According to insiders, the visit of the EU competition watchdog to Red Bull is likely related to the company’s market power. This is also evident from the fact that house searches have only taken place at Red Bull. In classic cartels and price fixing, raids on several companies usually take place simultaneously. It is considered likely that the authority has received indications of antitrust violations. Competitor Monster Energy welcomed the research.
In principle, the EU Commission can initiate investigations or follow up on information and complaints on its own initiative. In Tuesday’s press release, the Commission referred to both Article 101 (cartel formation) and Article 102 (abuse of market power). It is not known whether there is a key witness in the investigation.
House searches in several countries
Red Bull and the EU competition authority have so far been reluctant to provide information. Red Bull confirmed on Tuesday that it had received a visit from EU officials and employees of the Austrian Federal Competition Authority (BWB) and stressed that it was cooperating with authorities. The raids began on Monday and took place in multiple European countries, not just at the headquarters in Salzburg’s Fuschl am See.
According to a report by specialist service MLex, the allegations center around Red Bull’s dealings with retailers and that the company may have sought favorable treatment for its own drinks to the detriment of its competitors. Red Bull is number one in Europe for energy drinks, but faces competition from other manufacturers looking to gain market share.
Monster Energy: “Consumers Deprived of Benefits of Our Core Offering”
The biggest competitor is Monster Energy from the US, which welcomed the cartel investigations against Red Bull in a statement. “We believe that Red Bull’s deliberate use of anti-competitive tactics unfairly deprives consumers of the benefits of our core offering. We are therefore not surprised that the European Commission has opened an investigation and we support their investigation,” the company, in which Coca-Cola has an interest, said on Tuesday.
Similar to Apple studies
It is not unusual for European Commission investigations to focus on just one company, especially when it comes to allegations of abuse of market power. Current examples of this are the investigations against Apple, which have consequences for the App Store and Apple Pay.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
