Major companies under investigation as European Commission turns up the heat
Probes by the European Commission into illegal cartels, price-fixing and other anti-competitive practices more than tripled last year, as it ramps up its efforts to promote open and fair trading across the Single Market, says the legal business of Thomson Reuters, the world’s leading source of intelligent information.
According to data provided to Thomson Reuters the number of antitrust investigations opened by the European Commission (EC) into individual companies increased 253% in the last 12 months, to 473 in 2016/17 up from 134 in 2015/16.
Thomson Reuters says investigations most often relate to:
- Cartels and price-fixing
- Market monopolies
- 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.
Thomson Reuters explains that ‘geo-blocking’ is 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. 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.