umraniye escort pendik escort
maderba.com
implant
olabahis
canli poker siteleri meritslot oleybet giris adresi betgaranti
escort antalya
istanbul escort
sirinevler escort
antalya eskort bayan
brazzers
sikis
Short Reads

Walking a thin line: cooperation and collusion

Walking a thin line: cooperation and collusion

Walking a thin line: cooperation and collusion

05.12.2019 NL law

Buying groups are under attack from competition authorities across Europe. Joint buying arrangements are aimed at strengthening participating companies' bargaining power towards their trading partners, usually resulting in lower prices or better quality for consumers. However, these buying arrangements must stay on the right side of the line between legitimate cooperation and anticompetitive collusion. Competition concerns may arise if the participating companies have a significant degree of market power or coordinate their conduct.

 

The European Commission and various national competition authorities are currently investigating several buying groups, as well as a number of potential buying cartels. Companies are well-advised to invite their procurement teams to their competition compliance training and to double-check whether their buying arrangements stay on the right side of the line.

Competition investigations into buying groups

The European Commission recently raided the premises of two French retail groups (Casino and Intermarché) as part of its investigation into whether these groups went beyond the purpose of their purchasing alliance and possibly colluded on consumer pricing and store networks. According to the Commission, the growing number of alliances in the food retail sector, alongside changes in alliance partners, have increased the risk of collusion.

The Commission's competition concerns about buying alliances seem to be shared by more European competition authorities. The Belgian competition authority is currently investigating a purchasing partnership concluded last year between Carrefour and Provera. According to a newspaper, the investigation was opened after suppliers complained about being forced to grant discounts to the purchasing alliance without any consideration. Similarly, the Czech competition authority has imposed a fine of CZK 164 million (approx. EUR 6.4 million) on the Rewe retail chains and Rewe Buying Group for abusing their significant market power by squeezing bonuses out of their suppliers. The German competition authority prevented a planned merger between purchasing cooperations in the furniture sector for fear of the new entity becoming too powerful, to the detriment of consumers and suppliers. The French competition authority is taking a closer look at the competitive impact of various supermarket purchasing alliances on the relevant markets for consumers and suppliers, while the Norwegian competition authority recently conducted a dawn raid in the grocery sector following its inquiry into purchasing conditions for grocery chains.

Buying cartels

Besides intensified scrutiny of joint buying arrangements, the number of investigations into buying cartels also appears to be on the increase. The Commission's investigations into potential anticompetitive conduct related to the purchasing of the chemical products styrene monomer and ethylene are still ongoing.

The Dutch competition authority (the ACM) has conducted dawn raids at various traders to investigate their involvement in a potential purchasing cartel in the agricultural sector. The ACM suspects the traders of coordinating the prices paid to farmers for their agricultural products. The investigation is part of a wider inquiry into potential anti-competitive conduct in the agricultural sector.

The German competition authority imposed fines totalling EUR 100 million on car manufacturers BMW, Daimler and Volkswagen for their alleged involvement in a steel purchasing cartel. According to the German competition authority, the car manufacturers regularly met with steel producers, forging companies and large systems suppliers to agree on uniform scrap and alloy surcharges. These surcharges represent a significant part of the long steel purchase prices. In contrast to more 'traditional' buying cartels, in this case both the purchasers and the suppliers were involved in the purchase price-fixing. However, the German competition authority opted to terminate its investigations against the suppliers "for discretionary reasons".

Fines imposed for participating in a buying cartel can be substantial, as underlined by the General Court's recent rulings in the alleged car battery recycling cartel. The General Court reduced the fine imposed on one of the cartel participants, because the Commission, inter alia, failed to prove that the company had participated in the cartel for its entire duration. However, the Commission's novel fining approach in regard of the buying cartel was upheld. The Commission had departed from its general fining methodology and took account of the value of purchases, instead of sales, to determine the fine level. Since purchases are normally lower than sales in value terms, the Commission applied a 10% increase of the fine amount to ensure a sufficient deterrent effect. According to the General Court, the Commission's explanation was sufficiently substantiated for it to deviate from its general fining methodology [see our June 2019 Newsletter]. It therefore maintained the 10% fine increase.

Given these recent developments, companies are well-advised to double-check whether their buying arrangements stay on the right side of the line between legitimate cooperation and anticompetitive collusion. In addition, they should make sure to invite their procurement teams to their competition compliance training.

 

This article was published in the Competition Newsletter of December 2019. Other articles in this newsletter:

 

Team

Related news

12.02.2021 EU law
After the Uber case and the Airbnb case … the Star Taxi App case: focus on the question of the qualification as “Information Society Service”

Articles - Societal and digital developments are reflected in the case law of the CJEU. For several years now, European judges resolve disputes relating to digital applications and the services they provide. On 3 December 2020, they handed down a judgment in a case concerning Star Taxi App. This blog analyses the Star Taxi App case law in the light of the Uber case law and the Airbnb case law. The three judgments have in common the question of the qualification of services as Information Society Services.  

Read more

04.02.2021 NL law
Game over? Gaming companies fined for geo-blocking

Short Reads - The Commission’s cross-border sales crusade seems far from over. The EUR 7.8 million fine imposed on distribution platform owner Valve and five PC video games publishers for geo-blocking practices is the most recent notch in the Commission’s belt. Food producer Mondelĕz may be next on the Commission’s hit list: a formal investigation into possible cross-border trade restrictions was opened recently.

Read more

04.02.2021 NL law
ECJ clarifies limits of antitrust limitation periods

Short Reads - Companies confronted with antitrust investigations and fines may find safeguard behind the rules governing limitation periods (often termed ‘statutes of limitation’). However, two preliminary rulings by the European Court of Justice (ECJ) show that those rules are not necessarily set in stone. According to the ECJ, national time limits relating to the imposition of antitrust fines may require deactivation if these limits result in a ‘systemic risk’ that antitrust infringements may go unpunished.

Read more

29.01.2021 NL law
Publicatie en inwerkingtreding Uitvoeringswet Screeningsverordening buitenlandse directe investeringen

Short Reads - Op 4 december 2020 is een uitvoeringswet in werking getreden die bepaalde elementen uit de Verordening screening van buitenlandse directe investeringen in de Unie regelt en zorgt dat Nederland voldoet aan de verplichtingen uit die verordening. Ook is er een conceptwetsvoorstel toetsing economie en nationale veiligheid verschenen. 

Read more