The Bundeskartellamt has lodged an appeal on points of law at the Federal Supreme Court against the decision of the Higher Regional Court Düsseldorf in the WalMart abuse proceedings.  On 1 September 2000 the authority prohibited WalMart, Aldi-Nord and Lidl from selling certain basic foods (i.a. milk, sugar, vegetable fat) below their respective cost prices (Section 20 (4) sentence 2 of the ARC).  WalMart was the only company to appeal against this decision before the Higher Regional Court Düsseldorf which finally acknowledged WalMart’s appeal.

The Bundeskartellamt has lodged an appeal on points of law at the Federal Supreme Court against the decision of the Higher Regional Court Düsseldorf in the WalMart abuse proceedings.  On 1 September 2000 the authority prohibited WalMart, Aldi-Nord and Lidl from selling certain basic foods (i.a. milk, sugar, vegetable fat) below their respective cost prices (Section 20 (4) sentence 2 of the ARC).  WalMart was the only company to appeal against this decision before the Higher Regional Court Düsseldorf which finally acknowledged WalMart’s appeal.

The President of the Bundeskartellamt, Ulf Böge, stated: “As the decision by the Higher Regional Court shows in most points, the statutory ban on selling below cost price applies. The Bundeskartellamt’s principles of interpretation regarding this provision have also been confirmed for the most part by the grounds given by the court. There is thus no need for the law to be amended or tightened.  WalMart was successful in this particular case because it was able to refute in court the accusation of selling below cost price on the basis of new facts.”

As far as dairy products were concerned, it was established during the oral proceedings that WalMart matched competitive prices of its rivals Aldi-Nord and Lidl. Consequently, selling below cost price was objectively justified.  Equally under Bundeskartellamt guidelines, matching competitive prices can justify selling below cost prices. With regard to vegetable fat the court considers it as established that the cost prices WalMart had to pay had been forced up artificially by third parties. Therefore the court did not accept them as cost prices within the meaning of Section 20 (4) sentence 2 of the ARC.

The Higher Regional Court Düsseldorf generally confirmed that WalMart has superior market power over small and medium-sized competitors. Moreover it established that the product sugar was sold below cost price which cannot be objectively justified.  According to the court’s estimation, however, this violation did not have an “appreciable” anticompetitive effect. The court has added an unwritten criterion, i.e. “appreciability”, to the preconditions of Section 20 (4) sentence 2 of the ARC. Böge stated: "The Bundeskartellamt does not go along with this restrictive interpretation of the ban on inadmissible sales below cost price. The very goal of the lawmaker when introducing the provision in 1999 was to facilitate the application of the ban.  We therefore deem it necessary that the Federal Supreme Court establishes conclusive clarification in this matter.”

The President of the Bundeskartellamt, Ulf Böge, stated: “As the decision by the Higher Regional Court shows in most points, the statutory ban on selling below cost price applies. The Bundeskartellamt’s principles of interpretation regarding this provision have also been confirmed for the most part by the grounds given by the court. There is thus no need for the law to be amended or tightened.  WalMart was successful in this particular case because it was able to refute in court the accusation of selling below cost price on the basis of new facts.”

As far as dairy products were concerned, it was established during the oral proceedings that WalMart matched competitive prices of its rivals Aldi-Nord and Lidl. Consequently, selling below cost price was objectively justified.  Equally under Bundeskartellamt guidelines, matching competitive prices can justify selling below cost prices. With regard to vegetable fat the court considers it as established that the cost prices WalMart had to pay had been forced up artificially by third parties. Therefore the court did not accept them as cost prices within the meaning of Section 20 (4) sentence 2 of the ARC.

The Higher Regional Court Düsseldorf generally confirmed that WalMart has superior market power over small and medium-sized competitors. Moreover it established that the product sugar was sold below cost price which cannot be objectively justified.  According to the court’s estimation, however, this violation did not have an “appreciable” anticompetitive effect. The court has added an unwritten criterion, i.e. “appreciability”, to the preconditions of Section 20 (4) sentence 2 of the ARC. Böge stated: "The Bundeskartellamt does not go along with this restrictive interpretation of the ban on inadmissible sales below cost price. The very goal of the lawmaker when introducing the provision in 1999 was to facilitate the application of the ban.  We therefore deem it necessary that the Federal Supreme Court establishes conclusive clarification in this matter.”