Umicore

Autorité de la concurrence fined in 2016 Umicore, one of the global leaders in zinc, €69 million for abuse of dominant position, having practiced a 9 years trade policy aiming at constraining its distributors to supply themselves exclusively from the company.

In 2016, the French Antitrust Authority fined the Belgian group Umicore for having implemented between 1999 and 2007 a trade policy that constrained its distributors and retailer to supply themselves exclusively from Umicore. In France, Umicore is the number one of the sector covering 70% of the market shares.

The Authority has ascertained that Umicore has implemented a trade policy aimed at forcing its registered retailers to supply themselves exclusively from products of its own brand, VM Zinc. Through a contractual and commercial system, Umicore has forced its distributors to severely limit – if not exclude – supplying from competing suppliers.

To ensure compliance with the exclusivity clause, Umicore’s trade policy was accompanied by surveillance, threats and retaliation aimed at encouraging the VM Zinc centers to stay faithful to its brand. Several types of retaliation were implemented against VM Zinc distributors which had distributed zinc from competitors: reduction or suppression of bonuses and discounts for faulty distributors; suspension of their “VM Zinc” status depriving them of preferential conditions, such as special supplier rates, attractive payments and delivery conditions).

Since the commercial policy has been implemented continuously between 1999 and 2007, it has had important consequences on the sector. The VM Zinc centers, which accounted for almost 70% of zinc construction products’ sales, were a compulsory step to distribute efficiently these products, a situation that made the access to the main distributors of zinc construction products harder and more expensive for competing suppliers.

The foreclosure policy has enabled Umicore to limit for 9 years the access to the market of zinc distribution to its competitors and thus contributed to freeze the competition on the French territory. As a consequence, the competing rolling mills specialists could not develop and were abusively forced out of the market. For such reason, the Autorité de la Concurrence fined Umicore €69.2 million.