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Competition

Car companies fined €875 million for collusion against NOx removing technologies

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The European Commission has found that Daimler, BMW and the Volkswagen group (Volkswagen, Audi and Porsche) breached EU antitrust rules by colluding on technical development in the area of NOx cleaning. 

The Commission has imposed a fine of €875 million. Daimler was not fined, as it revealed the existence of the cartel to the Commission. All parties acknowledged their involvement in the cartel and agreed to settle the case.

Commission Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The five car manufacturers Daimler, BMW, Volkswagen, Audi and Porsche possessed the technology to reduce harmful emissions [but] they avoided competing on making use of this technology's full potential. Competition and innovation on managing car pollution are essential for Europe to meet our ambitious Green Deal objectives.” 

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The car manufacturers held regular technical meetings to discuss the development of the selective catalytic reduction (SCR)-technology which eliminates harmful nitrogen oxide (NOx)-emissions from diesel passenger cars through the injection of urea (also called “AdBlue”) into the exhaust gas stream. For over five years (2009 - 2014), the car manufacturers colluded to avoid competition using this new technology.

This is the first cartel prohibition decision based solely on a restriction of technical development and not on price fixing, market sharing or customer allocation.

Whistleblower tool

The Commission has set up a tool to make it easier for individuals to alert it about anti-competitive conduct while maintaining their anonymity. The tool protects whistleblowers' anonymity through a specifically designed encrypted messaging system that allows two-way communications. The tool is accessible via this link.

Competition

Competition: Commission publishes findings of evaluation of Market Definition Notice

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The European Commission has published a Staff Working Document that summarises the findings of the evaluation of the Market Definition Notice used in EU competition law.

The aim of the evaluation was to contribute to the Commission's assessment of the functioning of the Market Definition Notice, in order to decide whether to repeal the Notice, leave it unchanged or revise it.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “We need to analyze the market and the boundaries of the market where companies compete. The Market Definition Notice is very useful in that context. The evaluation has confirmed that it provides clarity and transparency to stakeholders on how we approach market definition. The basic principles of the Market Definition Notice, based on the case law of the EU courts, remain sound today. At the same time the evaluation indicates that the Notice does not fully cover recent evolutions in market definition practice, including those related to the digitalisation of the economy. We will now analyse if and how the Notice should be revised to address the issues we have identified.”

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The Commission launched the evaluation of the Market Definition Notice in March 2020. During the evaluation, the Commission collected evidence to understand how the Notice has performed since its adoption in 1997. The evidence collected includes, among others, contributions by stakeholders gathered in a public consultation that took place between June and October 2020. In addition, the Commission consulted the EU national competition authorities and proactively engaged with experts and representatives from stakeholder groups. Finally, the Commission requested an external evaluation support study, which reviewed relevant practices in other jurisdictions, as well as legal and economic literature, in relation to four specific aspects of market definition: (i) digitalization, (ii) innovation, (iii) geographic market definition and (iv) quantitative techniques.

The findings of the evaluation

The evaluation has shown that the Market Definition Notice remains highly relevant as it provides clarity and transparency to companies and other stakeholders on the Commission's approach to market definition - an important first step of the Commission's assessment in many antitrust and merger cases.

The results of the evaluation indicate that the Market Definition Notice is effective in providing correct, comprehensive and clear guidance on key issues of market definition and on the Commission's approach to it.

At the same time, the evaluation also suggests that the Notice does not fully reflect developments in best practices in market definition that have taken place since 1997, including latest developments in EU case law. For example, the Commission has refined its approach to market definition in line with the prevailing market conditions, which today are increasingly digital and interconnected, and the sophistication of available tools, such as improved processing of large numbers of documents or refined quantitative techniques. Furthermore, since when the Notice was adopted, the Commission has also gathered more experience in analysing markets that are potentially global or at least broader than the European Economic Area.

 According to the evaluation, areas where the Market Definition Notice might not be fully up-to-date include: (i) the use and purpose of the SSNIP (small significant non-transitory increase in price) test in defining relevant markets; (ii) digital markets, in particular with respect to products or services marketed at zero monetary price and to digital ‘ecosystems'; (iii) the assessment of geographic markets in conditions of globalisation and import competition; (iv) quantitative techniques; (v) the calculation of market shares; and (vi) non-price competition (including innovation).

The Commission will reflect on the need and on how to address the issues that were identified in the context of the evaluation.

Background

Market definition is a tool to identify the boundaries of competition between undertakings. The objective of defining the relevant product and geographic market is to identify the actual competitors that constrain the commercial decisions of the undertakings concerned, such as their pricing decisions. It is from this perspective that the market definition makes it possible, among other things, to calculate market shares that convey meaningful information for the purposes of assessing market power in the context of merger or antitrust proceedings.

