that they were the principal organizers of the concerted practice. (69) The Commission acknowledges the fact that Stena Sealink in particular provided a full and frank reply to the Commission's request for information following its unannounced investigations. However, it considers that a reduction of the fine would not be appropriate in this particular case, given that the cooperation came only after the Commission's investigations had brought the infringement to light, and that Stena Sealink was one of the principal organizers of the concerted practice. This is in line with the policy outlined in the Commission's recent notice regarding reductions in fines in cartel cases (21), HAS ADOPTED THIS DECISION:
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