EU probes Omya’s paper additives practices

The European Commission has opened a formal antitrust investigation into Swiss company Omya over its supply conditions for calcium carbonates to the paper industry. The case centres on whether Omya breached EU competition rules by requiring paper-industry customers to purchase all or most of their calcium carbonates from the company, and by granting rebates that encouraged such concentration of demand.

Omya is the largest supplier of calcium carbonates in the European Economic Area and may hold a dominant position in that market segment. Calcium carbonates are an important input in the paper manufacturing process, used as fillers and coating pigments that can reduce production costs and improve the brightness, opacity, smoothness and printability of paper and cardboard.

The investigation focuses on two types of practices: exclusive purchasing obligations and exclusivity rebates. Exclusive purchasing obligations are alleged arrangements under which customers in the paper industry are required to obtain all or most of their calcium carbonates from Omya.

Exclusivity rebates are financial incentives that may have rewarded customers for sourcing all or most of their calcium carbonates from Omya. The Commission is examining whether these arrangements formed an exclusionary strategy that limited the ability of other calcium carbonate suppliers to compete effectively for paper-industry customers within the European Economic Area.

The Commission has expressed concern that the conduct under scrutiny may have restricted competition in the European paper industry by constraining rival suppliers’ access to customers. Competitive and affordable supplies of calcium carbonates are considered important for paper mills, as they can help reduce input costs and ultimately affect pricing and quality for consumers of paper and cardboard products, including packaging that can substitute for single-use plastic packaging.

If the practices being examined are proven, they may infringe EU competition rules that prohibit abuse of a dominant position under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement. These provisions aim to prevent conduct that affects trade and restricts competition within the Single Market.

The Commission will now conduct an in-depth investigation into Omya’s conduct as a matter of priority. The opening of formal proceedings does not prejudge whether an infringement has occurred. There is no legal deadline for completing antitrust investigations of this kind, and their duration can depend on the complexity of the case, the level of cooperation from the companies involved and the exercise of rights of defence.

Under Regulation 1/2003, once the Commission opens proceedings, national competition authorities are relieved of their competence to apply EU competition rules to the practices under investigation. National courts must also avoid adopting decisions that would conflict with any decision the Commission may contemplate in the ongoing case. The investigation has been registered under case number AT.40893.