Business case
A group of companies participating in an international purchasing alliance was investigated by the European Commission in relation to alleged anticompetitive practices. The investigation focused on the contractual arrangements between suppliers and the purchasing alliances, as well as the economic mechanisms through which financial flows were generated and distributed across participating entities.
Competition investigations involving purchasing alliances require a detailed understanding of contractual arrangements, financial incentives and pricing mechanisms. Robust economic analysis can help distinguish between legitimate commercial practices and conduct that could potentially raise competition concerns. In this case, our findings contributed to the European Commission’s decision to discontinue the investigation.
We conducted an economic analysis of the remuneration mechanisms implemented under the agreements between suppliers and the purchasing alliances. We examined how the various financial flows arising from these arrangements were structured and how they were reflected throughout the pricing chain within the purchasing group. Our work aimed to provide an economic understanding of the incentives created by these mechanisms and their implications from a competition perspective.