Between January 18 and January 20, 2022, the German Federal Cartel Office (“FCO”) raided the German premises of four associations and several manufacturers of electrical cables and wires in relation to alleged coordination of industry-standard metal surcharges.  The cable manufacturers Prysmian S.p.A. (“Prysmian”), Leoni AG (“Leoni”), Nexans S.A. (“Nexans”), and NKT A/S (“NKT”) confirmed searches at their premises and explained that they are cooperating with the FCO.[1]

Already in 2014, the European Commission (“Commission”) fined 11 manufacturers of underground and submarine high voltage power cables a total of € 302 million for allocating customers and territories between 1999 and 2009, among them also Nexans, NKT, and Prysmian.[2]  All three companies (as many others) appealed the Commission’s decision.  However, only NKT was partly successful and had its fine reduced.[3]

Raw material surcharges are a common price component in several industries and charged in addition to individually negotiated prices.  The calculation formulas for surcharges are regularly linked to the current stock market price and thus automatically reflect fluctuations in the raw material price.  While the individual and independent imposition of surcharges does not raise competitive concerns, suppliers are prohibited to reach a common understanding to establish or maintain surcharges as a standard throughout the industry.  Therefore, companies are well advised to scrutinize the origins of the surcharge formulas they use to exclude any links to arrangements or concerted practices in this regard.

Editors: Katharina Apel and Anna Lubberger

[1]              See the companies’ Press Releases: Prysmian, dated January 18, 2022, available in English here; Leoni, dated January 18, 2022, available in English here; Nexans, dated January 20, 2022, available in English here; and NKT, dated January 20, 2022, available in English here.

[2]              Case AT.39610 – Power Cables.  Commission, decision of April 2, 2014, available in English here.  A press release of April 2, 2022, is available in English here.

[3]              See also our Cleary Antitrust Watch blog article of September 24, 2020, available here and our Cleary Antitrust Watch blog article of July 16, 2020, available here.