Antitrust Alert: Germany Issues Antitrust Guidance on Multilateral and Unilateral Behavior
The German Federal Cartel Office ("FCO") provided guidance on several hot antitrust topics in July 2017. While the guidance is contained in the FCO's report on its sector inquiry into the cement and ready-mix concrete markets, it is relevant to the entire economy.
Consortia and Joint Bids
German courts have historically taken a lenient approach on consortia and joint bids. The FCO now sets tougher requirements for justifying a consortium with capacity restraints. Companies need to utilize their entire capacity and explore any option other than forming a consortium in order to meet the customer's requirements. Risks that are always associated with doing business in a competitive environment (forecasting capacity utilization, breakdown of machinery) are unlikely to justify a consortium.
Market Information Systems
While acknowledging the procompetitive effects of market information systems ("MIS"), the FCO strongly emphasizes the antitrust risks involved in MIS, not only for MIS that allow for the identification of individual companies but also for MIS which permit the conclusion that one participant has changed its competitive behavior.
Citing an EU Commission case regarding generic price announcements in the container shipping industry, the FCO encourages companies to issue customer specific price increase announcements to avoid restricting competition through signaling.
The FCO describes its analytical framework for the assessment of predatory pricing practices by providing an example in the market for ready-mix concrete. The example is likely to be used as guidance for specific complaints in this and other industries.
Input and Customer Foreclosure
In light of the vertical integration in the cement and ready-mix concrete industries, the FCO also discusses the legal standards for abusive behavior by foreclosure. While such cases provide substantial challenges to the FCO, it might be looking for a case.
The FCO is likely to initiate cases in these areas. Companies are advised to review their practices as the FCO's guidance deviates in part from existing case law.
For more information, please contact your principal Jones Day representative or either of the lawyers below.
Dr. Johannes Zöttl
Carsten T. Gromotke
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