Guide to competition law in AAMPACT e.V.

Guidance for our association work

Introduction

AAMPACT e.V. The International Independent Aftermarket Association is the interest group for renowned automotive parts manufacturers and automotive suppliers, all of them leaders in the Indepent Aftermarket.

The aim of AAMPACT e.V. and its members is to actively and effectively represent the interests of all participants in the automotive after-sales market, in close cooperation with adjacent organisations.

AAMPACT e.V. is generally committed to acting in a legal manner and orients its association work strictly towards compatibility with German and European competition law.
With this in mind, AAMPACT e.V. is offering its members advice in this guide, compliance with which should, in the interests of AAMPACT e.V and its members, help prevent at the outset of any activity conduct that is questionable from a competition law perspective. The guide is intended to provide certainty and guidance for member firms in this respect. To this end, the guide contains, inter alia, rules on admissible and inadmissible topics for association meetings, on market information procedures, association recommendations, and on holding association meetings. Compliance with these rules is compulsory for all those participating in AAMPACT association activities – and as a result, also serves to protect our association and its members.

AAMPACT e.V., July 2019

Preliminary remark on the general ban on cartels

Competition law is fundamentally intended to combat all types of restrictions by competitors. It bans competitors from sharing sensitive information. In Germany, the ban on cartels arises from Section 1 of the Restriction of Competition Act (Gesetz gegen Wettbewerbsbeschränkungen - GWB). In accordance with this section, all agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition are prohibited. The European ban on cartels additionally applies if the practices specified in Section 1 GWB are likely to impair trade between EU Member States (Article 101 of the Treaty on the Functioning of the European Union (TFEU)).

Competition law prohibits agreements over prices, trading conditions, etc., but it does not presuppose express, and specifically, written declarations. An agreement can also be made through 'conduct implying an intent'. In addition to agreements, however, competition law also prohibits 'concerted practices' of undertakings, which lead to a similar result. This guide cannot do justice to the full complexity of competition law.

It may therefore be necessary to undertake a more detailed legal evaluation with regard to the finer points.

Topics and organisation of AAMPACT e.V. meetings

a) Who can be your competitor?

• Companies compete both in sales and in purchasing. A competitor is any party that offers or requires the same or similar products or services.
• A party offering different products to the same customer or purchasing different goods from the same supplier may also constitute a competitor.
• A party that has not yet but is likely to offer the same or a similar product in the relatively near future also constitutes a (potential) competitor. The term “near future” may cover a period of significantly more than a year (or even several years).
• Companies from the different stages in the distribution chain can also be in competition, for example if a manufacturer distributes its goods both directly and through retailers.
• Companies that are not currently competing in a given product area can be considered (potential) competitors if they would be easily and relatively rapidly able to enter into competition.

b) Admissible topics for a AAMPACT e.V. meeting

During AMPACT e.V. meetings, companies are essentially permitted to exchange information on their respective topics, provided that this exchange of information is not used, in particular isolated cases, to restrict competition.

Admissible topics include:

• the review of general business developments, provided the information relates to the company as a whole, the entire product range or other aggregated business areas and has already been lawfully published by the companies in question;
• current economic developments and general developments in the industry (provided these are in the public domain);
• general technical issues such as general trends or current technical innovations;
• general legal issues, current proposed legislation and its consequences for the entirety of the member companies as whole;
• socio-political issues and the collective representation of interests to politicians, such as discussions regarding AAMPACT e.V.'s lobbying activities;
• benchmarking activities provided these involve (as a rule) at least five companies, a neutral third party conducts the benchmarking, anonymizes and aggregates the findings before being disclosed to the said companies, no disaggregation is possible at the Association meeting, and there is no reference to products or market behavior (only to internal processes or environmental standards, for example);
  Please be aware that AAMPACT board members have a “double function” (employee of a member company /competitor and board member), they cannot collect information on a neutral basis for benchmarking. That needs to be done by a “real” neutral person, e.g. external Consultancy Company.
• General exchange of data that is publicly available (e.g. from the Federal Motor Transport Authority (KBA), the internet, or the published annual reports of member companies).

c) Topics that are inadmissible for an AAMPACT e.V. meeting

During AAMPACT e.V. meetings, companies are not permitted to exchange information on topics that breach competition law and so-called 'hidden competition' (e.g. in the case of calls for tender), or where the information or data in question is internal to the companies.

