2001/418/EC: Commission Decision of 7 June 2000 relating to a proceeding pursuant to Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/36.545/F3 — Amino Acids) (Text with EEA relevance) (notified under document number C(2000) 1565)

Article 1

Archer Daniels Midland Company and its European subsidiary Archer Daniels Midland Ingredients Limited, Ajinomoto Company, Incorporated, and its European subsidiary Eurolysine SA, Kyowa Hakko Kogyo Company Limited and its European subsidiary Kyowa Hakko Europe GmbH, Daesang Corporation and its European subsidiary Sewon Europe GmbH, as well as Cheil Jedang Corporation have infringed Article 81(1) of the EC Treaty and Article 53(1) of the EEA Agreement by participating in agreements on prices, sales volumes and the exchange of individual information on sales volumes of synthetic lysine, covering the whole of the EEA.
The duration of the infringement was as follows:
(a) in the case of Archer Daniels Midland Company and Archer Daniels Midland Ingredients Limited from 23 June 1992 to 27 June 1995;
(b) in the case of Ajinomoto Company, Incorporated, and Eurolysine SA from at least July 1990 to 27 June 1995;
(c) in the case of Kyowa Hakko Kogyo Company Limited and Kyowa Hakko Europe GmbH from at least July 1990 to 27 June 1995;
(d) in the case of Daesang Corporation and Sewon Europe GmbH from at least July 1990 to 27 June 1995;
(e) in the case of Cheil Jedang Corporation from 27 August 1992 to 27 June 1995.

Article 2

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

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Article 3

The fines shall be paid by the undertakings named in Article 2 within three months of the date of notification of this Decision to the following account:
Account No 642-0029000-95
of the European Commission with
Banco Bilbao Vizcaya Argentaria (BBVA) SA Avenue des Arts 43 B - 1040 Brussels
Code SWIFT: (BBVABEBB)
After the expiry of that period, interest shall be automatically payable at the interest rate applied by the European Central Bank to its main refinancing operations on the first working day of the month in which this Decision was adopted, plus 3,50 percentage points, namely, 7,25 %.

