European Union Welcomes Margreth Verstager, the Commissioner-designate for Competition

Margreth Vestager, the former Danish economy minister is nominated as the new European Union Commissioner for competition. During her confirmation hearing on 2 October 2014 last Thursday, she seems to have impressed the MEP’s with her confident and relaxed attitude and to the point answers.

You can watch the video below to meet the commissioner for competition (to be ). Margreth Vestager Ladies and Gentleman:

Deutsche Bahn once more faced with abuse of dominance claims , “Fahrkartenkontrolle*!”

German Competition Watchdog declared today that an investigation is launched against Deutsche Bahn AG (“DB”)  upon the application by the competitors of the DB to the Federal Cartel Office, claiming that they have limited access to the distribution channels of the DB and that the DB is abusing its dominant position.

The President of the FCO stated that the investigation aims to find out whether the DB abusings its dominance by sales of tarintickets for the passenger rail transport. It will be also analyzed, why the ticket sales of the competitors of the DB is not available at the train stations. The sales and distribution of the tickets of other undertakings in the sector, which is undertaken by the DB, is also an issue that will be scrutinized. Andreas Mundt concluded that a functioning competition at the ticket sales is essential for the competition in public rail transport.

The FCO will analyze to what extent the varying provisions for the ticket sales of the competitors are justifiable. It also needs to be clarified, whether the DB is misusing its obligation to establish common tariffs to force its competitors to use DB’s sales and distribution services.

The first step that the FCO undertake, will be requesting extensive information from the DB, and its competitors which operate in the short- and long distance passenger rail transport sector and also from the Tariff Association of federally and non federally owned railways. (TBNE-Tarifverband der Bundeseigenen und Nichtbundeseigenen Eisenbahnen)

* Ticket control/inspection in public rail transport.

German Competition Watchdog to Reveal the Brewery Cartel

Five nationwide breweries and seven persons in charge have been fined with 106,5 million Euros over concluding price fixing agreements in violation of the German Competition Law. The undertakings hit with those hefty fines are; Bitburger, Krombacher, Veltins, Warsteiner and Barre.

The investigation was initiated upon a leniency application by Anheuser Busch (AB InBev), as a result of which the undertaking is exempted from administrative fines. The investigation into two brewery group companies is still going on, along with four local breweries from North Rhine Westphalia (Nordrhein Westfalen) and a local association, due to attendance to a local collusion community

The president of the FCO, Andreas Mundt, stated that the agreements between the breweries were predominantly based on personal contacts and contacts over the phone. For draft beer, agreed price increase scale in 2006 and 2008, was five to seven Euros per hectoliter. For bottled beer, in 2008, parties agreed upon a price increase of a 20 bottle crate by one Euro.

Through meetings and bilateral contacts, the national breweries agreed upon price increases of the concerned products (draft or bottled) with respect to different volumes. Subsequently some of the breweries, which operate nationwide (AB InBev, Veltins, Warsteiner) came to an agreement upon price increases with local breweries in North Rhine Westphalia (Barre amongst others) at the meetings of the regional brewery association in July 2006 and in September 2007.

In the course of the proceedings; Bitburger, Krombacher, Veltins and Warsteiner have cooperated with the FCO along with Inbev within the scope of their leniency applications. The said undertakings have a right to a settlement. Both settlement and cooperation will be taken into consideration in reduction of fines. The penalty decision is not legally binding and can be challenged before Düsseldorf Higher Regional Court.

DG Comp to publish a DEMO on gathering of digital documents during a dawn raid

 

 

Yesterday (04.11.2013), EU Commission DG Comp published a demo on its website that shows how digital documents are being viewed and exported during an on spot inspection by the Commission.

The aim of the demo is to provide companies a visual overview of the DG Comp’s procedure of gathering electronic copies of inspection documents. The list of exported documents includes the name, date, path and a link to a document itself as well as the total number of documents being exported.

