Auction house Sotheby’s has been fined $20 million, about 6% of its worldwide turnover, by the European Commission for fixing fees with rival Christie’s, the Commission said in a press release.
After a two-year investigation, the Commission decided the auction houses breached European Union competition rules by colluding with Christie’s to fix commission fees between 1993 and early 2000. The fix is said to have cost art sellers $450 million in inflated fees.
Christie’s escaped a fine because it was the first to provide evidence, which the Commission said enabled it to prove the existence of the cartel.
“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,” the Commission said in its statement.
Sotheby’s former chairman Alfred Trauma, 68, is in prison in the U.S. after being found guilty of price-fixing in December.
He was fined $7.5 million and went to jail for a year and a day in August.
His Christie’s counterpart Anthony Pennant, accused of masterminding the other end of an arrangement, lives in Hampshire, England, and has refused to go to the U.S. to face trial.
He cannot be extradited on anti-trust charges.
The ECU investigation began in January 2000 when Christie’s approached the U.S. Department of Justice and the European Commission offering evidence of the cartel between itself and Sotheby’s.
ECU rules ban cartels or other “damaging” business practices.
However, the Commission offers partial or full immunity from fines for companies giving “significant” information on price-fixing, market-sharing or other anti-competitive agreements.
The Commission said earlier this year that it was investigating a cartel clearly sanctioned at the highest level, designed to end fierce competition between the arch rivals.
A 50-page dossier said the cartel ran from 1993 to early 2000 “when the parties appear to have recovered their freedom to set prices independently.”
It said the special arrangements consisted of an increase in the commission both auction houses charged their clients, as well as collusion over advances paid to sellers, guarantees given for auction results and general payment conditions.
Trauma was named as the mastermind behind the scheme after a U.S. Government investigation, which lasted four years.