## Facts

- The case (commonly called *Wood Pulp II*) consolidated multiple annulment actions brought by Canadian, Finnish, and U.S. wood pulp producers, along with two trade associations, against the Commission of the European Communities.
- Wood pulp is a key input for paper production. The applicants, established outside the European Community (EC), sold wood pulp to purchasers established within the EC, competing for orders in the EC market.
- The Commission investigated pricing conduct relating to wood pulp exported into the EC, focusing on parallel and coordinated pricing behavior, including the use of public price announcements to the market and subsequent sales to EC customers at prices the Commission considered coordinated.
- On 19 December 1984 the Commission adopted Decision 85/202/EEC (Wood Pulp), finding that the applicants had infringed Article 85 EEC (now Article 101 TFEU) by engaging in concerted actions concerning prices for wood pulp sold into the EC.
- The Commission ordered the undertakings to bring the infringement to an end and imposed fines on most of them.
- The applicants sought annulment under the then Article 173 EEC, challenging (among other matters) the EC’s jurisdiction because the undertakings were located outside the EC and parts of the alleged coordination occurred outside EC territory.
- Finnish applicants argued that the EC–Finland Free Trade Agreement (FTA) displaced or limited application of Articles 85 and 86 EEC to Finnish undertakings.
- One addressee, KEA (an American export association registered under the Webb-Pomerene Act), challenged the decision as applied to it; the case raised the question whether the Commission’s findings regarding KEA could stand.

## Issues

1. Whether Article 85 EEC applied to coordinated pricing by undertakings established outside the EC when the coordinated prices were put into effect through sales to purchasers in the EC.
2. Whether applying Article 85 EEC to that conduct violated public international law principles of territoriality and non-intervention.
3. Whether the EC–Finland Free Trade Agreement prevented application of Articles 85 and 86 EEC to Finnish wood pulp producers.
4. Whether the Commission decision was valid insofar as it concerned KEA.

## Decision

- The Court held that Article 85 EEC could apply to non-EC producers where they sold directly to purchasers in the EC, competed for orders in the common market, and put coordinated pricing into effect through actual sales in the EC at coordinated prices.
- The Court rejected objections based on public international law, holding that the EC’s application of its competition rules in these circumstances was covered by the territoriality principle because the decisive factor is where a concerted practice is implemented, not where it is formed.
- The Court held that the EC–Finland Free Trade Agreement did not bar application of Articles 85 and 86 EEC to Finnish undertakings.
- The Court annulled the Commission decision insofar as it concerned KEA, while otherwise upholding the Commission’s approach to jurisdiction and the application of Article 85 to the remaining applicants (subject to the Court’s review of the decision’s specific findings).

## Legal Principles

- For Article 85 EEC, the key territorial link is implementation of an agreement or concerted practice in the common market; the place where the arrangement was concluded is not determinative.
- Non-EC undertakings may fall within Article 85 EEC when they compete for orders from EC customers and put coordinated pricing into effect through sales to purchasers established in the EC.
- It is not necessary, for jurisdiction under Article 85 EEC, that non-EC producers act through subsidiaries, agents, or branches within the EC when they sell directly to EC purchasers and implement coordinated prices through those sales.
- Applying EC competition law to restrictive conduct implemented through EC sales is consistent with the territoriality principle recognized in public international law and does not, by itself, amount to unlawful interference.
- Where a non-member State’s law authorizes export cartels but does not require them, the absence of a direct conflict of legal obligations supports applying EC competition rules to conduct implemented in the EC.
- Competition provisions in the EC–Finland FTA did not displace or limit the direct application of Articles 85 and 86 EEC to Finnish producers in the circumstances of this case.

## Conclusion

The Court of Justice confirmed that Article 85 EEC could reach coordinated pricing by foreign wood pulp producers because the restrictive conduct was implemented in the EC through sales to EC purchasers, rejected challenges based on public international law and the EC–Finland FTA, and annulled the Commission’s decision only insofar as it concerned KEA.


A. Ahlström Osakeyhtiö v. Comm’n, Joined Cases 89/85, 104/85, 114/85, 116/85, 117/85 & 125–129/85, 1988 E.C.R. 5193.