Following complaints by two single-serve coffee capsule makers,
the French Competition Authority (FCA) recently launched a market
test relating to undertakings proposed by Nespresso with respect to
single-serve coffee capsules. As a market leader for both coffee
machines (73 percent market share) and for Nespresso-compatible
coffee capsules (85 percent market share), the FCA was concerned at
the risk of foreclosure of Nespresso's competitors. First,
Nespresso could have rendered its competitors' capsules
incompatible by not publishing details of technical updates of its
machines. Second, Nespresso could abuse its dominant position by
pushing consumers to use only Nespresso-branded capsules through
various means, including the media, its "Nespresso Club,"
labeling/branding on its machines or in Nespresso's guarantee
terms and user guides.
In response to the FCA's concerns, on April 17, 2014,
Nespresso offered commitments, to be enforced for seven years, as
part of which the company will communicate technical updates to any
third-party capsule maker that requests them, three months before
implementation. Nespresso also will refrain from dissuading
customers from using competing capsules in the press or through
"Club Nespresso," and will amend its guarantee terms.
The market test ended on May 19, and the FCA's conclusions
are expected soon.
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