Sotheby's, one of the world's two leading auction houses, was yesterday fined almost $20 million by the European Commission for operating a massive illegal price-fixing cartel with its arch-rival, Christie's, for most of the 1990s.
The most galling outcome for Sotheby's, since the origin of the price-fixing was an attempt by the houses in the early 1990s to end their cut-throat rivalry, is that Christie's has escaped with a rap on the knuckles.
It mirrors the outcome of earlier court cases in the US - where price-fixing is a criminal offence - when Christie's escaped relatively lightly and Sotheby's saw its former chairman, Mr Alfred Taubman, jailed and fined $8.3 million. His opposite number at Christie's at the time, Sir Anthony Tennant, refused to go to the US for the trial, and could not be extradited, since price-fixing is not a criminal offence in the UK.
Yesterday Christie's was heavily censured by the Commission but escaped without a fine as a reward for blowing the whistle on the cartel and giving evidence.
It is a measure of the massive scale of the international art trade that the fine represents only 6 per cent of Sotheby's annual turnover. The buyer's premium on just one staggering sale in July, when a rediscovered masterpiece by Rubens, The Massacre of the Innocents, sold at Sotheby's in London for $76.7 million, a world record for a work of art, would cover well over half of it.
Sotheby's, which issued the briefest and blandest of official statements last night, had been braced for an even heavier fine. A Christie's spokeswoman said: "We aren't commenting on the decision itself, but we're pleased that it brings this chapter in the history of the art market closer to a conclusion."
Both houses know the story may be far from over. Lawyers have threatened legal action on behalf of clients, including dealers and private collectors, who believe they lost millions through the collusion.
The European Commission began investigating the $3.8 billion a year art auction market in 2000 but it was only yesterday that it concluded the two companies were guilty of "a very serious violation" of EU competition rules. It said: "The Commission has concluded that Sotheby's and Christie's entered into an anti-competitive cartel agreement in the course of 1993, which lasted until early 2000.
"The purpose of the cartel agreement was to reduce fierce competition between the two leading auction houses that had developed during the 1980s and early 1990s." Brussels said the scam went right to the top in both firms and extended to almost every part of the auction business. An agreement had been struck between the two not to offer discounts and to keep prices high and fixed.
The Commission denied Christie's had got off lightly. "I understand your discomfort that companies can get away with murder," a spokeswoman said. "But what matters for the Commission is that the cartel is eradicated and that companies behave themselves and no longer set prices." - (Guardian Service)