Christmas and antitrust

It is this time of the year again: When you wander around Christmas markets, you can smell mulled wine and Christmas cookies everywhere, people are doing their (final) gift shopping, the company is coming together for the last party of the year (in some cases for the first time after the Covid break), and Last Christmas is playing over and over on the radio. In short: Christmas is just around the corner. Being the antitrust nerd that I am, I wanted to find out if there is any link between Christmas and antitrust.      

Petrol stations = Christmas tree dealers

This year, a subject of recurring discussions across Europe were the fuel prices at petrol stations, which surprisingly vary only slightly in a certain local area (see our posts here and here). A very similar feeling can creep up on you when looking for a Christmas tree in your neighbourhood. You might find that the prices for small, medium and large trees are usually exactly the same. This must be a cartel!?

There might be an alternative explanation, though: Similar to gas stations, it is not uncommon (at least in Germany) to display the tree prices on the stores or mobile sales stalls. In order to align prices, an agreement is therefore not required – the dealers can just make the same round as I do. So, before someone proves the opposite, I would not assume that there is an antitrust violation.

If similar prices nevertheless bother you, you either have to cut down a tree yourself (of course only where you are allowed to do it) or buy an artificial Christmas tree. The latter does not lose its needles and doesn’t have to be bought every year (but who likes artificial Christmas trees???).

Haha ok, but are there any real antitrust cases revolving around Christmas?

Of course there are – this brings us back to artificial Christmas trees. Who does not remember the case in which the US Department of Justice filed a civil antitrust suit, challenging the acquisition of Masterpiece, Inc. of Blakely, Pennsylvania by American Technical Industries, Inc., of New York (ATI) in 1973 (I don’t – but I was not even born back then)? Back at the time, ATI was the largest producer and Masterpiece was the seventh largest producer of artificial Christmas trees in the United States.

The US Department of Justice feared that the transaction would substantially lessen competition in the manufacture, import, and sale of artificial Christmas trees. In 1975, the parties, i.e. the DOJ and ATI agreed on a settlement, which allowed ATI to keep Masterpiece on the conditions that it shares certain patens with other industry players and abstains from acquiring another artificial Christmas tree company.

Sound like peaceful Christmas (although the parties agreed on the settlement in mid-July). However, similar to Christmas with the family, the peace lasted only briefly and when ATI tried to acquire another artificial Christmas tree producer in 1982, the DOJ apparently filed a civil contempt action.

But Europeans should not sit back with a grin and laugh at the Americans and their artificial Christmas trees – Europe has its very own antitrust Christmas case, which even concerns real Christmas trees: Apparently, the Danish Christmas Tree Growers Association instructed its members about minimum prices they should charge for their Christmas trees.

In what is known as the 2007 price fixing scandal (which is even on Wikipedia), the Danish prosecutor charged the association with price fixing in December 2007, so just before Christmas. The court of first instance imposed a fine of approximately EUR 27k on the association (and a personal fine on the president of the association). Upon appeal, the fine for the association was even increased to approximately EUR 55k by the court of second instance.

So, what is the conclusion this time?

Since a conclusion is always an integral part of my posts, I wanted to get me some roasted almonds and a mulled wine at the Christmas market to boost my creativity. As I had to find out, both cost more or less the same at all stalls. Nevertheless, the almonds were delicious. The mulled wine has warmed me up and the joyful excitement for Christmas also increased. So, I thought maybe you don’t have to look at everything from an antitrust perspective after all. Maybe.

We wish our readers a Merry Christmas, great holidays and a Happy New Year! After a short pause, the blog will return with full steam in 2023.

Photo by Norman Tsui on Unsplash