European Commission drops paper cartel investigation

Competition authorities of the European Commission have concluded their investigations into a possible price fixing cartel among paper manufacturers. The investigation was launched on the basis of information provided by the Finnish paper company UPM.
      On Thursday the company said that the investigations into newsprint, magazine paper, and labelstock had been dropped. Antitrust investigations concerning fine paper ended already in August.
      Stora Enso and M-real also gave out press releases on the closing of the investigations.
     
The process is not completely over, however. UPM noted that competition authorities in different countries are continuing their investigations into alleged violations of competition rules in different products produced by the company.
      Juha Mäkelä, head of legal affairs at UPM, does not go into detail on the matter. He notes that officials in the United States have called off their investigations concerning labelstock, but are still loking into allegations involving magazine paper.
     Mäkelä added that investigations are also going on in Canada as well as "other countries", which he did not specify. In Finland, officials are examining practices of wood acquisition.
      The EU cartel investigation had been launched in January 2004 after UPM contacted authorities. The company said that it wanted to observe "good administrative practice". However, it also wanted to protect itself against possible penalties for antitrust violations. Such protection is usually granted to whistle-blowers whose information leads to the cartels being exposed.
     
The process cost UPM’s former CEO Juha Niemelä his job. Niemelä, who was contacted in Vietnam where he was on holiday, said that the EU’s decision was something that he had expected.
      He described his own feelings as "very relieved". He also said that he was angry at the Board of Directors of his former employer which, he said, had taken action on the basis of insufficient information.
      "Not all of the members of the board were sufficiently well acquainted with the matter, which had very serious consequences", Niemelä says.
      He also said that he wonders if the Chairman of the Board, Vesa Vainio, can stay in his post "after such a serious mistake".
      Vainio himself notes that the process was started at the initiative of American officials. "That is why everything had to be cleared up. The decision was supposed to have been a quick one, because the first to act gets immunity from prosecution."
      Vainio also said that the decision of the UPM Board was unanimous, and all members had read through all of the material.
      "The shareholders’ meeting choses the board, and the board chooses its chairman", Vainio pointed out, commenting on his own position.


Previously in HS International Edition:
  Former UPM CEO Niemelä: Cartel affair linked with resignation (5.9.2006)
  Victory for Finnish paper manufacturers in cartel dispute (10.8.2006)
  Paper maker UPM gets massive fine for leading role in industrial bag cartel (1.12.2005)
  Document reveals strict conditions for severance package for ex-UPM CEO Juha Niemelä (31.5.2005)
  Minister Pekkarinen sees paper cartel allegations as blow to Finnish reputation (28.5.2004)
  Police raid offices of numerous forest companies over cartel suspicions (26.5.2004)
  Juha Niemelä unexpectedly resigns as CEO of UPM-Kymmene (30.1.2004)