European Union: To Whom Are You Announcing? EU Authorities Focus On Price Signaling

Last Updated: 2 June 2014
Article by Matthew Hall

Price signaling has long been a concern under competition law in the EU, but there have not been many cases in the area.

This changed recently, with regulators looking at the issue in three high-profile cases in three different sectors. The cases come from the UK (Competition Commission) ("CC")1, the Netherlands (Authority for Consumers & Markets) ("ACM") and the European Commission ("EC").

The EC's case is currently open and concerns the container liner shipping sector2. The Dutch case from the ACM was a commitments (or "settlement") case concerning the mobile phone sector, which was closed with a decision on 7 January 20143. The UK case from the CC (now Competition & Markets Authority ("CMA")) was a "market investigation" into the cement sector, which concluded on 14 January 20144.

EC container shipping case

This case was initiated in May 2011 with dawn raids by the EC at the premises of companies active in container liner shipping in several Member States. At that time, the EC simply indicated that it had reason to believe that the companies had violated the EU antitrust rules.

The EC's 22 November 2013 press release made it clear that this is a signaling case (a first before the EC). The EC is concerned that the parties are signaling future price intentions to each other. If proven, this is likely to be seen and fined as a cartel.

Specifically, the EC is concerned about public announcements (as opposed to private letters to individual customers) with very similar timings, increases and dates of implementation. Of most difficulty for the parties will probably be the public nature of the announcements. Even if bunker fuel costs drive the increases, why do they need to be publicly-announced? Are they "testing" each other's prices and pushing each other to align?

The EC is not relying on the parties having reached an agreement as such, but on this being a "concerted practice". A concerted practice can give rise to an infringement of EU competition law in the same way as an agreement, but the EC will have to prove several specific factors if it wishes to proceed with its case. The parties will be hoping that, in addition to the simple coincidence of timing and amounts, there are no contacts which might assist the EC in proving an infringement.

Although the EC could rely purely on uniform or parallel conduct, its case will be stronger if there has been direct or indirect contact between the parties. If the case is purely based on uniform conduct, the parties could defeat it by showing a plausible alternative explanation. Although every situation is different and these cases are highly fact-specific, the type of announcements allegedly used in this case is common. Companies in a range of industries should watch it closely.

ACM mobile phone case

The Dutch case appears, by comparison with the public facts of the EC's case, to be a clearer infringement. It concerns companies "dipping their toe in", in other words preannouncing pricing or commercial plans without having committed to implementation.

In this case, the operators had made statements at conferences and in the trade press which, according to the ACM, created antitrust risk. Specifically, the following took place:

  • a KPN employee announced at a conference in 2008 that the company was planning to reintroduce connection fees, even though there had not been an internal decision to do that; and
  • a KPN employee announced price changes due to inflation in an interview for a trade magazine.

The ACM did not need to prove infringements of competition law, since the parties in effect settled the case (without admitting infringements). However, the ACM's concern was clear; it indicated that public statements about future market behaviour, which operators are aware would be seen by their competitors, and where no final decision had been taken, carry antitrust risks since they "reduce strategic uncertainty". These public statements led to a situation in which the parties might coordinate.

In the face of this evidence, the companies backed down and agreed to change their practices. Specifically, they agreed to refrain from making verbal or written public statements about pricing or commercial plans before there has been an internal decision on the move. In addition, the companies promised to incorporate this commitment into their compliance programmes and to give it special attention in employee training workshops. As with the EC investigation, this case holds lessons for other industries. Indeed, the ACM has expressly made this point. Other companies can therefore consider themselves warned; transparency can go too far.

UK cement case

The UK cement case is different, but nevertheless provides another example of regulatory concern about price signaling, and sets out how the regulator analysed the issues.

This was a general investigation into the Great Britain ("GB") markets for aggregates, cement and ready-mix concrete ("RMX"). The CC was not considering specific allegations about coordination or similar behaviour between companies, but had been asked to analyse the structure of these markets.

The CC found that the structure of and conduct in the cement sector restrict competition by aiding coordination between the three largest producers, which results in higher prices for all cement users. These three producers had refrained from competing vigorously with each other by focusing on maintaining market stability and their respective shares.

In addition to structural remedies, the CC put in place behavioural remedies. This includes a prohibition on GB cement suppliers from sending generic price announcement letters to their customers. Instead, any future price announcement letters will have to be specific and relevant to the customers receiving them.

The CC did not propose a mandatory template for customer-specific price announcement letters, but stated that a customer-specific price announcement letter should specify: (a) the name of the customer and the effective date of any price change; (b) the current (or last) unit price paid by the customer; (c) the new unit price being proposed; and (d) details of any other changes that affect the overall price paid.

The intention behind this is to reduce market transparency. The CC had found that the top 3 cement producers "appeared to be signalling that they would try to accommodate the others' price increases in many cases". The CC considered that a prohibition on generalized or generic price announcement letters would remove one means by which the GB cement producers were able to signal price increases to each other. In particular, it would bring about a change in the manner and possibly timing by which the GB cement producers communicated with their customers5.


Competition risk from signaling (principally signaling in price announcement letters) is often seen as theoretical. These cases show that it is not and that compliance programmes need to treat it seriously. They also provide good examples for compliance training sessions.

These cases reinforce some general messages about the use of price announcements. First, public announcements will be treated with suspicion. Second, announcements which are similar will be treated with suspicion; companies must take an independent view, but should also document their internal decision making (without referencing competitors). Third, companies should not pre-announce if a decision has not been made and should not pre-warn customers. Fourth, a significant gap between announcement and implementation is not helpful; the period should be commercially-justified and customer-driven. Fifth, generic price announcements referring to a figure will be treated with suspicion; it is better not to identify a figure at all.

This is not an exhaustive list of issues around price announcements. It provides a good starting point, but the individual industry and its particular situation must be analysed.


1 The CC was abolished and replaced by the Competition & Markets Authority ("CMA") on 1 April 2014.

2 EC press release IP/13/1144, "Antitrust: Commission opens proceedings against container liner shipping companies", available at .

3 ACM press release, "Investigation into mobile operators concluded", available at The decision is available only in Dutch.

4 CC press release, "CC to create new cement producer", available at

5 The cement sector may shortly produce another example of remedies to control the use of price increase letters. It has been reported by MLex (6 and 21 May 2014) that the EC is considering settling its investigation into certain cement companies in returning for them agreeing to shorten the time period between when prices are announced and when they go into effect. The EC opened its formal investigation in this case in December 2010, see

Previously published on "Hot Topics" in International Antitrust Law

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions