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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