Swiss Competition Commission accuses cosmetics industry of operating a cartel

By Simon Pitman

- Last updated on GMT

Related tags Cartel

The Swiss Competition Commission, Comco, has accused fragrance and cosmetic makers, manufacturers and suppliers in the country of operating a cartel.

The watchdog claims that the industry is shutting out outside competition by exchanging information through the trade association Ascopa, essentially sealing the market off from non-member competitors.

Ascopa is the leading industry association in Switzerland and has approximately 40 members on its books, with more than 180 market-leading brands including names such as Chanel, Estee Lauder, L’Oreal, Yves Saint Laurent and Dior.

According to Comco deputy director, Patrik Ducry, the Commission was first alerted to the Ascopa membership activity back in 2008, which led to an investigation revealing that the market information exchange had begun back in 2002/2003.

Ascopa members banned from exchanging sensitive information

In view of this, Comco has taken the decision to ban Ascopa and its members from exchanging sensitive market information that might exclusively benefit its members, while blocking out any other competition.

Comco accuses Ascopa of consorting on marketing rates, sales, advertising and general business conditions, stating that this kind of activity is contrary to the Swiss anti-trust laws, in turn allowing companies to adapt their market strategies around one another.

This behaviour led to a ‘significant restriction of competition’ within the country’s cosmetics and fragrance market, Comco claims, leading to a complete ban on the covert exchange of information within Ascopa from 31 October 2011.

Although the Swiss law does not sanction fines or any other type of fiscal penalty for this kind anti-competition strategy, the companies in question do run the risk of being sanctioned if they continue to violate Comco’s ban on information exchange after this date.

Cartel have also been discovered in France, Spain and Italy

Over the past few years, several similar cartels have been discovered in other European countries, including France, Spain and Italy.

In March of this year the Spanish National Competition Commission hit the local operators of Procter & Gamble and L’Oreal with multi-million Euro fines over price fixing of professional hair care products in Spain.

The anti-trust authority fined a total of eight companies operating in the salon professional sector, for their involvement in what the commission refers to as a cartel.

The body is also fined industry association the National Association of Perfume and Cosmetics, claiming that it also played a key part of the cartel.

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