Bundeskartellamt welcomes planned launch of cement trading platform
The Bundeskartellamt has examined plans for the launch of the digital cement trading platform ECEMENT (www.ecement.pro) in early 2018 and found the project to be unproblematic under competition law. The platform is even expected to stimulate competition on the cement market. It will be operated by eBau.pro Handelsplattformen GmbH which is not attached to the cement industry.
Andreas Mundt, President of the Bundeskartellamt:
"It was important to us that the operator does not use the platform to report on prices achieved in a particular region. In its current form the platform does not raise any competition concerns. On the contrary, it can be expected to stimulate competition in the cement markets. Customers will be able to use the platform as a simple way to find new suppliers. Vice-versa, cement suppliers will be able to find new customers without any additional marketing outlay.”
The platform will be available to all suppliers and purchasers of cement. It can be used to select a supply plant and place an anonymous request for cement deliveries. Prices are determined in an electronic auction. The selected suppliers can monitor the starting price and the periodical price moves in the auction. Once a supplier has accepted the price, the transaction becomes binding and the anonymity is removed. ECEMENT will function as an auctioneer and offer further services, e.g. as an intermediary of consulting services in concrete technology or logistics, and financial clearing (guarantee of payment). The cement supplier will pay a fee for each concluded transaction.
ECEMENT abandoned its original plan to publish price indices or benchmark prices for customers after the Bundeskartellamt had raised concerns that this could restrict competition in the same way as a market information system. Many cement customers, suppliers of ready-mix concrete and precast concrete parts, are vertically integrated, i.e. their affiliates often produce cement themselves. In the authority's view, there was the risk that a vertically integrated cement manufacturer could post enquiries on the platform and, via the price index, gain information about the prices of its competitors in the respective region. This would increase transparency in the market, which could encourage parallel conduct ("collusion") between cement suppliers, and have a dampening effect on competition. One of the key results of the authority's inquiry into the cement and ready-mix concrete sector was that the cement markets are susceptible to collusion.