Inadmissible topics specifically include:

• all price-related topics such as information or agreements on prices (purchasing, selling and re-selling prices including list prices), price components, discounts, pricing strategies and calculations, and planned price changes;
• terms and conditions of purchase, delivery, or payment from contracts with third parties, unless these are publicly available trading conditions;
• information on company strategies, market behaviour current and in the future (signalling) or information not yet lawfully published concerning current business;
• information on revenue and sales figures, profits, profit margins, market shares and planned capital expenditure, unless this is public;
• information on internal research and development projects; technologies and product innovations;
• information on sales policy, sales territories and customers;
• coordination of offers to third parties; the division of geographic or labour markets or sources and express or implied agreements on supply, purchase or other boycotts of specific companies.
• information on capacities, capacity utilisation and quotas, such as production quotas, production restrictions and capacity shortages;
• information on costs (e.g. development, raw materials, production and administrative costs);
• verification of information received from a customer or supplier;
• demands from customers or suppliers including the company’s own response to these or the response of competitors.

d) Preparing and holding association meetings

AAMPACT e.V.'s Executive Board, in coordination with the Steering Committee, issues official invitations to meetings of its members on a timely basis and encloses an agenda in good time that is as detailed as possible with the invitations. The Steering Committee supports AAMPACT e.V.'s Executive Board in formulating the agenda and supporting documents in a clear and unambiguous manner and ensuring that they contain no points that might be questionable from a competition law perspective.

The Chair of the meeting/Executive Board ensures compliance with the formal and proper meeting procedure (with agenda and minute-taking). At the beginning of the meeting, the Chair reminds the participants of the conduct required for conformity with competition law. Where the same group of participants meet up regularly, this guidance is not given at every meeting, but at appropriate intervals. The Chair will prevent any violation of competition law by intervening during the course of the meeting.

The members of the Steering Committee assist the Chair in ensuring that there is no deviation from the agenda. Should the participants nevertheless wish to deviate from the agenda, the Chair will call for a formal decision on this change and will record this decision in the minutes.

Meeting participants should object to new agenda items if they are of the opinion that these are questionable under competition law or if no formal decision to change the agenda has been taken. They should demand that the deviation from the agenda and their objection to this are recorded in the minutes. The Chair will review the objections and reject the agenda points where necessary.

e) Minutes of association meetings

The members of the Steering Committee assist the Chair in preparing correct, complete, and accurate minutes of association meetings, including the decisions taken at these meetings. The meeting participants should object if they notice that no minutes are being taken.

The Executive Board of AAMPACT e.V. endeavours to ensure that the wording in the minutes is clear and unambiguous. The minutes of association meetings are sent to all participants shortly thereafter.

Upon their receipt, the meeting participants check the minutes to ensure that these are an accurate reproduction of the main contents of the meeting and its decisions. They draw AAMPACT e.V.'s attention to any incomplete or incorrect minute items without undue delay, particularly with regard to topics relevant to competition law, and ask for a correction.

f) Conduct during association meetings

The Chair ensures, with the support of the Steering committee, that no inadmissible decisions, agreements, discussions, or spontaneous statements are made on topics relevant to competition law during the association meeting.

Meeting participants who are not conducting themselves in conformity with competition law are promptly advised of this by the Chair. The Chair should discontinue or adjourn the discussion or, if need be, the entire meeting, if legal clarification should become necessary.

The meeting participants should call for the discontinuation or adjournment of a discussion or meeting if they have concerns regarding its lawfulness. This demand must be recorded in the minutes.

If a discussion that is questionable under competition law is continued, the meeting participants should leave the meeting. When a meeting participant leaves the meeting, this must be recorded in the minutes, together with a note of the participant's name and the time that this occurred.

Market information procedures/association statistics

Market information procedures are organised data collections, which present information in the form of association statistics for e.g. on subjects such as vehicle registrations. Market information procedures of this type and other statistics are only admissible if they are carried out officially via the association or another neutral body that only publishes anonymised and non-identifiable aggregated data.

AAMPACT takes care to ensure that the market information procedures it carries out comply with the legal requirements and in particular (not least as regards the market structure and reporting cycle) do not artificially increase market transparency, and that (as a rule) at least five companies are covered per reporting category. Data relating to companies may be communicated within the framework of market information procedures only in the procedure provided for that purpose, and not in association meetings, however.

Member information bulletins and press releases by AAMPACT e.V.

AAMPACT e.V. ensures that its member information bulletins and press releases do not contain any formulations that deliberately or inadvertently indicate agreements, uniform conduct, or corresponding recommendations on the part of AAMPACT e.V.

Admissible formulations are:

• objective rendition of the market situation and market development;
• presentation of alternative possible responses, without unilaterally privileging a particular possible response.

Association recommendations

AAMPACT e.V. develops association recommendations in special workshops that are legally reviewed where necessary. The recommendations are developed in an open, transparent and non-discriminatory procedure.
AAMPACT e.V. makes these recommendations available for use by its member companies without obligation.

Admission and rejection of new members

AAMPACT e.V. is fundamentally free to decide on whether or not to accept new members. AAMPACT e.V. has specified in detail the preconditions for membership in its constitution.
AAMPACT e.V. will respect an existing claim to be admitted under competition law of a company wishing to become a member of AAMPACT e.V. AAMPACT e.V. is entitled to refuse admission into AAMPACT e.V. to candidate companies that do not fulfil the admission criteria stipulated in the constitution. However, refusal of admission may not be discriminatory, for instance if other comparable companies have already been admitted despite failing to fulfil the admission criteria.

Further information

The Executive Board of AAMPACT and the AAMPACT Steering Committee are at the disposal of any members with questions on this guide.