The Italian Competition Authority opens an Article 102 TFEU into Unilever conducts in the market for impulse ice-creams

Following a complaint filed by La Bomba, a small Italian producer of ice lollies, by the decision made on 4 June 2015 the Italian Competition Authority (ICA) opened an Article 102 TFEU investigation against Unilever (Case A484, Unilever/Distribuzione Gelati). Unilever was found to enjoy a dominant position in the market for impulse ice-creams, where it was by far the leading player with a 50% market share with a wide range of products that were household names due to its massive ad caimpagns. The ICA feared that Unilever might have abused its dominant position by imposing in the framework agreements concluded with the trade associations regrouping retailers of ice-creams and in the standard distribution agreements concluded with the single retailers a number of exclusivity clauses and rebate schemes that may foreclose competitors.
First, by freezer exclusivity clauses Unilever committed to make available to retailers freezer cabinets without any charge upon the condition that retailers would not stock in the freezer competitor's products. Incidentally, in the Van den Bergh case the European Commission found that exclusivity freezer clauses imposed by a dominant producer infringed Articles 101 and 102 TFEU. Second, product exclusivity clauses imposed on retailers the obligation to not stock products competing with Algida-branded ice-creams marketed by the Unilever group. Considering that Unilever was an unavoidable trading partner for retailers, since it offered several must have brands, the ICA's concerns were that the above exclusivity clause might foreclosure smaller producers unable to meet all the needs of customers.
Third, the ICA looked at the several rebate schemes. Unilever made the granting of the rebates in such schemes conditional upon the retailers' meeting some obligations or some selling targets. It also believed that they were retroactive rebates. The ICA took the view that the rebates might distort competition. As the rebate are an important source of revenue for trade associations, they may strong incentives to make sure that their members meet the condition for the granting of the rebates. That may strengthen the loyalty-inducing effect of the rebates. That might rise a relevant entry barrier for Unilever's competitors, since retailers might have a strong incentive to buy their needs from Unilevers rather from other suppliers.


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