FCO guidance on B2B platforms: launch of digital agricultural platform approved

Introduction
FCO guidance
Comment

Introduction

The Federal Cartel Office (FCO) has raised no objections to the launch of 'Unamera', a digital trading platform for agricultural products. Unamera is intended to facilitate future trade, especially of grain and oilseeds, between agricultural trading companies and farmers and processors.

During the review, the FCO provided guidance on the competition law implications of digital platforms, specifically with regard to:

• the obligations if shareholders are active in the same market as the platform's users;
• the market statistics published on these platforms; and
• the risk of price fixing.

FCO guidance

The FCO asserted that digital platforms may generally serve trade efficiency; however, first they must comply with competition law. According to the FCO, this means that:

• platforms must not be used for price fixing between competitors;
• platforms must not have a discriminatory effect;
• transparency must not be excessive;
• the FCO will pay particular attention to the type and scope of the exchange of information, particularly the construction of so-called 'Chinese walls'; and
• any publication of market statistics must comply with the standards already established by the FCO.

Obligations where shareholders are active in same market as platform users
If a platform's shareholders are active in the same market as its users, the FCO clarified that these shareholders must not have access to relevant data from competitors. To ensure that there will be no such exchange of critical information, the platform must operate separately from these shareholders in personnel, organisational, technical and information terms. Shareholders who are active in the same market may not exercise their general right to access such information.

Market statistics
Regarding the creation or publication of market statistics, the FCO referred to the general standards for tools such as benchmarking (eg, average prices originating from at least five independent companies must be published).

Preventing price fixing
In order to protect a platform from being used for price fixing, prices are initially displayed anonymously before the identity of the contractual partner is disclosed in the last step before the contract is concluded.

Comment

If the FCO investigates a merger, the proceedings are different because the FCO must comply with merger control deadlines. In the present case, the parties approached the FCO not with a view to a merger, but rather to discuss the FCO's potential concerns regarding a cartel prohibition. In this scenario, no deadlines apply and the FCO is not even obliged to deal with such requests. However, under certain circumstances, this kind of application could be in the FCO's interests, especially if it concerns new topics such as digital platforms. The FCO president has emphasised that companies often make use of this opportunity to discuss issues with the FCO before implementing such platforms.(1)

For further information on this topic please contact Sascha Dethof at Fieldfisher (Germany) LLP by telephone (+49 211 950 749 0) or email (sascha.dethof@fieldfisher.com). The Fieldfisher (Germany) LLP website can be accessed at www.fieldfisher.com.

Endnotes

(1) In February 2018 the FCO published a case summary for the steel trading platform XOM-Metals. Parties intending to start B2B platforms can find further guidance in this case summary (available in German) and the FCO's "Working Paper - Market Power of Platforms and Networks".