Antitrust: Commission renders legally binding commitments from Rio Tinto Alcan

Brussels, 22-12-2012 — /europawire.eu/ — The European Commission has adopted a decision that renders legally binding the commitments offered by Rio Tinto Alcan to address concerns raised by the Commission about competition on markets for aluminium smelting equipment. The Commission was concerned that the company may have infringed EU antitrust rules by contractually tying the licensing of its leading Aluminium Pechiney (“AP”) smelting technology to the purchase of handling equipment (namely, pot tending assemblies or “PTAs”) from its subsidiary Electrification Charpente Levage (“ECL”). PTAs are specialty cranes used in aluminium reduction plants (smelters) where primary aluminium is produced. Rio Tinto Alcan committed to modify its future technology transfer agreements so as to enable licensees of its AP technology to purchase PTAs from any recommended supplier.

Joaquín Almunia, Commission Vice-President in charge of competition policy commented: “With today’s commitments we have achieved a far-reaching solution to the concerns raised by the Commission. Rio Tinto Alcan’s commitments will open up the market for equipment used in aluminium smelters. As a result, the customers of aluminium technology and equipment will have more choice.”

The Commission had concerns that Rio Tinto Alcan’s contractual tying of the equipment to the technology could result in an infringement of EU antitrust rules that prohibit restrictive business practices and the abuse of a dominant market position. The Commission took the preliminary view that Rio Tinto Alcan has substantial market power, to the point that it may be a dominant firm, on the market for the licensing of aluminium smelting technology. The tying of this technology to the sale of PTAs could lead to higher prices, hamper innovation and shut out competitors from the market for this type of equipment.

To address these concerns, Rio Tinto Alcan offered commitments. The commitments introduce an objective and non-discriminatory process for selecting qualified suppliers of PTAs. Users of Rio Tinto Alcan’s technology will then be able to choose among the recommended suppliers. Rio Tinto Alcan will provide competing PTA suppliers with the necessary technical specifications to ensure that their PTAs are capable of operating in smelters using AP technologies. Compliance with these commitments will be monitored by an independent expert. After market testing an initial commitments’ proposal in August 2012 (see IP/12/896), the Commission concluded that the final commitments offered by Rio Tinto Alcan (which introduced several improvements in response to some requests raised during the market test) are suitable to address its competition concerns.

Background

Following a complaint by the crane manufacturer Réel, the Commission opened an investigation over Alcan’s practice of contractually tying the license of its leading AP aluminium smelting technology to the purchase of pot handling equipment from its subsidiary ECL. The Commission had concerns that this behaviour might infringe EU antitrust rules (Articles 101 and 102 of the Treaty on the Functioning of the European Union – TFEU – and Articles 53 and 54 of the EEA agreement). In February 2008, the Commission sent a statement of objections to Alcan (see MEMO/08/111).

In reply to the Commission’s preliminary assessment, Rio Tinto Alcan offered commitments. In August 2012, the Commission consulted stakeholders on these commitments (see IP/12/896). Rio Tinto Alcan subsequently proposed a number of modifications in these commitments in order to address several issues raised during the market test. Today’s decision makes the commitments offered by Rio Tinto Alcan legally binding and ends the Commission’s investigation.

If Rio Tinto Alcan were to breach its commitments, the Commission could impose a fine of up to 10% of Rio Tinto Alcan’s total turnover without having to prove a violation of EU competition rules.

More information is available on the competition website in the Commission’s public case register under the case number 39230.