Bundeskartellamt prohibits joint participation by Rethmann and Tönsmeier in Gesellschaft für Abfallwirtschaft Köthen

The Bundeskartellamt has prohibited the joint participation of Rethmann Kommunale Dienste Nord GmbH (“Rethmann”) of the Rethmann group and Tönsmeier Entsorgungsdienste GmbH (“Tönsmeier”) in Gesellschaft für Abfallwirtschaft Köthen (“GfA Köthen”) both under merger law and under Section 1 of the ARC. At the same time the Bundeskartellamt has ascertained that in the tender to privatise GfA Köthen the previous formation of a bidding syndicate on the part of Rethmann and Tönsmeier was already in violation of Section 1 of the ARC. GfA Köthen, a joint undertaking of the District and City of Köthen (Saxony-Anhalt), is active in various disposal markets, especially in the market for the collection and transport of residual waste, waste paper and other types of waste.

According to the Bundeskartellamt’s findings the notified merger would have strengthened a dominant oligopoly in the markets for the collection and transport of residual waste and waster paper in a geographic area of approx. 100 km surrounding the District of Köthen. In this case the Bundeskartellamt firstly examined in depth the market conditions in the markets for the collection and transport of waste in the new Länder. It was found that also with regard to tenders in the new Länder only those bids are likely to be successful which are submitted by companies which already have a branch within a certain geographic vicinity to the place of tender and which can thus generate synergy effects. According to the findings in the case at hand the geographic market spans all administrative districts within approx. 100 km of the area covered by the tender, i.e. the District of Köthen. In this relevant geographic market, which comprises approx. 41 per cent of all inhabitants in the new Länder whose household waste is collected and transported by private or mixed-economy disposal companies, four companies – Rethmann, RWE Umwelt, Sita and Alba - together hold a good 75 per cent of the market shares for the collection and transport of residual waste and 74 per cent for waste paper. Both the market and company-related structural factors as well as the actual competitive behaviour observed show that these four companies constituted a dominant oligopoly even prior to the notified merger. The dominant position of this oligopoly would have been further strengthened by the joint acquisition of GfA Köthen and the integration of Tönsmeier into the oligopoly. Together GfA Köthen and Tönsmeier hold an approx. 10 per cent share of the residual waste market and 5 per cent of the waste paper market.

Furthermore, both the formation of a bidding syndicate by Rethmann and Tönsmeier and the formation of a joint venture constitute illegal anti-competitive agreements within the meaning of Section 1 of the ARC. As a result of the formation of the bidding syndicate only one joint bid was submitted in the tender to privatise GfA Köthen instead of two independent bids. The bidding syndicate cannot be justified by the partnership concept either, as in this case Rethmann, the second-largest German waste disposal company, and Tönsmeier, a well-established medium-sized enterprise, would both have been able to submit an independent bid. According to the Bundeskartellamt’s evaluation Rethmann and Tönsmeier would have coordinated their competitive behaviour in the relevant geographic market after the merger as a consequence of the formation of the cooperative joint venture.

The decision can be appealed against before the Düsseldorf Higher Regional Court. The wording of the decision will soon be available at www.bundeskartellamt.de.