Bundeskartellamt imposes fine due to unlawful supply association
03 May 2019
The Bundeskartellamt, Germany’s Federal Cartel Office, has imposed a fine of around 1.4 million euros on an asphalt manufacturer for entering into illegal arrangements in connection with supply associations.
According to an announcement by the Bundeskartellamt, it has imposed a fine of around 1.4 million euros on an asphalt manufacturer for being party to an illegal cartel agreement reported to have encompassed unlawful arrangements relating to price, territory, customers and quotas for the supply of construction companies between 2005 and 2013. Another company involved in the arrangements went unpunished for participating in the leniency program. The proceedings against other companies were dropped.
According to the Bundeskartellamt, the asphalt manufacturers began coordinating on orders and forming supply associations as early as the end of the 1990s. It found these supply associations unnecessary in terms of their capacity in many cases or that the need for their existence had not been reviewed. The Bundeskartellamt claimed that since 2005 more than 100 supply associations have emerged from the arrangements in question. The cartel watchdog deemed the supply associations unnecessary, arguing that the orders were generally capable of being fulfilled by one of the companies. Accordingly, the decision to form supply associations served primarily to stabilize the market as a means of avoiding price and bidding wars among themselves, thus hindering fair competition.
We at the commercial law firm GRP Rainer Rechtsanwälte note that while supply associations and other forms of cooperation between companies are not unlawful as a matter of principle, they must always operate within the existing legal framework in order to avoid violating antitrust or competition law. Because violations of antitrust law are by no means always obvious, it is advisable for companies to obtain legal advice before agreeing to enter into supply associations or other forms of cooperation.
Violations of competition and antitrust law are consistently met with severe penalties. This is true not only for cases involving illegal arrangements relating to price or territory, but also for violations with the respect to which it is much less apparent that an offense has been committed. For instance, even individual contractual clauses may be in violation of applicable laws. Lawyers with experience in the fields of antitrust and competition law can advise companies and assist in enforcing or fending off claims in the event of violations of antitrust or competition law.