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Bundeskartellamt imposes million-euro fines in response to illegal arrangements

posted 3 years ago

The Bundeskartellamt – Germany’s Federal Cartel Office – has imposed fines totaling approx. 175 million euros on five aluminum forging companies and ten employees responsible for engaging in anticompetitive arrangements.

The Bundeskartellamt announced on December 23, 2020 that senior staff members of the relevant companies had, over a period of years, been exchanging information on cost factors and encouraging one another to pass on rising costs directly to their customers. We at the commercial law firm MTR Rechtsanwälte note that arrangements of this kind are prohibited because they restrict competition.

The investigations by the Bundeskartellamt were triggered by a leniency application submitted by one of the firms involved, with the company in question emerging from the process without being fined thanks to the leniency program.

According to the findings of the Bundeskartellamt, representatives of the aluminum forging companies regularly met from 2006 to 2018, though not all the forging companies were involved throughout the entirety of this period. There was a broad consensus among the companies that increases in procurement costs would be passed on directly to their customers. To this end, the parties exchanged information about their respective purchasing costs for aluminum, as well as energy costs and processing costs. They also agreed on how the cost increases could be passed on to customers.

The companies’ representatives further agreed not to account for procurement costs and to only consider the added value when calculating customer discounts referred to as “ratio” by the parties involved, with these typically being agreed at the beginning of a supply relationship. The forging companies’ customers include manufacturers and suppliers in the automotive industry.

In setting the fines, the Bundeskartellamt took into account the fact that two companies supported and cooperated with the investigations. Together with another one of the forging companies, they admitted to the charges as part of an amicable conclusion to the proceedings.

The Bundeskartellamt’s fining decisions may yet be the subject of an appeal.

The illegal arrangements entered into by the parties involved restricted competition and violated antitrust law. However, violations of antitrust law are by no means always as blatant as was the case here. Individual contractual clauses can themselves often give rise to a violation and thus severe penalties.

Lawyers with experience in the field of antitrust and competition law can serve as advisors.

https://www.mtrlegal.com/en/legal-advice/antitrust-law.html

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