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ACM fines cartel of manufacturers of concrete garages

Update

03-16-2017 The District Court of Rotterdam has ruled on appeal in this case. For the complete text of that ruling (in Dutch), please refer to this page.

The Netherlands Authority for Consumers and Markets (ACM) has imposed a fine on a cartel of manufacturers of prefabricated concrete garages. The two largest manufacturers of such garages, Rekers Betonwerk and Juwel Betonbauteile, had concluded anticompetitive agreements in order to eliminate mutual competition. They shared customers, and they had concluded price-fixing agreements. Furthermore, they prevented other competitors in this market from becoming more active. All of these actions have resulted in higher prices for their customers. ACM considers this a very serious violation of the Dutch Competition Act.

Since Rekers had notified ACM of this cartel, and fully cooperated with the subsequent investigation, Rekers will not be fined. If Rekers had not done so, it would have been imposed a fine of at least EUR 3 million. The other member of the cartel, Juwel, will be imposed a fine of EUR 306,500. The level of the fine is based on the company’s turnover. The fine has been imposed for illegal activities on the Dutch market.

What happened?

Rekers and Juwel had decided to share the market amongst the two of them, thereby eliminating mutual competition. They shared customers by capping the discounts on their own retail prices. With those price caps, they sought to prevent that retail prices would drop below a pre-determined level. Rekers and Juwel are two of the most important manufacturers of prefabricated concrete garages on the Dutch market. Their customers are mostly business customers and, to a lesser extent, private individuals. These two companies are based in Germany.

What problem did ACM tackle?

Chris Fonteijn, Chairman of the Board of ACM, explains: “Customers were under the impression that they actually had something to choose from. Yet, these manufacturers fixed prices and shared customers behind the backs of those very same customers. Customers have thus been harmed. And that is why we are taking action against such practices.” Businesses that share customers among themselves, and make price-fixing agreements, for example about discounts, eliminate mutual competition. Such practices constitute violations of the Dutch Competition Act. This is a very serious violation. Customers are harmed because, in reality, they do not have anything to choose from, and are thus forced to pay a higher price than if there had been competition.

When the ban on cartels is violated, ACM imposes fines on the cartel members. In this case, ACM was notified of the cartel in question by Rekers, which is one of the cartel members. The notification had been made before ACM launched an investigation. Since Rekers was the first member to file for leniency, and since it has fully cooperated with the subsequent investigation, it will not be fined. Juwel has filed an appeal against the decision.

A second leniency request

Because of another leniency request filed in Germany by Rekers, the German competition authority (the Bundeskartellamt) in 2015 imposed fines on ten manufacturers of prefabricated concrete garages  totaling EUR 11 million for price-fixing agreements and customer-sharing agreements in Germany. Juwel was not involved in the German case. In connection with both cases, ACM and the Bundeskartellamt collaborated within the European network of competition authorities (ECN).