CARTELS : COURT UPHOLDS FINES ON ITALIAN TOBACCO COMPANIES.

The judgement handed down, on 9 September, by the EU General Court in a case concerning a cartel of Italian companies on the tobacco market is important because it upholds the first decision in which the European Commission, after granting conditional immunity at the start of its procedure, did not grant final immunity from fines upon conclusion of its procedure to the undertaking that was the first to reveal the existence of a cartel in the context of the leniency programme.

The court therefore confirmed the Commission's decision imposing a fine of 30 million on Deltafina, which initially could have been granted immunity (Case T-12/06).

In 2005, the Commission slapped fines of 56 million on several undertakings - including Deltafina - for their participation, from 1995 to 2002, in a horizontal cartel on the Italian raw tobacco market. The purpose of the cartel was, inter alia, collusion on prices and the allocation of suppliers.

Deltafina was the first company to reveal the cartel's existence to the Commission under the leniency programme established in the Commission's 2002 leniency notice. Accordingly, at the start of the administrative procedure, the Commission granted it conditional immunity. Later, however, in the decision in question, the EU executive found that Deltafina had infringed the obligation to cooperate incumbent on it as an applicant for immunity. At a meeting with its competitors, Deltafina disclosed voluntarily and without informing the Commission that it had applied for immunity, before the Commission had had the opportunity to carry out its investigation of the cartel in question. Given those circumstances, the Commission concluded at the end of the administrative procedure that Deltafina could not be granted immunity from fines. It nevertheless granted a 50% reduction in its fine. The Commission thus ordered Deltafina, jointly and severally with its parent company Universal Corp., to pay a fine of 30 million.

In its appeal before the General Court, Deltafina disputed the lawfulness of the Commission's decision.

In its...