Market Court imposes heavy fines on forestry companies for illegal price fixing in purchasing roundwood

The Market Court has sentenced Stora Enso and Metsäliitto Cooperative to hefty fines for illegal price fixing of raw timber in 1997-2004. The Court pronounced its verdict on Thursday.
      Stora Enso was ordered to pay EUR 30 million and Metsäliitto EUR 21 million in infringement fines.
      UPM-Kymmene, the third party in the national price cooperation and exchange of information in the purchase of timber, avoided sanctions because it acted as the whistle-blower and informed the Finnish Competition Authority (FCA) about the existence of the cartel.
      The Market Court ruling may not remain a definitive one, however, as more than likely at least Stora Enso will appeal to the Supreme Administrative Court. Stora Enso has denied all of the FCA allegations.
     
FCA senior research officer Saara Vahvaselkä, who acted as the main investigator in the case, is pleased with the Market Court decision.
      The imposed competition infringement fines were identical to those proposed by the FCA. “We have believed in our cause. This was a victory in our fight against illegal cartels”, says Vahvaselkä.
      According to Vahvaselkä, those from whom timber was bought now have a chance to seek compensation for the loss of income.
      In practice this may nevertheless be difficult, for the FCA did not assess how much the formation of a cartel had benefited the buyers in financial terms.
      In connection with the case the forestry companies’ representatives pointed out that the sellers, too, had formed cartels.
      The FCA has more recently launched an investigation into the behaviour of the organisations representing the timber traders.
     
Stora Enso legal counsel Erkki Autio is dissatisfied with the Market Court ruling.
      “It was a disappointment and the imposed fine is high. The first impression is that more facts would have been needed to justify the ruling. The decision was reached on flimsy grounds”, says Autio.
      Metsäliitto lawyer Esa Kaikkonen says that the cooperative believed in another kind of result. “The ruling does not correspond to our notion of what went on”, Kaikkonen says.
      According to Market Court chief judge Kimmo Mikkola, what was aggravating was the fact that this was the second time the forestry companies were caught in conducting illegal practices.
      At the beginning of the decade UPM, Stora Enso, and Metsäliitto were sentenced to EUR half a million fines each on the so-called "Mikkeli case", concerning a regional wood-purchasing cartel.
      Mikkola also points out that the Supreme Administrative Court’s September ruling in the so-called asphalt-cartel case influenced the Market Court’s decision.
      The Market Court had ordered the asphalt companies to pay EUR 20 million in fines. The Supreme Administrative Court, however, raised the fines to the seven involved companies to a total of EUR 83 million.


Previously in HS International Edition:
  Stora Enso subsidiary faces price fixing charges in USA (14.12.2006)
  Stora Enso accuses rival UPM of pressuring office employees during cartel investigation (21.1.2008)
  Victory for Finnish paper manufacturers in cartel dispute (10.8.2006)
  Competition Authority accuses Stora Enso and Metsäliitto of price fixing (22.12.2006)
  Paper maker UPM gets massive fine for leading role in industrial bag cartel (1.12.2005)

See also:
  Construction company Lemminkäinen handed massive fines for running illegal asphalt cartel (30.9.2009)
  European Commission drops paper cartel investigation (17.11.2006)

Links:
  Finnish Competition Authority press release
  Metsäliitto press release
  Stora Enso press release