Out-Law News | 22 Nov 2019 | 4:21 pm | 2 min. read
The Federal Cartel Office (Bundeskartellamt) reached a settlement with BMW, Daimler and Volkswagen in the case after an investigation by the regulator found the companies had worked with steel manufacturers, forging companies and systems suppliers to agree on "uniformly calculated price surcharges" for scrap steel and alloy.
In a statement, BMW confirmed that it had accepted a €28m fine as part of the settlement. It said that the agreements at issue in the case "had no impact on the sales prices of BMW Group vehicles".
Volkswagen said it takes the proceedings and the result very seriously and has cooperated fully with the Bundeskartellamt. It welcomed "the conclusion of the proceedings and the resulting legal certainty", and said it had "initiated and implemented" a "large number" of measures in recent years to "prevent future misconduct in this area".
Volkswagen added that the case "dealt with grey areas under antitrust law", and added that Bundeskartellamt's finding of misconduct in the downstream stage of the market "is the result of a new restrictive decision-making practice which the Bundeskartellamt has only recently developed".
According to the Bundeskartellamt, the scrap and alloy were sold in addition to other long steel products to the car manufacturers by steel manufacturers or forging companies. Surcharges were applied by the suppliers of the scrap and alloy. The regulator said the car manufacturers agreed between one another to adopt the changes the steel manufacturers had introduced to the way the surcharges were calculated.
The Bundeskartellamt said: "In contrast to the basic prices, the surcharges were traditionally not negotiated but calculated according to sector-wide uniform formulas and added to the basic price as separate price components. In 2003 and 2004 the steel manufacturers unilaterally made certain changes to the surcharge calculation, in some cases under the threat of refusal to supply. As a reaction to this the discussions between the car and steel manufacturers and forging companies were taken up under the umbrella of the German association for steel and metal processing (Wirtschaftsverband Stahl- und Metallverarbeitung)."
"In the talks the representatives of the car manufacturers ensured one another that they would adopt the changes introduced by the steel manufacturers and continue to adhere to the established practice of uniformly calculated price surcharges. They did so at any rate until January 2016," it said.
The Bundeskartellamt ended earlier investigations into three component suppliers and a trade body as part of the case.
Joint purchasing arrangements and buying alliances are the subject of increasing scrutiny from competition regulators in Europe.
The Bundeskartellamt previously raised concerns about a proposed purchasing cooperation in Germany's furniture sector, but announced in September that it had discontinued its investigation after the companies concerned dropped their plans.
More recently, the European Commission opened a formal antitrust investigation to assess whether two French groceries, Casino Guichard-Perrachon and Les Mousquetaires, known as Intermarché, went beyond a legitimate buying alliance arrangement and "coordinated their activities on the development of their shop networks and their pricing policy towards consumers" in breach of EU competition rules.
The Bundeskartellamt has two separate ongoing investigations in the steel sector. It is continuing to investigate manufacturers of special steel products after it fined six special steel companies, a trade association and ten individuals more than €200m in July 2018 for "concluding price-fixing agreements and exchanging competitively sensitive information".
The regulator said it is also "conducting proceedings against several steel producers active in the manufacture and sale of flat steel and a trade association which are suspected of price-fixing".