Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC conducts unannounced inspections of biofuel companies, cites anticompetitive concerns, (Oct 10, 2014)

The European Commission has confirmed that officials have carried out unannounced inspections of companies that produce, distribute, and trade ethanol in two EU Member States. The inspections, which took place on October 7, were conducted in response to concerns that price benchmarks were distorted through possible anticompetitive behavior, the EC reported yesterday. Specifically, the EC notes the possibility that the biofuel companies colluded when they submitted price information to a Price Reporting Agency, which—if found to be true—would violate European antitrust rules prohibiting cartels and restrictive business practices and abuses.

The unannounced inspections follow similar inspections of crude oil, refined oil products, and biofuel companies in May 2013. Similar to the EC’s current concerns, the previous inspections arose from possible collusion in reporting distorted prices to a Price Reporting Agency to manipulate the published prices for oil and biofuel products.

According to the EC, the prices that Price Reporting Agencies assess and publish act as benchmarks for European and international trade in the physical and financial derivative markets for various commodity products. “The importance of these benchmarks and the absence of regulation may leave scope for anti-competitive behavior leading to price distortions,” the EC noted. “Even small distortions may have a significant impact on prices, potentially harming consumers.”

News: Antitrust