Market definitions reflect market realities. Therefore, they differ across sectors and may evolve over time. Geographic market definitions, for example, may range from national or local markets – such as for the retail sale of consumer goods – to global markets, such as for the sale of aviation components. As market realities evolve over time, the Commission's market definitions also evolve over time.

The Market Definition Notice provides guidance on the principles and best practices of how the Commission applies the concept of relevant product and geographic market in its enforcement of EU competition law.

More information

See the dedicated webpage of DG Competition, which contains all stakeholder contributions submitted in the context of the evaluation, summaries of the different consultation activities and the final report of the evaluation support study.

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Competition

Competition: European Commission publishes 2020 Report on Competition Policy

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The European Commission has published a Report on Competition Policy for 2020, presenting the key policy and legislative initiatives undertaken last year, as well as a selection of decisions adopted. In 2020, EU competition policy significantly contributed to the Commission's efforts to respond to the coronavirus outbreak, both in terms of the healthcare emergency, as well as on its impact on the livelihoods of citizens. The state aid Temporary Framework, adopted at the beginning of the crisis, has enabled member states to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus pandemic. In the area of Antitrust, the Commission published a Communication providing guidance to companies cooperating on projects aimed at addressing supply shortages of essential coronavirus-relevant products and services, such as medicines and medical equipment.

Furthermore, despite the challenges brought forward by the changed working conditions, in 2020, the Commission took several decisions in this field, among which three cartel decisions and 5 antitrust ones. It has also launched an antitrust inquiry into the sector of Internet of Things (IoT) for consumer-related products and services in the EU. Also in the area of merger control, the Commission adopted over 350 merger decisions and intervened in 18 cases (including 13 mergers cleared subject to commitments in first phase and 3 cleared with remedies after a second phase). The Commission also adopted a proposal for a Digital Markets Act to addresses the negative consequences arising from certain behaviours by platforms acting as digital 'gatekeepers' to the single market, and published a White Paper, to develop tools and policies to better tackle the distortive effects of foreign subsidies in the internal market. The full text of the Report (available in EN, FR, and DE and other languages) and the accompanying staff working document (available in EN) are available here.

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Commission launches probe into Facebook Marketplace

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Today (4 June) the European Commission has opened a formal investigation to assess whether Facebook violated EU competition rules, writes Catherine Feore. 

Online classified ads providers advertise their services via Facebook, at the same time they compete with Facebook's own online classified ads service, 'Facebook Marketplace'. The Commission is investigating whether Facebook might have given Facebook Marketplace an unfair competitive advantage by using data obtained from competing providers while advertising on Facebook. 

The formal investigation will also assess whether Facebook ties its online classified ads service 'Facebook Marketplace' to its social network. The Commission will examine whether the way Facebook Marketplace is embedded in the social network constitutes a form of tying which gives it an advantage in reaching customers. As a ‘social marketplace’ you can also see broader profiles, mutual friends and can chat using Facebook messenger, features that are different to other providers.

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The Commission points out that with almost three billion people using Facebook on a monthly basis and almost seven million firms advertising, Facebook has access to vast trove of data on the activities of users of its social network and beyond, enabling it to target specific customer groups.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We will look in detail at whether Facebook has an undue competitive advantage in particular in the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data. In today's digital economy, data should not be used in ways that distort competition.” 

UK: 'We will be working closely with the European Commission'

The UK’s Competition and Marketing Authority (CMA) has also launched an investigation into Facebook’s activities in this area. The Commission’s competition spokesperson Ariana Podesta said: “The Commission will seek to work closely with the UK’s Competition and Markets Authority as the independent investigations develop.”

Andrea Coscelli, Chief Executive of the CMA, said: “We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors.

“Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.

“We will be working closely with the European Commission as we each investigate these issues, as well as continuing our coordination with other agencies to tackle these global issues.”

The CMA have highlighted how the Facebook Login, which can be used to sign into other websites, apps and services using their Facebook log-in details could be being used to benefit Facebooks own services. The CMA also highlights ‘Facebook Dating’ - a dating profile service it launched in Europe in 2020.

Separately from this new investigation into Facebook’s use of advertising market data, the UK’s Digital Markets Unit (DMU) has started to look at how codes of conduct could work in practice to govern the relationship between digital platforms and groups, such as small businesses, which rely on these platforms to reach potential customers. 

The DMU is operating in ‘shadow’, non-statutory form, pending legislation that will provide it with its full powers. Ahead of this, the CMA will continue its work promoting competition and the interests of consumers in digital markets, including taking enforcement action where necessary.

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