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Confectioner fined for exchanging information

John Cassels
06/12/2012

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United Kingdom

Confectioner fined for exchanging information

The German Federal Cartel Office ("FCO") has recently fined the confectioner Haribo and some of its sales staff €2.4 million for exchanging sensitive commercial information with others. The FCO's fine confirms the very substantial risks that arise in connection with what can often seem to be benign sharing of information, as opposed to the classical hard-core cartel agreements on prices, territories, customers or quotas.

During the years 2006 and 2007, sales staff at Haribo and Mars regularly met within the scope of an industry information discussion round.  They exchanged information on negotiations with retailers as well as on the rebate demands of the retail trade.

The FCO considered that this information influenced the market conduct of the confectioners in their negotiations with the retailers, since information of this type is normally handled confidentially. Proceedings were instigated on grounds of a leniency application filed by Mars, which escaped being fined.

Very high risks

This is the latest in a growing list of information exchange infringements that have been heavily penalised in Germany.  The FCO imposed fines of €9.6 million on nine companies and senior executives in the perfume and cosmetics sector for exchanging sales data and information on market strategies and market parameters.  In 2008 fines of €37 million were also imposed on seven suppliers of branded pharmaceutical products and their sales managers. At meetings of the relevant working group, information on rebate demands made by retailers and on the current status of the negotiations was exchanged.  On the same grounds, the FCO also fined three consumer goods manufacturers a total of €38 million in 2011.
 
Trade association meetings

Discussions with competitors, including during association and trade meetings, can be highly risky if not managed appropriately.  Topics which should not be the subject matter of talks and meetings with competitors include:

  • Purchase and/or sales prices
  • Discounts
  • Price and market strategies
  • Current sales
  • Purchase/sales volumes
  • Production capacities
  • Specific costs

Agendas for trade association meetings should be settled in advance and adhered to in meetings.  If in meetings, discussion includes sharing of commercially sensitive information, attendees must clearly and unambiguously distance themselves from such discussion and this should be documented.  If the discussion continues, then attendees should leave the meeting.  

For further guidance on complying with competition law and competition law risks, please contact me.

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