The EU Commission has fined Altstoff Recycling Austria (ARA) 6m Euros for reportedly blocking competitors from entering the market in Austria for household packaging waste services.
The investigation found that they hindered competition between 2008 and 2012 and have been found in breach of EU antitrust legislation – which is essentially competition rules and regulations on the continent.
It’s a huge fine from what is a serious breach of the rules; although the fine has been reduced by 30% for the company’s cooperation with the Commission’s investigations.
The household packaging waste services they offer is from Austrian rules about producers of goods being obliged to take back packaging waste from their products. It’s a nice ‘green’ rule that will no doubt help to reduce waste and promote recycling.
Companies can outsource the collection and recycling of the waste for a fee that’s paid by the producers. In Austria, ARA has been the dominant force in terms of providing such services for a number of years, which they reportedly achieved off the back of a nationwide infrastructure system that could not be duplicated by competitors. ARA then allegedly refused access to the infrastructure, meaning competitors couldn’t enter the market on a level playing field.
This has been found as an abuse of their dominant market position.
Abuse of a dominant market position
With a single dominating company in a market, there is very little in the way of a need to keep prices low to compete. If a company abuses their dominant position – like we have seen here in the ARA case – competition can be hindered.
Low competition is normally always a bad thing that can lead to no need for organisations to compete on price, and also means there is little need for them to try and work more efficiently and keep prices down through innovation and development. A market could easily stagnate with prices being inflated with low innovation when there is no need for companies to compete for business.
The EU antitrust rules are similar to what we have here with the Competition Act, meaning that similar findings may have been established had this have occurred here in the UK.