I must admit I am a huge fan of energy drinks. In case I really need to stay awake and focused, I tend to drink them already for breakfast, which some people in my immediate environment find a little peculiar. However, maybe that is why I took notice when news of a dawn raid at Red Bull by the European Commission made the headlines in late March. The company featured in a few antitrust-related press releases in the recent past, which can be taken as examples for broader trends and topics.
The Turkish cases
In April 2020 – in the middle of the first Covid wave – the Turkish Competition Authority (TCA) published decisions regarding certain behaviours of Red Bull on the Turkish market. The initial allegations concerned a wide range of potential anticompetitive conduct, ranging from resale price maintenance to discounts creating a de facto exclusivity.
Red Bull managed to refute all allegations in the course of the TCA investigation, which was ultimately closed without a fine on Red Bull. Still, in light of the alleged investigation by the European Commission, the case shows what the European Commission’s case could be about (a very good English summary of the Turkish case can be found here).
However, in December 2022, the TCA announced that it had issued fines against several companies active in the fast moving consumer goods sector. Allegations included resale price maintenance as well as coordination with certain retailers. This time, Red Bull could not escape a fine.
Formula One?
What perhaps only motor sports enthusiasts know: At one point Porsche wanted to enter Formula 1. The preferred partner was the highly decorated Red Bull racing team. In the end, however, the two parties could not come to an agreement. What does this have to do with antitrust? The until then confidential plans became public because the parties had already notified numerous antitrust authorities of the envisaged deal (apparently before the deal was sealed). Since some antitrust authorities (have to) publish notified mergers on their websites, the project (that will never happen) became public.
The investigation by the European Commission
On 20 March 2023, the European Commission dawn raided the Austrian premises of Red Bull. Allegedly, the European Commission investigates whether Red Bull had abused a dominant position. While Red Bull and the European Commission only confirmed that the dawn raid took place (surprisingly on a Monday, deviating from the usual Tuesday practice), they declined to comment any further.
Yet, a few days later another headline made it to the news: One of Red Bull’s largest competitors, Monster told the press that it believes “it has been the subject of Red Bull’s anti-competitive tactics”. Such a statement launched just days after the inspection naturally raises attention and may serve as an indication of what motivated the commission to investigate.
And what is next?
It is fair to say that the European Commission suffered some defeats with regard to proceedings concerning the alleged abuse of a dominant position. In the Intel case, the GC (after the ECJ had pointed out this very point) held that conditional rebates cannot be treated as abusive per se and the European Commission therefore had to establish that the rebates lead to foreclosure effects. And only recently, the ECJ raised the burden of proof for abuse cases in its Unilever judgement (a spot-on German summary of the case can be found here), when it held that competition authorities cannot rely on an assumption that exclusivity clauses have a negative impact on competition, without taking into account economic evidence provided by the investigated undertaking.
Against this background and given the history of Red Bull in other jurisdictions, it will be very interesting to see how the Red Bull case will proceed, if at all. In any case, as of today, there are six key takeaways for me:
- The European Commission has time and capacity for other cases besides Big Tech
- European Commission dawn raids can start on a Monday
- It can pay to complain about the behavior of a supposed dominant company
- Despite the recent judgements, the European Commission does not shy away from pursuing abuse of a dominant position cases
- Without wings, you can’t fly, but you can still stay awake for a long time
Photo by Dominik Kollau on Unsplash
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