• The European Commission fines 16 firms 290 million Euros for industrial bags cartel
  • December 21, 2005
  • Law Firm: Watson, Farley & Williams (New York) LLP - New York Office
  • On 30 November 2005, the European Commission ("EC") announced that it had fined 16 firms a total of ¿ 290.71 million for operating an illegal cartel in the plastic industrial bags market. The investigation was begun as a result of British Polythene Industries ("BPI") providing the Commission with evidence of a cartel. They in turn enjoyed full immunity. After a surprise inspection of producers in June 2002, the Commission investigated the firms. It concluded that the 16 firms agreed amongst themselves prices and sales quotas by geographical area, shared the orders of large customers and organised collusive bidding to the detriment of competition, their customers and consumers. The cartel participants were found to have infringed Article 81(1) of the EC Treaty. The Commission has invited any firm or person affected as a result of the cartel to bring the matter before the courts of the Member States and seek damages.

    So why don't more "victims" of anti-competitive activity seek compensation? The technical and procedural problems are well documented and entrenched. What has been missing, perhaps, is the political will to clear a path. That might finally be changing. Neelie Kroes the European Commissioner in charge of Competition Policy recently spoke of the potential benefits of private action damages claims in case of violation of the competition rules. She referred to it as "direct justice," which allows the victims of illegal anticompetitive behaviour to be compensated for the loss they have suffered. This in turn she suggests would promote a strong competition culture. She indicated that the Commission's Green Paper on facilitating damages actions for breach of Article 81 and Article 82 would cover access to evidence for plaintiffs, the financial risk assessment of the plaintiff, the possibility to bring collective or representative damages actions, whether the passing on defence should be admitted, and whether or not there is a need to prove intent or negligence on top of proving the infringement. It is a move in the right direction as in the past the obstacles for taking such actions was the uncertainty as to ability to prove infringement, result of an action in court and above all costs. Real reforms, however, are some time off. Too late, perhaps, to help those customers that have been paying over the odds for industrial bags in the recent past, But coming soon, at a Court near you........