Bundeskartellamt imposes fines against Schlecker

The Bundeskartellamt has imposed fines against Anton Schlecker (“Schlecker”) for violating the ban on sales below cost price. This particular case involves the offer of digital photo processing services below Schlecker’s cost prices. Schlecker has repeatedly at least failed to carry out supervisory measures to prevent its staff from violating the ban on sales below cost price. According to the Act against Restraints of Competition an unfair hindrance of competition exists if companies with superior market power sell their goods or services not merely occasionally below their cost prices, unless there is an objective justification for this.

Bundeskartellamt President, Dr Böge: “It is not a matter of protecting the existence of small and medium-sized companies but about fair practices in competition. If sales below cost price were allowed to squeeze competitors out of the market, competition would be brought to a standstill in the medium term. As a result the large companies remaining in the market would gain greater leeway for raising prices, for which consumers would have to pay dearly”.

The subject of the proceedings were periods between April and October 2004, during which Schlecker nationally advertised special offers for its digital photo processing services. The investigations of the Bundeskartellamt have shown that these offers were below Schlecker’s cost prices. Neither were they occasional offers. Whereas the first offer was for a period of 11 weeks, the second and third offers in September and October 2004 were only for 3 weeks at a time. However, as only one week lay between these offers, customers were given the impression that Schlecker had special and lasting price competence in digital photo processing, which indicated that this was to not to be seen as a merely occasional offer of services below cost price.

As there are small and medium-sized photo shops in all of the regional geographic markets and the effects of the violations were not limited to only a few regional markets but unfairly hindered Schlecker’s competitors nationwide, the Bundeskartellamt decided to impose fines against the company. The order to impose the fines is now final.