Federal Cartel Office Imposes Millions in Fines Against Tire Dealers for Price-Fixing

What the Authorities Specifically Have Before Them

The competition watchdogs accuse the addressees of having interfered with retailers' sales prices through so-called margin guarantee agreements. Such agreements guaranteed wholesalers a specific margin per tire sold and contained specifications for sales prices – a practice that, in the authority's assessment, curtailed retailers' freedom to set prices.

Andreas Mundt, President of the Cartel Office, stated that margin guarantee agreements are anticompetitive "wenn sie – wie hier – Vorgaben für die Verkaufspreise der Händler enthalten und damit deren Preissetzungsfreiheit einschränken". He also emphasized: „Das Bundeskartellamt verfolge diese seit Anfang der 1970er Jahre verbotenen Praktiken konsequent."

Mundt: Practice Banned for Decades

Vertical price-fixing – i.e., agreements between manufacturer, importer and dealers on end-customer prices – has been prohibited in Germany since the early 1970s. Mundt pointed out that this practice regularly works to the detriment of consumers. The authority views this as an interference with competition that can result in higher end prices for end customers.

The fines are distributed among the three named companies and one natural person who is alleged to have been involved in the cartel violations as a responsible individual. The authority did not publish a detailed breakdown of the total amount of €11.9 million among the individual addressees in the present communication.

Cooperation and Amicable Conclusion

The Federal Cartel Office considered it mitigating that Maxxis and B4T Berlin cooperated in clarifying the facts. Both companies cooperated with the authority and thus contributed to establishing the facts – a circumstance that, it said, was taken into account in determining the amount of the respective fine.

According to the Federal Cartel Office, Maxxis and Reifen Müller also consented to an amicable conclusion of the proceedings. This means that these two addressees accepted the outcome of the proceedings without pursuing lengthy litigation. For B4T Berlin and the co-accused responsible individual, no such amicable conclusion is indicated in the available information.

Legal Remedies and Jurisdiction

The penalty notices are not yet final. Those affected may file objections within the statutory deadlines; any potential legal remedies would then be decided by the Higher Regional Court of Düsseldorf, which has jurisdiction as the court of first instance for cartel law penalty proceedings.

According to the authority, the agreements now sanctioned concerned exclusively the German wholesale market for the Maxxis and CST brands. Private customers were not directly addressees of the price-fixing but may have been indirectly affected through higher workshop or retail prices.

The proceedings are part of an entire series of interventions by the Federal Cartel Office against vertical price-fixing in recent years. The authority has previously imposed fines in other industries against manufacturers and dealers who had attempted to enforce minimum or fixed prices.

The Taiwanese parent company Cheng Shin Rubber Ind. Co. Ltd. is, according to the available information, not an addressee of the fines. According to the Federal Cartel Office, responsibility for distribution in Germany lies with the local sole importer Maxxis International GmbH and the involved wholesalers.