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Wednesday, 30 October, 2002, 12:19 GMT
Sotheby's fined 13m for price fixing
Auction at Sotheby's in Paris
The EU says the cartel was in place for seven years
Sotheby's auction house has been fined more than 20 million euros (13m) by the European Union for operating a price-fixing cartel during the 1990s.

But rival Christie's escaped a fine, despite being implicated, because it "was the first to provide crucial evidence", said the European Commission.

Former Sotheby's chairman Alfred Taubman
Former Sotheby's chief Alfred Taubman was found guilty of conspiracy
The pair handle 90% of the auction market and have been under investigation by the commission for breaking fair trade rules.

They were accused of inflating commission fees and defrauding art sellers out of 290m.

It was a "highly damaging cartel", a commission spokeswoman 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," said competition commissioner Mario Monti.

The fine of 20.4m euros represents 6% of the annual Sotheby's turnover. The European Commission had the power to impose fines of up to 10%.

The ruling followed a $45m (30m) fine on Sotheby's after a separate United States investigation.

Sotheby's auction house
Sotheby's and Christie's were sued by customers
Christie's had immunity in that case after coming forward with information.

Sotheby's former chairman, Alfred Taubman, was jailed for one year and fined another $7.5m (5m) after the US investigation.

A preliminary European Commission report, released in April, accused Sotheby's and Christie's of entering into an anti-competitive cartel agreement in 1993.

The auction houses were accused of agreeing to raise commission paid by clients and colluding over sellers' advances, auction result guarantees and general payment conditions.

The report said the cartel was sanctioned at the highest level and designed to end fierce competition between the two auction houses.

Rich clients

Mr Taubman and Christie's chairman Sir Anthony Tennant are said to have met a dozen times from 1993 through 1996 in London and New York.

It was at these meetings that the two men allegedly agreed to fix the commissions they charged their clients, who included some of the world's richest people.

The arrangement ended early in 2000, it said, "when the parties appear to have recovered their freedom to set prices independently".

The commission began its inquiry after Christie's approached both the US Department of Justice and the European Commission with proof of a cartel between itself and Sotheby's.

Although Christie's has avoided fines from the authorities, it has agreed to share the costs of a $537m (345m) settlement of lawsuits brought by customers.

Mr Tennant has refused to go to the US for trial and cannot be extradited on anti-trust charges.

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The BBC's Andrew North
"The latest in a series of expensive judgements against the 250 year old company"
See also:

29 Apr 02 | Americas
23 Apr 02 | Americas
19 Apr 02 | Business
05 Dec 01 | Americas
21 Nov 01 | Americas
03 Jun 02 | Business
11 Oct 02 | Entertainment
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