Christie's and Sotheby's concluded a deal on September 22nd 2000 with U.S justice after both auction houses were accused of illicit agreement. They agreed to pay off US $ 512 million to settle the case with 120,000 buyers who had been penalised by their sharing of the art market during five years. Alfred Taubman, the head of Sotheby's, might thus be forced to sell his shares.
The managerial boards of Christie's and Sotheby's certainly heaved a sigh of relief after the conclusion of the deal.
Both auction houses had been accused of having concluded a secret agreement that penalised many buyers and sellers. Their heads were due to appear in court in February 2001 and faced a $ 1 billion fine, according to the counsels representing the injured party. Such a sanction would have seriously penalised Christie's and Sotheby's especially as some nasty disclosures were expected during the forthcoming trial.
The fine represents between four and five years of Christie's profits and its unique shareholder, the Artemis holding headed by François Pinault, will meet it. This represents a formidable financial sacrifice but Christie's, which had obtained immunity from U.S justice in exchange for its cooperation, will now feel quite relieved while facing its future challenges. All the more, the turmoil that resulted from that justice action did not rock the auction house on its bases since all members of its managerial team, excepted its Christopher Davidge, its general manager who resigned in 1999, have remained in command.
Already Christie's has reinforced its supremacy on the international art market gaining a 53% share in 2000 against 47% for Sotheby's.
Things may look different for Sotheby's, which has been much affected by this case. The American-owned auction house has incurred huge expenses for the creation of its Website and its profits for the first six months of the year 2000 do not exceed $ 1 million.
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