EC opens antitrust probe into European tire industry

BRUSSELS—The European Commission (EC) has begun an antitrust investigation into the European tire industry, covering new replacement tires for passenger cars, vans, trucks and buses sold in the European Economic Area.

EC representatives began carrying out unannounced inspections Jan. 30 at the premises of companies active in the tire industry in several member states, looking for evidence that some companies may have violated European Union antitrust rules that prohibit cartels and restrictive business practices (Article 101 of the Treaty on the Functioning of the European Union).

The Commission said it is concerned that price coordination took place among the inspected companies, including via public communications.

Thus far, only Nokian Tyres P.L.C. has acknowledged publicly that it was visited by the EC investigators, stating: "Nokian Tyres does not have information on the outcome of the inspection, and it cannot comment on the ongoing investigation," adding that it is "fully co-operating with the authorities."

Commission officials were accompanied on their unannounced visits by their counterparts from the relevant national competition authorities of the member states where the inspections were carried out, the EC said.

The European Tyre & Rubber Manufacturers' Association—which represents a dozen of the world's largest tire makers with operations in Europe—has not been raided, nor is it at this stage otherwise subject to any other investigative measure of the European Commission, the trade group said.

European shipments of replacement market tires sank measurably last year, according to the ETRMA's most recent business activity report.

ETRMA General Secretary Adam McCarthy noted at that time that the declines were mainly due to a "drop in the demand driven by the inflationary costs of raw materials, energy and payroll, as well as to the reduction of inventories in distribution channels."

Unannounced inspections are a preliminary investigatory step into suspected anticompetitive practices. The fact that the Commission carries out such inspections does not mean that the companies are guilty of anti-competitive behavior, nor does it prejudge the outcome of the investigation itself.

There is no legal deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned co-operate with the Commission and the exercise of the rights of defense.

Under the Commission's leniency program, companies that have been involved in a secret cartel may be granted immunity from fines or significant reductions in fines in return for reporting the conduct and cooperating with the Commission throughout its investigation.

Individuals and companies can report cartel or other anti-competitive behavior, also on an anonymous basis, through the Commission's whistle-blower channels. Further information on the Commission's leniency program and whistle-blower tool is available on DG Competition's website.