For once, antitrust was not at the centre of world events this week…but enforcement continued steadily. Three actions by three different regulators this week demonstrate once again that antitrust investigations are very broad-based, whether in traditional cartel agreements, cases where boundaries blur in M&A contexts, or in the increased scrutiny of actions by potentially dominant companies.
It is often said that the era of classic cartel agreements such as price fixing and market allocations is slowly but steadily ending. And, indeed, as also reported on this blog, regulators seem to increasingly focus on new theories of harm, relating to innovation, labour or purchasing markets. But to assume that old-school agreements do not exist anymore at all seems too far-fetched, as a decision by the German Federal Cartel Office earlier this week shows. Here, the FCO imposed a fine of almost EUR 3 million on a construction company for agreeing on a bid-rigging scheme with regard to a tender for the restoration of a bridge. One company agreed to submit only a “cover quote” in the tender procedure to ensure that the other company would be awarded the contract. The whole deal also included a compensation payment for the cover quote.
What makes this case interesting is not only the kind of behaviour but also that the agreement only related to one very specific tender procedure, namely the renovation of Cologne’s Zoobrücke. It might have been not too helpful, that said bridge is feared well-known by everyone moving around the Rhineland area as traffic there impacts traffic even beyond Cologne’s city borders.
A crack in the wall
The reality of fines for antitrust infringements in M&A was underscored by a Finnish competition authority decision. Valio, a producer of various milk products, acquired Heinon Tukku, a foodservice wholesaler, back in 2021. The Finnish authority raised concerns as the acquisition would have allowed Valio access to pricing information from competing food manufacturers through Heinon Tukku, and therefore only approved the deal conditionally. In the end, Valio had to agree to ring-fence confidential information of its rivals to ensure that such information was not disclosed to people at Valio responsible for pricing decisions in its food manufacturing business.
One year after the acquisition, Valio had to admit that it still received competitor information because of a mistake in the internal firewalls, which ultimately resulted in a fine of EUR 600,000. Whilst here the decision to impose a fine was apparently rather clear-cut as Valio was in breach of its merger commitments, the case serves as a reminder that mergers leading to vertical integration might require robust Chinese walls, which must be enforced and respected by all parties involved.
Exclusive glass
Not quite as close to the finish line, the European Commission opened an investigation into certain anticompetitive practises by US glass producer Corning. Based on the press release, the Commission has concerns that both certain agreements with mobile phone manufactures and agreements with finishers are in breach of Art. 102 TFEU. Relating to both aspects of the case, the Commission preliminary takes the position that the agreements included various exclusive sourcing and purchasing obligations, exclusivity rebates and English clauses according to which the customers were obliged to report Corning competitive offers and were only allowed to accept these offers if Corning failed to match the price.
The Commission emphasized that it will carry out an in-depth investigation as a matter of priority. This goes somewhat hand-in-hand with the Commission’s plan to finalize its Guidelines on exclusionary abuses in 2025 and its overall willingness – despite mixed outcomes in court proceedings – to investigate Art. 102 cases vigorously.
The classics are classics for a reason
The cases are, at least to a certain extent, not more than a random screenshot of what is generally going on. Still, these are good example of European regulators continuing to be active on the enforcement side. In this respect, not only new theories of harm are developed and followed, but evergreens like cover quotes, exclusivity agreements and illegal information exchange within vertical integrated companies remain high on their agenda.
Photo: Chris Weiher on Unsplash
Antitrustpolitics.com 