William Malcolm

EU Anti-Trust Chief Warns Of More Anti-cartel Raids

The European Commission (EC) is preparing further raids on companies suspected of participating in cartel agreements. This was said by EC Vice-President Margrethe Vestager, who is also in charge of competition. She also criticized the illegal agreements that companies make with each other and in which they promise each other that they will not drag employees.

Last week, the Commission raided Stora Enzo and UPM, one of the largest pulp producers in Europe, as well as Metsa Fiber, part of the Metsa Board. These were the first such events in two years, and plans for earlier inspections were thwarted by a pandemic.

Companies that the commission suspects of participating in other cartels should expect a visit from investigators soon, Vestager said. “And this will be just the beginning of a series of raids we are planning for the coming months – understand that I cannot say exactly when or where it will be,” she said at a conference organized in Italy by the Italian Antitrust Authority.

The European Commission is the EU’s executive body and has extensive powers. Among other things, it performs the role of the EU Antitrust Authority. If it finds out that one of the companies is participating in the cartel, it can impose a fine of up to ten percent of its worldwide turnover. Anyone who reports an infringement to the commission will usually receive immunity and will not be sanctioned by the commission. This also applies to the companies that were part of the cartel but decided to draw the Commission’s attention to its existence. If a company is identified but starts cooperating and provides the commission with essential information about the operation of the illegal cartel, the commission will usually reduce its fine significantly.

Vestager said regulators could be even more lenient. This is because customers are increasingly complaining about the damage they may have suffered as a result of companies’ infringements, which discourages many companies from providing key information to regulators.

The commissioner also criticized agreements between companies, under which companies promise not to drag employees together. According to Vestager, this could also be considered a cartel, which suggests that Vestager is also going to take action against such practices, Reuters reported. Similar agreements between employers directly affect individuals because their purpose is to avoid wage increases.

“It then prevents talented people from moving where the economy will benefit most from their work,” Vestager said. Similar agreements, which may include competition clauses, ie an employee’s written commitment not to be tempted by an offer of competition, have recently been increasingly criticized.