Germany: Higher Regional Court Of Düsseldorf Overrules Decision On EDEKA's "Wedding Rebates"

On 18 November 2015, the Higher Regional Court of Düsseldorf (the "Court") annulled a decision issued by the German Federal Cartel Office ("FCO") on 3 July 2014, which held that the supermarket chain EDEKA had abused its market position by prompting four suppliers of sparkling wine to grant it discounts – so-called "wedding rebates" – and contractual benefits following EDEKA's takeover of the supermarket chain Plus in 2009 (see VBB on Competition Law Volume 2014, No. 7, available at www.vbb.com).

In 2014, the FCO found that, whilst not being dominant, EDEKA's market position on the procurement market in the food retail sector was strong enough for its suppliers to be economically dependent on EDEKA. On appeal, the Court concluded that the "wedding rebates" were the result of negotiations between almost equally powerful parties. According to the Court, as a full-range provider, EDEKA is dependent on the goods of the suppliers. Due to the prominence of their brands, these goods are considered to be "must-stock" products and the concrete market power of EDEKA is therefore opposed by the countervailing power of the suppliers.

The Court found that the commercial negotiation process, which included claims and counterclaims, indicated that the parties were of approximately equal power. All suppliers of sparkling wine were able to negotiate weighty counter-demands and substantially reduce the initial demands of EDEKA.

In addition, the Court found that some of the accusations against EDEKA were based on inaccurate facts. For example, the Court found that, contrary to the assumption of the FCO, EDEKA did not unilaterally impose improved payment targets on the suppliers, but rather made new payment targets dependent on the approval of the suppliers of sparkling wine, and entered into negotiations after the suppliers expressed objections.

The decision of the Court is not final and may be appealed to the German Federal Court of Justice.

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