Antitrust: Commission confirms sending a Statement of Objections to Alcan
European Commission - MEMO/08/111 22/02/2008
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Brussels, 22nd February 2008
The European Commission can confirm that it has sent a Statement of Objections (SO) to Alcan on 21st February 2008. The SO outlines the Commission’s preliminary view that Alcan has infringed EC Treaty rules on abuse of a dominant position (Article 82) by tying its dominant aluminium smelting technology with handling equipment sold by Alcan's subsidiary ECL. This behaviour, if proven, risks limiting innovation in the aluminium production sector and affecting competition on the €70 billion worldwide market for aluminium, an important input for many parts of European industry.
Alcan, headquartered in Canada, is the parent company of an international group involved in many aspects of the aluminium, engineered products and packaging industries. Its activities include bauxite mining, alumina refining, aluminium smelting, manufacturing, recycling and related research and development. Following the acquisition of Alcan by Rio Tinto in October 2007 (see IP/07/1434), the merged entities' aluminium business "Rio Tinto Alcan" became the world's biggest aluminium producer. ECL, a wholly owned subsidiary of Alcan, is the major producer of equipment used in aluminium smelters in the world.
The SO concerns Alcan's contracts for the sale of its aluminium smelting technology which provide that purchasers must also buy ECL's handling equipment for aluminium smelters, the so-called Pot Tending Assembly (PTAs). As a result of these contractual provisions, Alcan's customers appear to be prevented from using PTAs from other suppliers. It is the Commission's preliminary view that Alcan is dominant on the market for aluminium smelting technology and that this contractual tie might significantly harm its customers and ultimately end-users of aluminium, through reduction in innovation and likely negative impact on the aluminium prices.
A Statement of Objections is a formal step in Commission antitrust investigations in which the Commission informs the parties concerned in writing of the objections raised against them. The addressee of a Statement of Objections can reply in writing to the Statement of Objections, setting out all facts known to it which are relevant to its defence against the objections raised by the Commission. The party may also request an oral hearing to present its comments on the case.
The Commission may then take a decision on whether conduct addressed in the Statement of Objections is compatible or not with the EC Treaty’s antitrust rules. Sending a Statement of Objections does not prejudge the final outcome of the procedure.
Alcan has eight weeks to reply to the SO, after which it will have the right to be heard. If the preliminary views expressed in the SO are confirmed, the Commission may require Alcan to cease the abuse and may impose a fine.