EU-Commission: closes antitrust investigations into retail alliances

Brussels / BE. (eu) The European Commission has decided to close its preliminary investigations into the practices of two international retail alliances AgeCore and Coopernic as well as their members.

The Commission had concerns that AgeCore and Coopernic may have negotiated trading terms with manufacturers in breach of EU antitrust rules that prohibit cartels and restrictive business practices – Article 101 of the Treaty on the Functioning of the European Union. The Commission also investigated whether such negotiations may have restricted competition by harming innovation or consumers either in terms of choice or price.

The decision to end the preliminary investigations is based on a thorough analysis and a careful assessment of all the available evidence, including internal documents reporting on the parties’ commercial strategies. In its preliminary investigations, the Commission found that these international retail alliances negotiate on behalf of their members certain trading terms with manufacturers, notably rebates based on the total value of their purchases in exchange of certain services, such as promotions. These trading terms supplement those that retailers and manufacturers negotiate at the national level.

When assessing joint purchasing agreements, the Commission is mindful that such agreements aim to create a degree of buying power vis-à-vis suppliers, which can lead to lower prices, more variety or better-quality products for consumers. However, depending on the circumstances, such agreements may also enable collusion and restrictions of competition, leading to increased prices or reduced supply.

In the present case, the investigations identified no evidence of anticompetitive effects stemming from such negotiations. In particular, the Commission found that (i) the specific contracts signed by international retail alliances are intrinsically linked to the purchase of goods by retailers from manufacturers and are similar to some of the terms used at national level for the same transactions; (ii) retailers exerted a higher bargaining power negotiating through the alliances; and (iii) the rebates contributed to the retailers’ overall pricing strategies allowing them to reduce retail prices to match or undercut competitors’ pricing. The extent of such price reductions depended notably on the degree of competition existing in the relevant downstream retail markets.

Maintaining the capacity of retailers to reduce prices to consumers as well as ensuring competition between retailers are key objectives of competition policy. They are particularly important in the current context of high inflation. On this basis, the Commission has concluded that there are insufficient grounds to further pursue the investigations.