Most cartels restrict competition between competitors as to their sales, whether in relation to price or customers or any other matter. However, cartels can also arise in relation to purchasing and the European Commission (EC) recently announced that it is investigating such a case.
On 24 June 2015, the EC informed five lead recycling companies that it suspects them of having participated in a cartel for scrap lead-acid batteries, which was aimed at lowering purchase prices. The alleged intent was to maintain higher profit margins for the recycling companies. The behaviour would likely reduce the value of used batteries sold for scrap, to the detriment of the sellers.
The EC takes the view that, if ultimately proven, this activity amounts to the same thing as a standard price-fixing cartel: it disrupted the normal functioning of the market and prevented competition on price.
It has always been clear that cartels on the purchasing side are in competition law terms just as bad as standard selling cartels. However, this case provides a good reminder and a useful example for compliance training programmes.