The Finnish Competition and Consumer Authority (FCCA) proposes that the Market Court imposes a total of approximately EUR 44 million in penalty payments on Onninen, Dahl Suomi, Ahlsell, Uponor Infra, Uponor Suomi, and Pipelife Finland for prohibited cooperation between companies in the Finnish market for plastic HVAC infrastructure pipeline products in 2009-2016. Based on the FCCA reports, the aim of the companies’ cooperation was to keep the market for these products under their control. The companies collaborated in directing business in these products to each other and hampered activities of companies outside their cooperation.
According to the FCCA reports, the largest manufacturers of plastic HVAC infrastructure pipeline products in Finland, Uponor Infra (Uponor Suomi until 30 June 2013) and Pipelife, as well as the largest wholesalers selling infrastructure pipeline products, Ahlsell, Onninen, and Dahl, pursued in collaboration and anti-competitively to maintain their own market positions and to curb price competition in the market. The companies acted in mutual understanding in restricting the manufacturers to trade directly with customers and directing the distribution and sale of manufacturers’ products to the wholesalers. The wholesalers also refrained from selling significant amounts of competing products. In addition, the companies jointly strived to prevent and hinder activities of companies outside the cooperation in order to limit external competitive pressure and to hamper foreign operators’ entry to the Finnish market.
Plastic HVAC infrastructure pipeline products refer to different types of construction, electrical and water supply products, such as pipes and fittings, used in e.g. pressure pipelines, runoff water systems, sewage systems, drainage systems and cable protection pipelines. The products are used especially in major construction projects, and the most important customers are the State, municipalities, cities, water utilities and large construction companies. The cooperating companies are market leaders in the sector whose combined market share at the time of the infringement was around 70% on both the wholesale and manufacturer levels.
"Unlawful cooperation between these companies has softened competition and hampered the activities of competing companies. Companies must make their business decisions independently, and this has not been the case. This cooperation has been detrimental to customers due to the decrease in competition.”
Market control was based on mutual cooperation
Based on evidence gathered by the FCCA, the companies worked in mutual understanding to increase the price level of infrastructure pipeline products by strengthening the role of wholesale trade in relation to trade between manufacturers and customers. The activities were based on reciprocity. Manufacturers mainly refrained from trading directly with customers and cooperated in directing sales to wholesalers, even though customers wished, especially in major construction projects, to also trade directly with manufacturers, which has typically had a lower price level compared to wholesale trade.
In exchange for increasing the share of wholesale, the wholesalers gave the manufacturers a protected position in their inventory selections by only taking on a limited number of competing manufacturers’ products to avoid undermining the cooperation.
The FCCA proposes the following penalty payments to the companies. The decision to impose penalty payments will be made by the Market Court.
|Proposed penalty payment
|Dahl Suomi Oy
|Pipelife Finland Oy
|Uponor Suomi Oy
|Uponor Infra Oy