The Demo CD is to be found on the following link: http://ec.europa.eu/competition/antitrust/information_en.html#inspections

To view the demo, the instructions document in the zipped file needs to be read first.

The president of the German Federal Cartel Office (FCO) is the new Chairman of the ICN

Yesterday, Andreas Mundt, the President of the FCO has been elected as the new chairman of the International Competition Network Steering Group. He succeeds Mr. Eduardo Perez Motta, the head of Mexico’s Federal Competition Commission.

The ICN is regarded as the most significant international association of competition authorities. Currently the Network comprises 126 national and multinational competition authorities, including the EU Commission. The ICN’s main function is to foster the exchange of experiences and the so called Best practices through the enforcement of competition law, to strengthen the role of competition authorities in competition advocacy and the to provide an effective cooperation among the competition authorities.

For more information please check out the website of ICN : http://www.internationalcompetitionnetwork.org/about/steering-group/members.aspx

German Competition Authority to Fine Moravia Steel EUR 10 mln over Rail Cartel

The investigation into the rail cartel (Schienenkartell) has come to an end today by a penalty decision of the German Federal Cartel Office, which imposed EUR 10 mln on Moravia Steel Deutschland GmbH for participating in anti-competitive agreements and imposing artificial high prices to Deutsche Bahn AG.

Last year the FCO imposed penalties within the same investigation on Thyssen Krupp, voestalpine and Stahlberg Roensch which is an affiliate of the Vossloh Group Companies since 2010. The total sum of the penalties imposed as a result of the investigation amounts to EUR 134,5 mln. Investigation into the rail cartel was triggered by a leniency application made by the Austrian company voestalpine AG.

The president of the FCO stated that with the decision given today, the first chapter in the rail cartel was brought to an end. The FCO has ongoing investigations into railway operation of local traffic companies as well as private, regional and industry rail sectors which are expected to be concluded soon.

The subject matter of the penalty decision given today was a price and quota agreement conducted in the normal rail product market over a period of 8 years starting from 2001.

Moravia has right to a settlement. The penalty decision is not legally binding and can be challenged before Düsseldorf Higher Regional Court. The penalties of July 2012 however, are effective and legally binding.

The Size of an Undertaking will have a greater impact on setting fines, the FCO says

Yesterday, the German Federal Cartel Office (“FCO”) published its new fining Guidelines for the calculation of penalties arising out of antitrust violations.

Andreas Mundt, the president of FCO, stated that adjustments made in the calculation of fines were necessary to reflect the recent jurisprudence of German Federal Court. He added that the adjustments will not affect the amount of fines considerably. However the new fining guidelines are expected to mean lower fines for smaller undertakings which operate in a single product market whereas they may lead to higher fines for group companies who operate on multiple markets, even if the agreements violating the competition law concerns a single product of their portfolio.

With the new fining guidelines, the FCO aims to increase the transparency of the fining system by clarifying the fining method in hardcore antitrust violations and the criteria in the calculation of fines.

Pursuant to the German Antitrust Law, an undertaking involved in a cartel can be fined up to %10 of the annual group turnover. German Federal Court has interpreted this regulation as a sanctions framework in a recent proceeding against a cement cartel (Az. KRB . 20/12). The new fining guidelines also aim to bring the previous guidelines which were implementing the 10% rule as a cap, in conformity with the widely accepted implementation in Europe antitrust practice.

According to the new guidelines calculation of fines include the group wide annual turnover of the company as well as the turnover achieved in the market where the cartel takes place throughout the period of violation. Therefore in the calculation fines, the size of the undertaking plays an important role along with severity and duration of the violation. These criteria were also of importance in the previous guidelines; however the new guidelines increase the impact of the size of the undertaking in the calculation of fines.

In addition to those above, an undertaking involved in a competition law infringement may still get immunity or reduction of fines if it applies for leniency immediately. Also in the case of a settlement a reduction of fines up to 10% can be granted.