04 October 2017 at 09:25 BST

EU steps up cartel investigations

The number of cartel investigations has trebled in the past year and look set to increase further.


EU cartel investigations have rocketed with 473 investigations launched in the last yet, up from 134 the previous year. According to the research by Thompson Reuters, investigations most often relate to: Cartels and price-fixing, market monopolies and abuse of market dominance. The increase in investigations comes as the EC continues to crack down on antitrust behaviour.


A particular area of focus recently has been e-commerce, following the EC’s launch of a sector inquiry back in 2015. The findings of the inquiry, published in May this year, highlighted various competition concerns and showed that ‘geo-blocking’ has become widespread.  Geo-blocking occurs when a company prevents online consumers from accessing and purchasing its products or services, on the basis of the consumer's nationality or place of residence. It most commonly takes the form of refusal to deliver goods to customers in member states other than that of the seller, followed by refusals to accept payments from such customers. Following these findings, the EC launched its first full-scale investigations into e-commerce companies in February 2017. These investigations targeted consumer electronics manufacturers, video games publishers and holiday tour operators. A total of 90 investigations were opened in February alone. 


Outside of e-commerce, antitrust cases over the last twelve months have targeted companies across a range of sectors, including transport, the automotive sector and financial services. These cases have taken in multiple parties, which may also explain the high number of investigations opened over the last year.


The number of investigations is set to increase even further following the introduction of the EC’s new whistleblowing tool in March 2017, the research says. To date, most cartels have been identified through a leniency programme, which allows businesses to report their own involvement in a cartel in exchange for a reduction of the fine imposed on them, but now individuals can use an encrypted messaging system that allows two-way communication whilst still retaining anonymity. 


There have been several recent high-profile antitrust investigations brought by the EC:

An electronics company is being investigated over claims that it restricted the prices online retailers could charge for its widely used consumer products; 

A fashion and sportswear company is being investigated over claims it has illegally restricted traders from selling licensed merchandise cross-border and online;

A technology company was recently fined for abusing its market dominance. 

Growth of e-commerce

Karen Williams, head of Practical Law Competition at Thomson Reuters, says: 'The European Commission is coming down hard on companies looking to gain an illegal and unfair advantage.'The growth of e-commerce has been a driver of the rising number of investigations in recent months but this is just part of the European Commission’s current focus, as companies across the European economy continue to jostle for position and profits.'


She added that 'whistleblowing by companies via the leniency application process has provided crucial inside knowledge, and has proved essential in uncovering cartels. This inside information brings cases to conclusion faster and more efficiently and helps identify all the participants involved. The EC’s use of a dedicated encrypted messaging system to encourage whistleblowing by individuals in relation to cartels and anti-competitive practices more generally is innovative and means the Commission can reply to whistle-blower messages and seek further clarification if needs be. It will certainly be interesting to keep track of the number of investigations over the coming year.'


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