I697- RECYCLING OF USED BATTERIES
PRESS RELEASE
PRESS RELEASE
ENVIRONMENT: ANTITRUST AUTHORITY OPENS INVESTIGATION INTO LEAD BATTERY CONSORTIUM OVER ANTI-COMPETITIVE ARRANGEMENT
The Consortium is alleged to have denied entry to new operators in the treatment, disposal and recycling of lead-acid batteries
The Italian Competition Authority, at its meeting on 24 January 2008, decided to launch an investigation into COBAT, the Consortium for Used Batteries and Lead Waste, over a possible anti-competitive arrangement.
In the Authority's view, the contractual provisions imposed by COBAT on collection and waste-disposal companies would seem to limit competition among operators, giving rise to a system of rules that may affect the market in numerous ways.
Specifically, in its contracts with disposal companies, COBAT defines the number of recyclable batteries to be assigned to each operator and stipulates that the number of batteries sold to each by COBAT be reduced by the number of batteries purchased directly or received from third parties even on a piecework basis. There is also a system of “penalties”, should the disposal company fail to advise that it has purchased or received batteries from third parties. In this way, the disposal companies have no economic incentive, given the prospect of a reduction in their income, to handle batteries offered by third parties.
In addition, the conditions stipulated in the contract with collection companies would seem to be intended to create what is in effect an exclusive relationship with those companies: there is an express provision that the collection companies must sell their entire stock to COBAT and that they may not operate in competition with the Consortium.
By way of these rules, the Consortium seems to have basically kept the business of treatment, disposal and recycling of lead-acid batteries a closed shop, preventing the entry of new operators. The Consortium, with respect to all other operators, can also count on the competitive advantage of financing from the so-called battery sale surcharge: the law stipulates that this surcharge must be advanced quarterly to COBAT by all manufacturers and importers of lead-based batteries, as well as by importers of other products containing lead; the latter may then pass this extra charge on to the purchasers of their products.
The Authority's action was also taken in the light of a number of complaints received from other operators in the industry and from ANIE, the National Federation of Electrical and Electronic Industries, claiming that COBAT's conduct causes economic harm to the manufacturers of batteries who are instead interested in having disposal companies compete so as to purchase the second-hand lead or, as an alternative, they would like to be able to consign recyclable batteries to the disposal companies for treatment at prices that reflect the true cost of their work. In this manner, they could reduce their own manufacturing costs with possible downstream benefits for consumers.
Rome, 30 January 2008