Article 4

This Decision is addressed to:
(a) Archer Daniels Midland Company 4666 Faries Parkway Decatur , Illinois 62526 USA
(b) Archer Daniels Midland Ingredients Limited Church Motorway
Erith
DA8 1DL United Kingdom
(c) Ajinomoto Company, Incorporated 15-1, Kyobashi Itchome
Chuo-ku
Tokyo 1048315 Japan
(d) Eurolysine SA 153 rue des Courcelles F - 75817 Paris Cedex 17
(e) Kyowa Hakko Kogyo Company Limited 1-6-1 Ohtemachi
Chiyoda-ku,
Tokyo 100 Japan
(f) Kyowa Hakko Europe GmbH Immermannstraße 65C D - 40210 Düsseldorf
(g) Daesang Corporation Daesang Building
96-48 Shinsul-Dong
Dongdaemoon-Ku
Seoul 030-110 Korea
(h) Sewon Europe GmbH Mergenthalerallee 1-3 D - 65760 Eschborn
(i) Cheil Jedang Corporation Standbrook House
4th floor Suite D
2-5 Old Bond Street
London W1X 3TB United Kingdom.
This Decision shall be enforceable pursuant to Article 256 of the EC Treaty.
Done at Brussels, 7 June 2000.
For the Commission
Mario Monti
Member of the Commission
(1) OJ 13, 21.2.1962, p. 204/62.
(2) OJ L 148, 15.6.1999, p. 5.
(3) OJ 127, 20.8.1963, p. 2268/63.
(4) OJ L 354, 30.12.1998, p. 18.
(5) OJ C 207, 18.7.1996, p. 4.
(6) [1988] ECR 5193.
(7) [1970] ECR 661, paragraph 112.
(8) [1980] ECR 3125, paragraph 86.
(9) [1992] ECR II-1155, paragraphs 129 and 144.
(10) [1999] ECR II-347, paragraph 177.
(11) See Judgment in Case T-295/94 Buchmann [1998] ECR II-813, paragraph 121.
(12) [1991] ECR II-1711, paragraph 232.
(13) [1995] ECR II-867, paragraph 60.
(14) See Case T-295/94 Buchmann, loc. cit., at paragraph 131.
(15) [1990] ECR I-45.
(16) [1992] ECR II-1021, paragraph 304.
(17) C-49/92 P, not yet published in the ECR, paragraph 81.
(18) Case T-1/89, [1991] ECR II-867, paragraphs 125 and 126.
(19) Loc. cit., at paragraph 203.
(20) OJ L 319, 29.11.1974, p. 1.
(21) OJ C 9, 14.1.1998, p. 3.
(22) OJ L 230, 18.8.1986, p. 1.
(23) OJ L 239, 14.9.1994, p. 14.
(24) OJ L 243, 19.9.1994, p. 1.
(25) ECR [1991] p. II-867.
(26) ECR [1998] p. II-813..
(27) Joined Cases T-305-94 et seq. PVC [1999] ECR II-931.
(28) Not yet published in the ECR.
(29) See judgment in Case T-308/94 Cascades [1998] ECR II-925, paragraph 177.
(30) "Lysine production, trade and the effects of international price fixing", by Dr John Connor, Staff Paper 98-18, September 1998, Purdue University, p. 35.
(31) In a market structure with relatively few sellers, each large enough to affect market prices and volumes, when acting alone, the problem each firm must solve individually ("the game") is how much to invest in capacity to produce and how much to produce in order to maximise its profit, given the output and respective capacities of its rivals, and the demand for the product. The collective outcome of each firm's uncoordinated effort to solve its respective output problem determines the market price at which the lysine buyers demand is satisfied by the sum of the outputs supplied by rival firms. This is called the Cournot equilibrium output and price. This price amounts to the competitive price in such a market and the lowest price that will be sustainable consistent with uncoordinated profit maximisation.
(32) The Cournot model is expressed as Price = marginal cost/(1-Herfindahl-Hirshman index)/industry price elasticity.
ADM did not have actual figures for the marginal cost but they were estimated based on a multiple regression model of ADM costs of variable inputs used in lysine production and distribution. The figure for the price elasticity was taken from a report by John Connor, "The cost to US animal feeds manufacturers of an alleged price-fixing conspiracy by lysine manufacturers 1992 to 1995" and the response of Frederick R. Warren-Boulton, prepared for US litigation.
(33) Reinhard Selten: "A simple model of imperfect competition where four are few and six are many", International Journal of Game Theory, 2 pp. 141 to 201, reprinted in R. Selten: "Models of Strategic Rationality", Kluwer, Academic Publishers, 1988, pp. 95 to 155.
(34) Louis Phlips, Competition policy: a game-theoretic perspective, Cambridge University Press 1995, Chapter 5, p. 88.
(35) Loc cit., at paragraph 121.
