OTIS-KONE ITALIA-SCHINDLER
PRESS RELEASE
PRESS RELEASE
The Authority has opened an investigation into the Otis, Kone and Schindler in respect of alleged offences against Sections 2 and 3 of the Antitrust Act (which prohibit, respectively, agreements which restrict competition and abuse of a dominant position) on the following markets: lift maintenance, and spare parts for lifts.
These three multinational corporations hold a preponderant share not only of the lift manufacture and installation market, but also the lift maintenance market. Even though the latter market is highly fragmented (with over 1,000 companies serving it), it is nevertheless conditioned by the behaviour of large corporations.
Many small companies operating on the lift maintenance market have complained to the Authority of the difficulties caused by the conduct of the three multinationals under investigation. They allege that they refuse to provide user and maintenance manuals to their customers or to supply spare parts to independent maintenance companies. Customers purchasing lifts requiring maintenance work are therefore obliged to seek the maintenance services of the companies which installed them. The independent companies have also complained that when the multinationals install the lifts, they conclude multi-year maintenance contracts with the lift users, with tacit renewal clauses and heavy penalties for advance cancellation.
It is therefore possible that each of these three corporations involved in the investigation occupy a dominant position on the market for the supply of spare parts for their lifts, and may have abused that position by introducing measures likely to restrict competition on the lift maintenance market (an offence against Section 3 of the Antitrust Act). The latter is a very attractive market to lift companies because of the large number of lifts in operation (about 650,000), which are subject to regular statutory maintenance, and in view of the low current demand for new lifts.
Since the conduct described above seems to be the standard practice of all three major lift manufacturing corporations, the Authority considers that the identical and simultaneous nature of this conduct might be the result of a horizontal coordination of the strategies being implemented by Otis, Kone and Schindler, suggesting the existence of an agreement or concerted practices, infringing Section 2 of the Antitrust Act, and has therefore decided to institute an investigation into this matter.
Rome, 2 March 1999