Europeans Drop Case Against Coca-Cola’s Business Practices

The EC Commission said today it has closed an anti-competition case against the U.S. soft drinks manufacturer Coca-Cola Corp., satisfied that the company has ended anti-competitive practices throughout the European Community.

The Commission opened the case in 1987 after receiving complaints from an Italian soft drinks manufacturer that Coca-Cola, which already held a dominant position in the Italian beverages market, was abusing this position by granting “fidelity rebates” to large distribution chains as a reward for selling only Coca-Cola. The plaintiff said these rebates obstructed market access for competitors.

Coca-Cola agreed to modify its contracts with distributors of its beverages to no longer provide for any kind of rebate. Although this undertaking was accepted by the Commission, it did not close the case when the modified agreements took effect Jan. 1, 1988, because it wanted to check that the company did not have anti-competitive contracts in other EC countries.

The Commission said the undertakings by the U.S. company to end anti-competitive practices would ensure “that competition in the soft drinks market of the EC will be strengthened” to the advantage of both Coca-Cola Corp.’s competitors and consumers.

It added that consumers would “have the choice between a larger range of drinks.”