(36) OJ L 109, 27.4.1999, p. 24; see also Commission Decision of 14 October 1998, British Sugar (OJ L 76, 22.3.1999, p. 1).
(37) See paragraph 148 of the Greek Ferries Decision.
(38) Judgment in Case T-305/94 PVC, loc. cit., at paragraph 1162.
(39) [1994] ECR II-289.
(40) Case T-141/94 Thyssen, loc, cit., at paragraph 666.
(41) At page 2 of Kyowa's written reply of 1 February 1999 to the Commission's statement of objections of 29 October 1998.
(42) OJ L 343, 30.12.1994, p. 1, paragraph 46.
(43) Case T-308/94 Cascades, loc. cit., at paragraph 260.
(44) Notice on cooperation between national courts and the Commission in applying Articles 85 and 86 of the EEC Treaty, OJ C 39, 13.2.1993, p. 6.
(45) Case T-141/94 Thyssen, loc. cit., at paragraph 628.
(46) Judgment in Case T-354/94 Stora [1998] ECR II-2111, paragraph 79.
(47) Judgment in Case T-352/94 Mo Och Domsjö [1998] ECR II-1989, paragraph 87.
(48) Judgment in Cases 29/83 and 30/83 Rheinzink [1984] ECR 1679, paragraph 9.
(49) Case T-305/94 PVC, loc. cit., at paragraph 953.
Outline
I. THE FACTS
A. SUBJECT OF PROCEEDINGS
B. THE UNDERTAKINGS AND THE ASSOCIATION CONCERNED
1. Archer Daniels Midland Company
2. Ajinomoto Company, Incorporated
3. Kyowa Hakko Kogyo Company
4. Daesang Corporation
5. Cheil Jedang Corporation
6. Fefana
C. THE PRODUCT
D. THE MARKET FOR LYSINE
1. Supply side
(a) Production
(b) Distribution
2. Demand side
3. Market information
(a) Factors influencing the determination of lysine prices
(b) Average monthly lysine prices
(c) Annual lysine sales
E. DESCRIPTION OF EVENTS
1. Asian/European cartel
(a) The beginning
(b) Meeting of 18 February 1991
(c) Meeting of 12 March 1991 in Tokyo
(d) Meeting of 4 July 1991 in Tokyo
(e) Follow-up
2. Global cartel
(a) Background
(b) Meeting of June 23, 1992 in Mexico
- Follow-up
(c) Meeting of 1 October 1992 in Paris
- Follow-up
(d) Meeting of 24 June 1993 in Vancouver
- Follow-up
(e) Meeting of 5 October 1993 in Paris
- Follow-up
(f) Meeting of 8 December 1993 in Tokyo
- Follow-up
(g) Meeting of 10 March 1994 in Honolulu
- Follow-up
(h) Meeting of 19 May 1994 in Paris
- Follow-up
(i) Meeting of 23 August 1994 in Sapporo
- Follow-up
(j) Meeting of 26 October 1994 in Zurich
- Follow-up
(k) Meeting of 18 January 1995 in Atlanta
- Follow-up
(l) Meeting of 21 April 1995 in Hong Kong
- Follow-up
F. THE COMMISSION'S PROCEDURE
G. THE LYSINE INVESTIGATION IN THE USA
H. THE LYSINE INVESTIGATION IN CANADA
II. ASSESSMENT
A. JURISDICTION
B. ARTICLE 81 OF THE EC TREATY AND ARTICLE 53 OF THE EEA AGREEMENT
1. Article 81(1) of the EC Treaty and Article 53(1) of the EEA Agreement
(a) Undertakings
(b) Agreements
- Price agreements
- Agreements on quantities
- Agreement on the exchange of information on sales quantity
(c) Object of the agreements
(d) Effect on trade between Member States of the Community and EEA countries
2. Article 81(3) of the EC Treaty and Article 53(3) of the EEA Agreement
3. Single continuing infringement
C. LIMITATION PERIOD
D. FINES IMPOSED PURSUANT TO ARTICLE 15(2)(a) OF REGULATION NO 17
1. Infringement of the competition rules either intentionally or negligently
2. The amount of the fines
(a) The basic amount
- Gravity
- Nature of the infringement
- The actual impact of the infringement on the lysine market in the EEA
- The size of the relevant geographic market
- The Commission's conclusion on gravity
- Differential treatment
- Duration
- The basic amount
(b) Aggravating circumstances
- Role of leader in the infringement
(c) Attenuating circumstances
- An exclusively passive role in the infringement
- Non-implementation in practice of the offending agreements
- Termination of the infringement as soon as a public authority intervenes
- Other attenuating circumstances
(d) Application of the Commission's notice of 18 July 1996 on the non-imposition or reduction of fines in cartel cases
- Preliminary remarks
- Non-imposition of a fine or a very substantial reduction in its amount
- Substantial reduction in the fine
- Significant reduction in the fine
(e) Adjustments
(f) Liability for the infringement
(g) The amounts of the fines imposed in the present proceedings

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