Sotheby's fined £12m for price-fixing
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Your support makes all the difference.Sotheby's was today fined £12 million by the European Commission for rigging the art market in collusion with rival Christie's.
Christie's escaped a fine because it provided the Commission with the crucial evidence to prove the operation of a cartel between the world's two leading fine art houses in a scam which defrauded sellers out of £290 million.
The fine represents 6 per cent of the company's annual turnover.
The European Commissioner in charge of EU competition policy, Mario Monti, said: "This case again shows that illegal cartels can appear in any sector, from basic industries to high-profile service markets such as the one at hand."
He said Sotheby's and Christie's had breached EU competition rules, acting illegally to operate a price-fixing cartel to set client charges in a market in which both art houses hold a 90 per cent share between them.
The Commissioner said the purpose of the cartel was to reduce the fierce competition which had built up during the 1980s and early 1990s between the two leading players in the field.
The most important aspect of the illegal agreement involved increasing the commission paid by sellers at auctions - the so-called "vendor's commission".
But the cartel also involved fixing other trading conditions, including advances paid to sellers and guarantees given for auction results.
The Commission said the collusion was set at the highest level in both companies.
The former Sotheby's chairman Alfred Taubman has already been jailed in America for a year after being found guilty of price-fixing. He was fined £4.7 million.
His Christie's counterpart at the time, Sir Anthony Tennant, also named in today's Commission ruling, is now living in Andover, Hants, having refused to go to America to stand trial. He cannot be extradited on the anti-trust charges he faces.
The Commission said these two men "entered into secretive discussions at their respective private residences in London and, or, New York".
The first high level meetings in 1993 were followed by regular gatherings and price-fixing meetings between the companies' chief executives at the time - D.D. Brooks of Sotheby's, and Christopher Davidge of Christie's.
The Commission investigation into the scam began in January 2000 when Christie's first approached the US Department of Justice and the Brussels authorities offering evidence of the cartel.
One motive for spilling the beans was the prospect of leniency in both jurisdictions - which paid off today when no fine at all was imposed on Christie's.
The Commission said today that the company had received "full leniency" under the terms of a 1996 rule offering full or partial immunity from fines for companies providing decisive information on price-fixing or market sharing.
The fine imposed on Sotheby's, meanwhile, includes a 40 per cent reduction in acknowledgement of its co-operation in the investigation.
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