In its press release of May 23, 2024, the European Commission announced that it has fined Mondelēz, one of the biggest producers of chocolate and biscuits in the amount of €337.5 million for breach of European Union’s competition rules.
The existence of a single internal market in the European Union enables traders and retailers to obtain products in member-states where the prices are lower and then resell those products in member-states where the prices are higher. Disrupting this way of market functioning is considered one of the most serious restrictions on competition.
As part of the Commission’s efforts to prevent such conduct, in November 2019, an unannounced inspection took place, on the premises of Mondelēz International Inc., in Austria, Belgium and Germany and in January 2021 a formal investigation was launched.
During the investigation, the Commission found that Mondelēz engaged in twenty-two instances of anti-competitive agreements, or concerted practices, in breach of Article 101 of the Treaty for functioning of the European Union. According to this Treaty, anti-competitive agreements and concerted practices that could affect trade between EU member-states and that could prevent, restrict, or distort competition within the internal market are prohibited.
According to the Commission’s findings, between 2012 and 2019, Mondelēz disregarded these prohibitions and limited the territories, or customers to which seven wholesale traders (customers of Mondelēz) could resell Mondelēz’ products. One of the agreements in question included a provision ordering Mondelēz’ customer to apply higher prices for exports compared to domestic sales.
Among the violations of Article 101, the Commission determined that between 2006 and 2020, Mondelēz prevented ten exclusive distributors from certain member-states from replying to sale requests from customers located in other member-states without prior permission from Mondelēz.
Furthermore, between 2015 and 2019, Mondelēz abused its dominant position on the market in violation of Article 102 of the Treaty for functioning of the European Union that prohibits the abuse of dominant position which can affect the trade within the EU, or prevent, or restrict competition.
The abuse of dominant position was done by refusing to supply a broker in Germany with chocolate tablets and by doing so prevented the resale of those products in the territories of Austria, Belgium, Bulgaria, and Romania where prices were higher. Additionally, by ceasing the supply of chocolate tablets in the Netherlands, Mondelēz prevent them from being imported into Belgium, where it was selling them at higher prices.
With these actions, Mondelēz artificially partitioned the single internal Market, preventing traders from obtaining products in member-states where the prices are lower and reselling the products in member-states where the prices are higher.
In accordance with these findings, the European Commission imposed a fine of €337.5 million. It should also be noted that in determining the level of the fine, the Commission took into account the he gravity and duration of the infringements, as well as the value of Mondelēz’ sales relating to the infringements, while the fact that Mondelēz expressly acknowledged its liability for the infringement of EU competition rules and cooperated with the Commission led to the fine being reduced by 15% and remaining on the amount of 337.5 million.