Leniency Programme helps for the first time to counter price cartels in paper wholesale sector

The Bundeskartellamt has served written charges on seven companies and high-ranking persons in the paper wholesale sector on suspicion of their involvement in illegal price agreements. Those concerned, who face fines running into the millions, now have an opportunity to answer the accusations.

In April 2000 the Bundeskartellamt conducted a nationwide search of the premises of companies in the paper wholesale sector. According to its findings it can be assumed that a nationwide cartel existed, including approximately a dozen regional cartels.  The price agreements on paper for picture printing, offset and carbonless paper covered a major section of products in the sector. 

It emerged that illegal price agreements were in practice at least from the beginning of 1996 up to the Bundeskartellamt’s search operation in April 2000. During the complicated and time-consuming investigations several companies were attracted by the benefits of the leniency programme and were prepared to cooperate with the Bundeskartellamt.  They have made a considerable contribution to uncovering both the structure of the nationwide cartel as well as regional cartels.

The President of the Bundeskartellamt, Dr. Ulf Böge stated that he was satisfied with the results of the research conducted: “In these proceedings we probably had our first major case for applying the leniency programme. The Bundeskartellamt’s approach in offering cartel members an incentive to leave a cartel, is the right one.  Cartel agreements between companies on the setting of prices is highly damaging to society. Setting artificially excessive prices for products causes great detriment to the consumer. If the suspicion of price agreements, further substantiated in the evaluation of the documents seized, is confirmed the persons concerned can expect appreciable fines. Cartel agreements cannot be allowed to and shall not pay off in Germany.”

Background:

According to Section 81 of the Act against Restraints of Competition (Competition Law) violations of the ban on cartels can be punished as administrative offences by fines of up to 500,000 Euro and in excess of this amount up to three times the additional proceeds obtained as a result of the illegal agreement. 

The Bundeskartellamt has discretionary powers in setting fines of this kind. When exercising these powers it must also consider that public interest in liquidating a cartel may be greater than imposing penalties on an individual cartel member.

Subsequently according to the leniency programme of the Bundeskartellamt the level of the fine for members of an illegal cartel can be considerably reduced at the discretion of the Bundeskartellamt if witnesses to the cartel have of their own accord made a decisive contribution to uncovering the illegal agreement. The Bundeskartellamt can waive in full the imposition of a fine on the first company which agrees to fully cooperate with it from an early stage in the proceedings.

The Leniency Programme of the Bundeskartellamt is available at www.bundeskartellamt.de.