COMCO investigates Steel Trading Companies

In a press release dated 8 November 2023, the Swiss Competition Commission (COMCO) announced the opening of an investigation against three steel trading companies, including dawn raids.

According to COMCO, there are indications that the companies Arthur Weber AG, Debrunner Acifer Bewehrungen AG and Spaeter AG have tied the sale of reinforcing steel to the simultaneous purchase of spacer cages since 2021. Reinforcing steel is used in various forms such as bars or mesh in concrete construction. Spacer cages are used to create the desired spacing between the reinforcing steel placed in the concrete. This means that construction companies always need both reinforcing steel and spacer cages for concrete construction.

According to COMCO, there are indications that the three investigated companies are charging higher prices for the reinforcing steel if construction companies purchase spacer cages and reinforcing steel from different dealers.

The next step is to examine whether the companies have coordinated the behaviour under investigation and thus possibly fulfilled an agreement in breach of competition law. In addition, it will be investigated whether they hold a collectively dominant position and have abused such position within the meaning of the Cartel Act.

The presumption of innocence applies to the companies subject to the investigation. Even if there was coordination regarding the tying as a mere business condition, a competition law violation subject to direct fines should probably be denied from a collusion point of view. However, in its practice, COMCO interprets the offences pursuant to Art. 5 para. 3 and 4 of the Swiss Cartel Act extensively (see for example the article European Court of Justice reaffirms restrictive interpretation of «restrictions of competition by object»). Furthermore, it is likely to be very difficult to establish a collective dominant position of three independent companies. A collective dominant position can only be assumed with great caution and under very special circumstances. Hence, very high standards of proof apply.

The COMCO press release can be found under the link here (in German, French and Italian).