Economic analysis and evidence in abuse cases – Break-out Session 2 – Techniques and evidence for assessing exclusive dealing and bundling – CHILE – December 2021 OECD discussion
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This presentation by Chile was made during the break-out Session 2, “Techniques and evidence for assessing exclusive dealing and bundling” in the discussion “Economic analysis and evidence in abuse cases” held at the 20th meeting of the OECD Global Forum on Competition on 7 December 2021. More papers and presentations on the topic can be found out at oe.cd/eac.
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Economic analysis and evidence in abuse cases – Break-out Session 2 – Techniques and evidence for assessing exclusive dealing and bundling – CHILE – December 2021 OECD discussion
- 1. CASE: FNE VS. UNILEVER DECEMBER 2021 FISCALÍA NACIONAL ECONÓMICA – CHILE GASTÓN PALMUCCI ANTITRUST DIVISION
- 2. THE CASE 2 Conduct Exclusionary abuses Wholesale Supermarkets • 5 private companies presented their own lawsuits against Unilever Relevant Markets
- 3. INFORMATION SOURCES 3 • Statements: • “they are free to choose but we help them do it” • “it is better for our business to only sell Unilever products” • Emails voluntarily submitted: “¿what is STA?: discounts offered to get exclusivity in certain categories” Main information sources
- 4. MARKET DEFINITION AND DOMINANT POSITION 4 Laundry detergent: Among massive consumption products, detergent has one of the higher price rates. Market share 70% 80% Supermarkets Wholesale Must have brands 70% 26,2% Total sale %
- 5. ENTRY BARRIERS 5 Must have brands: customer fidelity Loyalty discount schemes Incentives for goals compared to total sales - exclusivity No legal or significant infrastructure barriers to entry Marketing costs (6% of total sales)
- 6. INCENTIVES THAT PROMOTE RIVAL´S EXCLUSION 6 Types Retroactive Tailor-made Exclusivity Wholesal e Supermark et Discount Schemes
- 7. INCENTIVES THAT PROMOTE THE EXCLUSION OF RIVALS 7 Rewards Controlled distribution plans Relative turnover growth Facing Wholesal e Supermark et
- 8. TYPE INCENTIVES AND CONDUCTS 8 Conducts were executed repeatedly and for a long period. Unilever held exclusivity agreements with 62% of the wholesale channel, and retroactive rebates with 90%. Unilever held retroactive rebates and rewards on facing with 95% of the supermarket channel. Incentives were tailor-made for each supermarket and distributor.
- 9. TYPE INCENTIVES AND CONDUCTS 9 “…that growth rate is impossible to reach… people would need to have detergent for lunch”. In 2012, Unilever paid incentives as high as 82% of the total sales of the 3rd and 4th operator. Incentives were difficult to meet: 95% of facing structures where held by Unilever through incentive schemes
- 10. SETTLEMENT AGREEMENT 10 Aditional scope of the agreement in supermarkets Time-frame of the agreement 10 years Aditional scope of the agreement in wholesale
- 11. CASE: FNE VS. UNILEVER DECEMBER 2021 FISCALÍA NACIONAL ECONÓMICA – CHILE GASTÓN PALMUCCI ANTITRUST DIVISION