Klöckner allowed to launch digital platform for steel products

The Bundeskartellamt has no objections to plans by Klöckner & Co SE, Duisburg to set up the business to business online trading platform "XOM Metals" for the sale of steel products. After talks with the Bundeskartellamt, Klöckner modified its original plans so that the project no longer raises any competition concerns.

Andreas Mundt, President of the Bundeskartellamt: "The offer of a digital business to business trading platform for steel products will simplify order transactions and order management. However, an excess of market transparency can make agreements easier or even unnecessary if conclusions can be drawn about the future pricing strategy of individual traders. After the modifications made by Klöckner on our initiative, we now estimate this risk as relatively low. In its current form the planned operation of the platform as a unit which is organisationally independent of the Klöckner group will not create any further price transparency in the market."

Both steel manufacturers and traders are to operate as suppliers on the platform. Both groups are to some degree competitors of Klöckner. With two subsidiaries Klöckner itself will also be active on the platform as a supplier. In addition, Klöckner will continue to operate its own online shop. The platform is primarily intended for existing customers of the suppliers but it is also to offer new customers easy access to the market via the online marketplace.

The offer of steel products via an electronic trading platform will however also increase transparency, which can make agreements easier or even unnecessary if conclusions can be drawn about the future pricing strategy of individual traders. This applies to both the suppliers competing with one another as well as to the connection between the company group and the operator, the Klöckner group. However, in accordance with indications given by the Bundeskartellamt, Klöckner has designed the platform in such a way that no anti-competitive exchange of information on prices or product availability will take place on the platform. Prices will only be visible on the platform after a customer has logged in. Any new customers will only be able to see a supplier's price once they have logged in and identified themselves with their VAT number. Furthermore, Klöckner has improved the organisational separation between the operator of the platform and the Klöckner group. This will ensure that no potentially sensitive market and company data are exchanged between the platform operator and the rest of the Klöckner group.

Against this background and within its scope of discretion, the Bundeskartellamt has decided not to raise any objections to the launch of the trading platform.