FCO imposes cartel fines on manufacturers of manhole covers and gully tops

The German Federal Cartel Office (FCO) has imposed fines totalling around EUR 6 million on two manufacturers of manhole covers and their responsible personnel for illicit price and discount agreements and the splitting of large orders (press release of 14 January 2021). According to the FCO’s president, the violations, which are alleged to have taken place in 2018, were uncovered with the help of the FCO’s anonymous whistleblower system. The companies concerned are said to have cooperated fully with the FCO. The proceedings were terminated by way of a settlement. According to the FCO, its corresponding decisions are final and have not been challenged.

The proceedings demonstrate that cartel participants in their risk assessment do not only have to take into account leniency applications from competitors but also anonymous tip-offs that may uncover a cartel and lead to fines. Further, the proceedings prove that the FCO is willing to fulfil its duty as a competition watchdog even under pandemic conditions. Nevertheless, Covid-19 likely complicated the FCO’s supervisory task in 2020. In particular, the otherwise very useful investigative tool of searching business premises (so-called dawn raids) currently often remains unused – a search can hardly be conducted in compliance with current hygiene and distance rules.

The generally declining number of leniency applications is also unlikely to make the FCO’s work any easier. In 2020, the FCO imposed fines totalling around EUR 358 million on a total of 19 companies and 24 individuals for violations of the cartel ban, relying not only on leniency applications, but also on ”tip-offs from other sources” (see annual review of 29 December 2020). For the future, the FCO intends to uncover more cartels by using innovative methods. In particular, it is relying on the screening of markets and the aforementioned anonymous whistleblower system.