Competition: Commission imposes € 24 million fine on Tomra group for abuse of dominant position
European Commission - IP/06/398 29/03/2006
Brussels, 29th March 2006
The European Commission has imposed a fine of € 24 million on Norwegian group Tomra for violating EC Treaty competition rules on the abuse of a dominant position (Article 82). The Commission has found that Tomra abused its dominant position on the market for the supply of machines, usually installed in retail outlets, for the collection of used drink containers in return for a deposit, in Austria, Germany, the Netherlands, Norway and Sweden. The Commission concluded that Tomra’s practices, consisting of a system of exclusivity agreements, quantity commitments and loyalty-inducing discounts, restricted or at least delayed the market entry of other manufacturers. This constitutes a serious abuse of its dominant position. A lack of competition on a market can give rise to customers paying higher prices for the products concerned and to customers being offered less innovative products.
Competition Commissioner Neelie Kroes commented: “I will not tolerate dominant companies hindering competition or excluding other players from the market, as this harms innovation and consumers. Rebates and discounts cannot be used by a dominant company as part of a strategy to exclude actual and potential competitors.”
Tomra violated the EU Treaty’s competition rules by implementing an exclusionary strategy on five different national markets from 1998 to 2002. The practices condemned by the decision include agreements which (i) granted Tomra the status of an exclusive supplier of the machines, and (ii) imposed individualised quantity targets, or retroactive rebate schemes, the thresholds of which usually corresponded to total or almost total machine requirements of its customers. All of these practices, as implemented by Tomra, aimed at restricting, and have restricted or seriously hindered, the ability of other machine suppliers to enter the market efficiently.
The Commission’s investigation was triggered by a complaint from a German supplier of these machines, asking the Commission to investigate whether Tomra was abusing its dominant position, in particular through agreements concluded with several large retail companies thus preventing the German company’s access to the market. Following this, Commission officials, assisted by national authorities, carried out inspections at the premises of Tomra group. The inspections provided evidence that Tomra abused its dominant position by implementing a strategy to close off the market to actual and potential competitors.
This illegal conduct enabled Tomra to extend or artificially maintain its dominant position. The abuse was done intentionally and with awareness of the harm they were likely to cause to competition on the market.
The Commission considered the infringement to be a serious one: practices, such as those implemented by Tomra, have previously condemned by the Commission and by the Community courts.
In fixing the fine, the Commission took into account the gravity of the infringement and its duration, i.e. 5 years. The fine of € 24 million was imposed jointly and severally on the following subsidiaries of Tomra group:
- Tomra Systems ASA,
- Tomra Europe AS,
- Tomra Systems B.V.,
- Tomra Systems GmbH,
- Tomra Butikksystemer AS,
- Tomra Systems AB,
- Tomra Leergutsysteme GmbH.