EU opens antitrust probe into Omya's calcium carbonate supply to paper industry

EU opens antitrust probe into Omya's calcium carbonate supply to paper industry

The European Commission has launched a formal antitrust investigation into whether Omya, the largest supplier of calcium carbonates in the European Economic Area (EEA), has abused a dominant position by requiring paper industry customers to buy all or most of their calcium carbonates from it. The Commission announced the probe on [date not given], saying it will assess whether exclusive purchasing obligations and exclusivity rebates breached EU competition rules.

Key facts

What exactly is the Commission investigating?

According to a statement published by the European Commission, the investigation will examine whether Omya, headquartered in Switzerland, has imposed exclusive purchasing obligations on its customers in the paper industry, requiring them to purchase all or most of their calcium carbonates from the company. The Commission will also look into exclusivity rebates that provide financial incentives for customers to source all or most of their calcium carbonates from Omya.

The Commission is concerned that these two types of practices may have limited the ability of other suppliers of calcium carbonates to effectively compete for customers in the European paper industry. Calcium carbonates are an important input in paper manufacturing, widely used as fillers and coating pigments. They can reduce production costs and improve the brightness, opacity, smoothness and printability of paper and cardboard. Why does this matter for the paper industry?

Competitive and affordable supplies of calcium carbonates are important for the industry because they can reduce input costs for paper mills and ultimately benefit consumers of paper and cardboard products, including packaging products that are increasingly used as alternatives to single-use plastic packaging. The Commission said the opening of a formal investigation does not prejudge its outcome.

If proven, the practices under investigation may breach EU competition rules that prohibit the abuse of a dominant position under Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the EEA Agreement. These provisions prohibit abuse of a dominant position that may affect trade and prevent or restrict competition within the Single Market. What happens next?

The Commission will now carry out its in-depth investigation as a matter of priority. The implementation of Article 102 TFEU is defined in Regulation 1/2003. Article 11(6) of the regulation provides that the opening of proceedings by the Commission relieves the competition authorities of the Member States of their competence to apply EU competition rules to the practices concerned. Article 16(1) further provides that national courts must avoid adopting decisions which would conflict with a decision contemplated by the Commission in proceedings it has initiated.

There is no legal deadline for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the companies concerned cooperate with the Commission and the parties' exercise of the rights of defence. More information on the investigation will be available on the Commission's competition website, in the public case register under the case number AT.40893.

Source: European Commission

More news

Sitemap