Be careful what you fish for
A cautionary tale for companies seeking to complain of anti-competitive conduct by a competitor: approach the competition regulator with clean hands!
Spain’s National Competition Commission (CNC) recently fined the National Association of Canned Fish and Seafood Manufacturers of Spain (ANFACO) €2.1 million for anti-competitive conduct, consisting of a ‘coordinated commercial policy’ implemented by ANFACO’s member companies against Galician mussel producers.
Unluckily for ANFACO, the CNC investigation was prompted by a complaint which ANFACO had itself made in October 2008 about alleged anti-competitive conduct by Galician mussel producers. In those proceedings, the CNC concluded that the mussel producers had breached the Spanish Competition Act by fixing prices and other commercial terms and conditions. As a result, 15 mussel producers were collectively fined about €1.7 million.
However, information obtained by the CNC during those proceedings revealed that something fishy was taking place within ANFACO itself. The evidence showed that ANFACO had coordinated a temporary boycott to force common purchasing terms on mussel producers. This collusion restricted the ability of each member company to negotiate individually with mussel producers, breaching the Spanish Competition Act. Although ANFACO’s actions were taken as a countermeasure to the anti-competitive conduct of Galician mussel producers, they were nevertheless an unjustified restraint of competition.
The CNC has sent a strong message that any “collective coercion” can still be an illegal agreement, even if it is a reaction to anti-competitive conduct. It has also provided a reminder to other companies that approaching a competition regulator can bring the spotlight back to you.
ANFACO has two months to appeal the sanction under the Spanish Competition Act. Seven of the 15 associations have commenced this process.
By Fiona Chong and Louise Beange