Following a request for leniency from seven wallpaper producers
for engaging in anticompetitive conduct, the French Competition
Authority (FCA) recently sanctioned them in the amount of 5.27
million euros (US$6.6 million).
The anticompetitive information exchange took place between
wallpaper suppliers when they were asked by a wholesaler to create
a common wallpaper catalog, according to the FCA. The competing
suppliers met several times, either formally or via telephone
conferences, to discuss commercially sensitive information. The
type of information disclosed not only concerned commercial terms
of the catalog, but also future market behavior such as foreseeable
tariff trends and prospective data to fix prices. The FCA regarded
these practices as restrictions of competition by object, but noted
that it was occasional and unsophisticated, which had a mitigating
effect on the outcome.
The legality of any arrangement depends not only on the nature
of the information exchanged but also on the context in which it is
exchanged, notably the market characteristics, the FCA stated.
Thus, the agency held that the extent of information sharing,
economic features of the wallpaper sector and structural
consequences of the anticompetitive behavior caused a certain, but
limited, anti-competitive harm to the market.
Accordingly, the FCA determined the base fine to be 10 percent
of the sales value, which amounts to 16.7 million euros (US$19.3
million). Various elements were taken into consideration by the FCA
to reduce the fine, including: 1) participation of the undertakings
in some or all of the anti-competitive practices; 2) the fact that
some undertakings were only selling a single product; 3) the
ability to pay the fine; and 4) the rapidly declining wallpaper
market. Thus, the total amount of the fine was reduced to 5.27
million euros (US$6.6 million).
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