Steel-makers rebuffed in secrecy battle

Date: 19/09/1996

By Chris Johnstone

THE European Court of Justice has been pushed centre stage in a secrecy conflict between the EU's biggest steel-makers and the European Commission.

The Commission this week rejected steel-makers' demands that they be given access to confidential dossiers which the firms say are vital to appeal against sanctions imposed on them for operating a long-running cartel.

Instead, the Commission says it will hand over the sensitive documents to the Court, together with the reasons why they should be kept from the companies.

The case goes to the heart of arguments about how far the Commission can protect highly sensitive and sometimes confidential information while at the same time giving companies a chance to defend themselves.

The Commission has been severely reprimanded by the ECJ in the past both for giving too much and too little information to firms in cartel cases.

In the infamous Stanley Adams case, the Commission revealed the name of a company insider who blew the whistle on a Swiss pharmaceutical firm for its involvement in price fixing. Adams was subsequently sacked from his top job.

More recently, the Commission has had high-profile fines imposed on chemical giants Solvay and ICI cancelled because it failed to respect the firms' right to defend themselves against charges of fixing the price for soda ash and carving up markets.

This July, the Commission agreed new procedures offering an amnesty and reductions in fines to firms which cooperate in uncovering and breaking up illegal cartels.

The latest conflict focuses on attempts by ten of Europe's biggest steel-makers and its industry federation to overturn Commission fines imposed on them for allegedly fixing the price of steel bars.

The Commission banned 17 EU steel producers and distributors from fixing prices and dividing markets, and fined 14 companies a total of 104 million ecu in February 1994.

Arbed, Cockerill-Sambre, Thyssen, Unimetal, Krupp Hoesch, Preussag, British Steel, Aristrain, Ensidesa and industry federation Eurofer have been refused key documents used in the Commission cartel case.

These include letters and reports from Germany's cartel office, the British Office of Fair Trading, the US Department of Commerce and the permanent representation of Luxembourg.

Some of the companies are also seeking to establish why a series of Scandinavian steel-makers were treated more leniently by the Commission, although they took part in price-fixing meetings with Eurofer. They also want to know more about how the fines were calculated.

“We will have to deliver lorry loads of information if the Court goes against us,” said a Commission official this week, pointing out that the dossier on the steel bars cartel included more than 10,000 documents.

A spokesman for Luxembourg steel producer Arbed said it was trying to build up a defence, but this was impossible without all the evidence.

“I would imagine the defence has a basic right to evidence on the charges against you,” he said, adding that Arbed had not yet paid the original Commission fine.

British Steel says it faces a 'Catch 22' situation on access to evidence. “How do we know if it is important if we cannot see it?” asked a spokesman.

Officials from DGIV, the Directorate-General for competition, suspect a series of other big companies will copy the steel-makers and lodge demands for confidential information.

European cement producers' lobby Cembureau is rumoured to be considering such a move, but it denies having taken any steps in its case against the Commission.

The Commission levied record fines totalling 248 million ecu on Cembureau, eight national associations and 33 individual cement companies in 1994 for agreeing not to invade each other's markets and coordinating action to keep out cheap Greek imports.