Scrap automotive batteries market is again on the agenda of competition authority(s)

This month the scrap automotive batteries market is in the centre of attention: the European Commission fined 3 companies a total of EUR 68 million for a cartel on fixing (low) prices for purchasing scrap automotive batteries. The decision may reactivate interest of the competition authorities in other jurisdictions in scrutinizing the market for scrap automotive batteries, considering the importance of the waste recycling for the environment/consumers. The latest antitrust decision of the Turkish Competition Authority in relation to the scrap automotive battery market was in 2008.

HIGHLIGHTS

Recycling scrap automotive batteries has become one of the significant environmental problems of the 21 century around the world. For this reason, governments/regulators have started to pay a special attention to it. Take for instance, 2015 Circular Economy Package of the European Commission (with the Action Plan), or 2004 Regulation on Control of Waste Batteries and Accumulators in Turkey. In addition to that the scrap automotive batteries market has been subject to antitrust investigations both in the EU and Turkey. Competition authorities in this market may be regarded as the ‘guardians’ of the well-functioning of the recycling industry and circular economy (eventually helping to reduce waste).

EU: CARTEL TO REDUCE PURCHASING PRICES

In February 2017 the European Commission fined 3 companies, Campine (Belgium), Eco-Bat Technologies (United Kingdom), Recylex (France), a total of EUR 68 million for participating in a cartel fixing (low) prices for purchasing scrap automotive batteries during 2009-2012. The fourth company Johnson Controls (USA) received a full immunity under the leniency application.

Contrary to the majority of cartel cases where the companies normally conspire to increase their sale prices, these four companies colluded to reduce the purchase price paid to scrap dealers and collectors for the used car batteries.  Mostly small and medium sized battery collectors and scrap dealers were affected by the cartel.

TURKEY: BACK TO 2008

The most significant TCA’s decision in relation to the scrap batteries market is the one dated 20.05.2008 and numbered 08-34/456-161.  It concerned AKÜDER, which is an Association of scrap automotive battery collectors, and AKÜÇEV that was established by AKÜDER’s members. Among other issues, the TCA investigated whether the parties concerned were involved in anticompetitive setting up prices for scrap automotive batteries at every stage of the (recycling) process, as well as restrictive exclusivity practices, such as requiring recycling plants-members of AKÜÇEV to have scrap automotive batteries only through AKÜÇEV.

As a result, the TCA imposed a fine totalling TRY 7,506,157.31 (approx. EUR 1,876,539) on 8 companies that were subject to investigation.

Interestingly, following the infringement decision in 2008, AKÜDER made necessary corrections to its business activity and consequently obtained a negative clearance from the TCA (Decision No 13-32/429-190 dated 29.05.2013).

CONCLUSION

Recycling (of scrap automotive batteries) is among the hot topics worldwide nowadays, which has also been in the focus of competition authorities in various jurisdictions. Turkey and the TCA pursue similar to the EU approach to competition law issues in the market for scrap automotive batteries. With the recent decision of the European Commission, the competition concerns in the market for scrap automotive batteries may re-enter the competition authorities’ agenda.

*by Mustafa Ayna, ACTECON, and Hanna Stakheyeva, Bogazici University

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