Carmakers given antitrust fine – Anticompetitive arrangements relating to steel procurement

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Germany’s Federal Cartel Office, the Bundeskartellamt, has imposed fines totaling approx. 100 million euros on three car manufacturers for anticompetitive practices in relation to the procurement of long steel.

The Bundeskartellamt has asked three car manufacturers to pay up to the tune of around 100 million euros due to anticompetitive arrangements. We at the commercial law firm MTR Rechtsanwälte can report that these were not your traditional price-fixing agreements, but rather arrangements that eliminated competition for certain price components and thus breached antitrust law.

According to an announcement by the Bundeskartellamt from November 21, 2019, representatives of the three carmakers and the steel producers, forges, and system suppliers regularly met from 2004 to 2013, exchanging uniform price surcharges for the procurement of long steel. A significant proportion of procurement prices for long steel is made up of scrap and alloy surcharges. Due to the discussions with the suppliers, this price component was no longer being freely negotiated and competition was eliminated in this area.

The initiative for this practice came from the steel producers, which is why the Bundeskartellamt had imposed fines against them as early as last year amounting to around 205 million euros. In the years 2003 and 2004, the steel producers had introduced changes unilaterally, and in some cases under the threat of suspension of deliveries, to the calculation of scrap and alloy surcharges. The Bundeskartellamt reported that the car manufacturers accepted these calculation changes at the talks and stuck to them until January of 2016. It should be noted, however, that these procurement costs had virtually no impact on the total price of a passenger car.

The car manufacturers acknowledged the situation and cooperated with the Bundeskartellamt in the course of the proceedings. This was taken into account when calculating fines. In exercising its discretion, the Bundeskartellamt discontinued investigations into three suppliers and one association.

Violations of antitrust law are not limited to obviously unlawful price-fixing arrangements; even individual clauses within agreements can be anticompetitive and give rise to sanctions. That is why it is advisable to have agreements reviewed with a view to identifying potential violations of antitrust law or competition law.

Lawyers with experience in the field of antirust and competition law can offer advice.

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