Competition Commission prohibits exchange of information between importers and suppliers of luxury cosmetics
On October 31, 2011, the Competition Commission prohibited several undertakings active in the luxury cosmetics sector from exchanging information on prices, turnovers, advertising expenses and sales terms1. The Competition Commission held that the information exchange between the undertakings involved (all of which were members of the Geneva based Association of Manufacturers, Importers and Suppliers of Cosmetic and Perfumery Products ("ASCOPA")) infringed the Competition Act, because the exchanged information allowed the participants to adjust their market behaviour to one another. However, the Competition Commission considered that the information exchange could not be regarded as a hard-core cartel within the meaning of the Competition Act and, therefore, did not impose a sanction on the undertakings involved. The decision also provides guidance on Competition Commission's practice in relation to information exchange.
The investigation, which was launched after the exchange information was reported by a member of the ASCOPA to the Secretariat of the Competition Commission, was directed against Swiss subsidiaries and distributors of leading manufacturers of luxury cosmetic products, including Chanel, Clarins, Coty, Estée Lauder, L'Oréal Produits de Luxe, Parfums Christian Dior, P&G Prestige Products, Richemont and YSL Beauté. For years, these undertakings had been exchanging, within the ASCOPA, information on gross sell-in prices charged to their respective retailers, sales figures and turnovers, marketing channels and advertisement expenses and general sales conditions. The exchanges on gross sell-in prices and marketing expenses occurred on a semi-annual basis, whilst those on sales figures and turnovers occurred, with a different level of detail, on a monthly, quarterly and annual basis.
The Competition Commission found that the information on gross sell-in prices allowed the members of the ASCOPA to adapt the level of their own gross price to the one of their competitors and, by doing so, to restrict the competition on the net sell-in prices (that is, the prices after discounts). The Commission further found that, with respect to turnovers, the exchanged data were so detailed that each participant was in a position to calculate the volume of products supplied by the other participants and, as a result, to control...