Luxembourg competition law update (second semester of 2023)

  • Cartel in the coffee distribution sector

Decision 2023-D-01 (see link here – only in French) concerns price fixing between 2015 and 2020 by Peter Hennen G.m.b.H. (“PH”) in the Luxembourg coffee distribution market, particularly with respect to service stations on the border with Germany.

Following an inspection at PH’s premises and investigative measures involving several retailers, the Competition Authority (“CA”) found that PH had set recommended minimum retail prices for retailers. According to the CA, the setting of these prices was combined with the organisation of an incentive and/or repressive mechanism via a system of discounts in order to respect the recommended prices. In addition, PH had implemented a price policing system by monitoring the prices charged by retailers and sending reminders where necessary. Some retailers took part in the price policing measures, in particular by denouncing their competitors who did not respect the resale prices. Moreover, the CA found significant compliance with the recommended resale prices, which helped it to establish the agreement between PH and the retailers.

The CA considered these practices to be resale price maintenance agreements, qualified as hard-core restrictions of competition law, and imposed a fine of EUR 3,075,962 on PH. The leniency applicant, PC-Tank S.à r.l., was exempted from the payment of any fine.

  • Sector enquiry of the residential property sector

The CA published the results of a sector enquiry of the residential property sector (see link here – only in French), carried out in particular because of soaring housing prices.

The CA identified horizontal co-operations between developers that may limit competition by reducing the number of property projects on the market, such as joint development of real estate projects, for example in order to obtain better financing for the project. The CA will continue to monitor these practices. In addition, the CA found that some developers have gathered a large number of plots of land in order to limit the investment risks associated with administrative hurdles and suggests creating a land reserve but also the shortening of the planning phase and reducing administrative formalities. The CA also found that most of the land available for residential construction is concentrated in the hands of a small number of individuals and private companies and that speculation significantly contributes to soaring land and housing prices by restricting the supply of housing. The enquiry also mentions the risk of anti-competitive practice of bid rigging in auctions and tender procedures, which the CA will monitor. Furthermore, the CA recommends that the Government should end the banking monopoly on completion guarantees. Finally, the CA has analysed the impact of the remuneration of real estate agents on housing prices and recommends regulating the profession to put an end to agencies proposing real estate prices not in line with the market.

  • Consultation on commitments proposed by the Ordre des Architectes et des Ingénieurs-Conseils (OAI)

As part of an investigation into the services provided by architects and engineers in connection with the award of public contracts, the CA has identified a number of competition issues relating in particular to the distribution by the OAI to architects and engineers of several documents aimed at establishing tariffs applicable to contract work in the “public sector” and the method of calculating fees for the “public sector” and the “municipal sector”.

According to the CA, the OAI has adopted various decisions that can be qualified as “decisions by an association of undertakings” with the object of preventing, restricting or distorting competition. Those risks have now been addressed by the OAI in a proposal for commitments, including inter alia an undertaking that the OAI will no longer distribute to its members standard contracts and documents containing provisions fixing the remuneration of the services of architects and consulting engineers. The CA has launched a public consultation on these commitments before deciding whether to accept them (see link here – only in French).

  • CA’s secure whistleblowing platform established

The Law of 16 May 2023 on the protection of persons who report breaches of Union law protects whistleblowers who report breaches of Luxembourg and directly applicable EU law of which they have become aware in a professional context. Reported breaches could concern alleged EU or national competition law infringements. The CA is one of the 22 Luxembourg authorities competent to receive such reports.

The abovementioned law protects whistleblowers working in the public or private sector and people close to them who risk reprisals as a result of the reporting of an alleged breach of law.

In this context, in collaboration with the Centre des technologies de l’information de l’État (“CTIE”), the CA has set up a new whistleblowing platform to collect anonymous reports of breaches of laws within its sphere of competence, in particular competition law and digital markets regulation (see link here – only in French). This is also in line with the European Commission’s whistleblower protection tool for reporting cartels or other alleged anti-competitive practices (see link here).

  • The CA joined a request for referral to the European Commission of Qualcomm’s proposed acquisition of Autotalks

In August 2023, the CA joined a referral request by 15 other Member State competition authorities in accordance with Article 22 of the EU Merger Regulation. The referral gives the Commission the possibility to review the proposed acquisition of Autotalks by Qualcomm – a merger which falls below EU notification thresholds. The joint referral request is inspired by the concern that the acquisition of Autotalks by Qualcomm could lead to a reduction of competition in the V2X technology market. See the authority’s communication here.