Regulatory risk and the year ahead for Europe

MLex exclusive: EU antitrust regulator kept powder dry last year, but 2024 could prove more explosive

EU fines against cartelists and dominant firms were muted in 2023 compared with the highs of previous years, although officials continued to stretch the long arm of enforcement into new areas of the economy. This year, the last of Margrethe Vestager's mandate as EU competition chief, may see a bigger haul of fines again if certain high-profile probes conclude, while efforts in recent years to drum up new leads and cases might start to bear fruit.

Keep scrolling for the story, and to access a wider selection of must-read insights from our correspondents across Europe.

5 January 2024
By Nicholas Hirst, Tono Gil and Lewis Crofts

EU sanctions against cartels and dominant firms remained muted in 2023 compared with the highs of some previous years.

While producing little in the way of fines, investigators nonetheless broke new ground last year with sanctions against defense companies and a cartel among pharmaceutical makers.

This year could potentially see higher penalties, depending on the outcome of certain probes into Big Tech, while the European Commission's efforts to cultivate a broader pipeline of cases might start to bear fruit.

The EU’s competition watchdog imposed 465 million euros ($510 million) of fines in 2023. Discount one fine of 376 million euros, which dates from 2009 and was re-imposed on Intel in 2023 following a court battle, and that leaves just 89 million euros.

It's a far cry from the cartel-busting, Big Tech-fining mega sanctions that headlined in the halcyon decades of enforcement. But regulators have long argued that their performance shouldn’t just be measured by fines banked. At a time when their main challenge is to make markets fairer, the expectations of citizens and the political classes are more sophisticated.

Swedish cooperative Lantmännen picked up the biggest fine in 2023, with a 47.7 million-euro sanction in December for manipulating the price of bioethanol. Rabobank was hit with a sanction of 26.6 million euros in November, after investigators found its traders colluded with counterparts from Deutsche Bank, which escaped a fine as the immunity applicant.

Neither of these actions had much to catch the eye. But buried in some of the smaller cases were instances of the commission breaking new ground.

Six pharmaceutical companies paid a total of 13.4 million euros in October for fixing the price of a particular drug ingredient. The commission said it represented the first time the EU watchdog had sanctioned a cartel in the pharmaceutical sector, and served as a warning to the wider industry.

Hand-grenade manufacturer Diehl paid 1.2 million euros in September for colluding with rival RUAG. It was the first time that the EU’s competition watchdog had prosecuted a cartel in the defense sector.

In 2023 the new EU-level fines totaled less even than a single penalty imposed by the French competition authority: a 91 million-euro fine on Rolex in December.

How do the EU sanctions compare with previous years? In 2022, there were sanctions of 267.5 million euros, although that includes 79 million euros re-imposed on Telefónica and Pharol for an abuse sanctioned in 2013, but which was overturned in court.

In 2021, the EU’s competition watchdog imposed fines of 1.74 billion euros, notably 875 million euros in one case against carmakers. In 2020, the total was 369.3 million euros, according to the commission.

Of course, the total for each year can be heavily swayed by fines in a single large case. Take 2018, for example, when the commission fined Google a total of 4.34 billion euros.

Still, it’s hard to dispute that the fines for new cases in 2023 were relatively low. It’s no secret that the commission’s probes into Big Tech have faced turbulence, making them harder to conclude, and that the watchdog’s pipeline of cartel cases started to dry up.

The choice to pursue abusive conduct via the Digital Markets Act — which is more focused on changing markets than on fining bad behavior — may also mean some potential cases haven’t materialized.

Wish list

Things may change in 2024 and onwards.

First, investigators may succeed in wrapping up some of the Big Tech cases. The commission has indicated it is preparing to fine Apple over its app store rules, MLex understands.

It hoped to conclude a sprawling probe into Google’s AdTech business before the mandate of EU competition boss Margrethe Vestager ends, probably in November, MLex understands. They may also push to conclude an inquiry into Facebook Marketplace, after issuing antitrust charges in December 2022.

Big Tech companies are not the only ones facing the prospect of fines this year. Swiss confectionery maker Mondelēz revealed in January 2023 that it was negotiating a settlement of an EU antitrust probe, setting aside 300 million euros for a potential fine. Carmakers have also discussed settling an EU inquiry into allegations they fixed the market for end-of-life vehicles.

An inquiry into rail operators České Dráhy and Österreichische Bundesbahnen, which are accused of boycotting their private rival RegioJet, is also well advanced. The parties took part in a closed-door hearing in the case a year ago, which is usually one of the last steps before a final decision.

In addition, EU regulators may hope to conclude a high-profile inquiry into Israeli drugmaking giant Teva, which in October 2022 was formally accused of using unfair tactics to hinder rivals of its blockbuster multiple sclerosis treatment. It took part in a hearing in March 2023.

It could also be possible for enforcers to conclude an inquiry into fashion house Pierre Cardin and its largest licensee, Ahlers Group. The companies were charged with breaching EU law in July, and responded on Nov. 1.  

In short, there is a pipeline of relatively advanced cases that Vestager could push to conclusion before the end of her mandate, if desired. 

First steps

The first major sanction in Europe of the year may be in France against companies, including Nestlé, Crown and Ball, and trade associations involved in food packaging, which are accused of colluding when complying with legislation to phase out the chemical Bisphenol A. That decision is expected soon.

Still, EU enforcers seemingly start 2024 with a healthier long-term pipeline that in recent years, especially as regards cartels.

Last year alone, investigators raided medical device maker Edwards Lifesciences, producers of synthetic grass including TenCate Grass, fashion houses including Gucci, energy drinks giant Red Bull, producers of fragrances including Symrise and Firmenich, as well as online delivery services Glovo and Delivery Hero.

That comes on top of ongoing inquiries — formal or informal — into salmon producers, fashion houses including Dries Van Noten, software giants Oracle and SAP, French electricity exchange EPEX Spot, as well as Greece's Public Power Corporation.

Enforcers are expected to soon settle a probe into Spanish rail operator Renfe after testing commitments, and to formally charge Microsoft with harming competition when it rolled out its Teams communication software. That would certainly start 2024 with a bang.

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