Short Reads

Cigarettes producers fined for alleged indirect info exchange

Cigarettes producers fined for alleged indirect info exchange

Cigarettes producers fined for alleged indirect info exchange

01.10.2020 NL law

Enforcement of competition rules in relation to indirect information exchange seems to be catching on; while the European Commission only flagged the risks in its consumer electronics cases, the ACM has taken up the challenge and imposed fines. Four cigarettes producers were fined a total of EUR 82 million for allegedly indirectly exchanging information on the future retail prices of cigarettes through their wholesalers and other buyers. According to the ACM, the manufacturers knowingly accepted this information and used it to determine their own pricing strategies.

Companies should be wary of the ACM’s strict approach towards indirect information exchange. According to the ACM, any customer communication should be clearly marked ‘for your eyes only – not for redistribution’ and sales teams should be instructed to expressly decline any competitor information inadvertently received through third parties.

Third party price list circulation

Due to a sector-specific taxation system, cigarette pack prices are set by the manufacturer instead of the retailer (as is usual for consumer products). To allow wholesalers and other buyers to adapt their sales systems to newly-set prices, tobacco manufacturers send price lists to them in advance. The ACM found that, in the period 2008-2011, some of the buyers passed the manufacturers’ future price lists on to competitor manufacturers, who knowingly received, accepted and asked for them. Manufacturers allegedly also sent ‘trial balloons’ with information to wholesalers to feel out their competitors’ response. The ACM held that the manufacturers used this information to set their own retail prices for cigarettes packs, thereby enabling them to coordinate their pricing strategies.

First time fine for indirect info exchange

This is the first time the ACM has imposed fines for indirect information exchange between competitors. The Commission has played with the concept in its consumer electronics cases but decided to stick to vertical resale price maintenance (RPM) because there was no clear-cut evidence of retailers driving the RPM (by e.g. requesting their suppliers intervene with ‘undercutting’ retailers).

According to the ACM, there is evidence that the manufacturers were aware that their information found its way to their competitors through the wholesalers, and used this ‘road’ to their own advantage. As a result, despite that not all manufacturers always implemented exactly the same price adjustments, the conduct put ‘the brakes on competition’; thereby stifling mutual competition.

The four cigarette producers have filed objections against the ACM’s decision. It therefore remains to be seen whether the ACM approach will stand.


For now, companies should remain vigilant about the type of information they receive – even inadvertently. Even though most sales managers are aware of the anticompetitive risks of competitor contacts, the risks of accepting third party information may be less obvious. 

Pending the appeals against the ACM Decision, it is therefore advisable for companies to double-check whether their antitrust compliance programmes include potential risks related to third party communications. It is also worth clearly indicating ‘for your eyes only – not for redistribution’ on all customer communications. Finally, until a ruling on the appeals, it is advisable to instruct sales teams to expressly decline all competitor information inadvertently received through third parties, and to notify the company’s legal department as soon as possible upon receipt of such information.



This article was published in the Competition Newsletter of October 2020. Other articles in this newsletter:



Related news

11.01.2022 EU law
2022: the big reveal of 2021’s competition law promises

Short Reads - 2021 was riddled with sneak previews of a “review of competition policy tools with unprecedented scope and ambition”. These sneak previews, alongside 2021’s other competition law developments, seem to point in the direction of a more ‘social’ side to competition law in 2022, as well as looming Big Tech and Big Pharma battles, intensified (international) cooperation, more clarity on merger-related obligations for companies, and shiny new vertical and horizontal block exemption regulations. 2022 will reveal how and when the revised tools will materialise.

Read more

02.12.2021 NL law
Google Shopping: self-preferencing is a form of abuse of dominance

Short Reads - On 10 November 2021, the General Court (GC) almost entirely dismissed Google’s action against the European Commission’s Google Shopping decision. According to the European Commission (the Commission), Google illegally favoured its own comparison shopping service by displaying it more prominently in its search results than other comparison shopping services (see our July 2017 Newsletter). The Commission found that Google was abusing its dominant position and imposed a EUR 2.42 billion.

Read more

02.12.2021 NL law
Back to the future – Commission publishes roadmap for green and digital challenges

Short Reads - The Commission’s Communication “A competition policy fit for new challenges” (link) (the “Communication”) identifies key areas in which competition law and policy can support European efforts in dealing with the challenges of the green and digital transitions. The document covers all areas of competition law (antitrust, merger control, and State aid) and identifies various ways in which new and existing tools can contribute to addressing these challenges.

Read more