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Complaint against Unimerco's alleged bundling of automatic fastenertools and fasteners

29. oktober 2008

J.nr.: 4/0120-0100-0512/BYS/ab

On 29th October 2008 the Danish Competition Authority (DCA) has decided to adopt a commitment decision, cf. section 16 a of the Danish Competition Act, to prevent an alleged abuse by Unimerco A/S of the company’s presumably dominant position on the wholesale market for power fastenings tools (nailers, sprigs and staplers).

The case was initiated by a complaint from the competing wholesaler Hitachi Power Tools Denmark A/S. The complainant accused Unimerco of tying the sale of power fastening tools to the sale of “original” fasteners supplied by Unimerco, with the effect that competing wholesalers of fasteners were excluded from selling compatible fasteners to tools marketed by Unimerco.

The DCA’s preliminary investigation of the matter showed i.a. that in the Danish versions of Unimerco’s manuals and pricelists etc. the company demands or urges customers only to use original fasteners in tools marketed by Unimerco. These urgings and demands were emphasized by various statements from Unimerco concerning safety risks connected to the use of other fasteners than original fasteners, and threats that warranty and product liability would be repealed if unoriginal fasteners were used. In addition, Unimerco offered free services for its power fastening tools provided that only original fasteners had been used.

The DCA’s preliminary assessment of the market for wholesale distribution of power fastening tools and fasteners showed indications that the geographical market at this stage of trade may be defined as national. The initial inquiries, made by the DCA, suggest that on the national market (Denmark) for wholesale of power fastening nailers and compatible nails, Unimerco will probably hold a dominant position with market shares exceeding 50-60 per cent.

The DCA has not, however, made a thorough analysis in order to make a conclusive definition of the geographical market. Nor has the DCA made a further investigation of Unimerco’s market position on a potentially broader geographical market than Denmark or for that matter investigation of Unimerco’s position on the other product markets (sprigs and staplers plus compatible fasteners).

Due to the fact that Unimerco early in the process has offered commitments, which will remove the DCA’s competition concerns, and for efficiency reasons, the DCA has chosen not to make a final decision on the market definition, and consequently leaving it as an open question, whether Unimerco holds a dominant position on the relevant market.

Unimerco’s commitments concern all three types of power fastening tools (nailers, sprigs and staplers). Instead of demanding and urging the customers to use original fasteners only, Unimerco will only require the use of fasteners that are fully compatible with the tools, meaning fasteners that fulfill the specifications (description, type, dimension etc.) listed in the operating instructions, as required by the European Committee for Standardization, EN 792-13:2000.

Unimerco has agreed to inform essential business partners of the commitments no later than 1st. December 2008, when all the commitments should be implemented.