Chocolate conglomerate fined for violation. - Who will receive the 337.5 million Milka funds?
The European Union's (EU) Commission has slapped American confectionery company Mondelez International with a whopping €337.5 million fine. The reason behind this hefty punishment is unfair competition through limitations on trade of chocolate, cookies, and coffee products across the borders.
Who pocket's this massive fine?
The money collected from companies breaking EU fair trade laws isn't automatically directed towards any special endeavor. Instead, it's added to the EU's overall budget.
Who benefits from it?
The contributors of EU member states see their financial obligations decrease proportionately in the subsequent year. In simpler terms, the people ultimately gain, as it means less money being taken from their pockets.
Germany, Europe's largest economy, is also the largest contributor to the EU's budget. In 2022, it shelled out €19.7 billion. That translates to roughly €237 per capita contribution. Consequently, should the fine revenue reduce Germany's contribution, this would be a win for German taxpayers.
Roots of the penalties
Mondelez, behind iconic brands like Milka, Oreo, Toblerone, Tuc and Ritz, engaged in anticompetitive deals and abused their dominant market position. These actions prevented merchants from selling items at lower prices across borders. Rather than fair pricing, this resulted in inflated costs for consumers.
The company eventually admitted their wrongdoings, which helped reduce their fine by 15%.
Inflation implications
According to EU Competition Commissioner Margrethe Vestager, restrictions like Mondelez's hinder cross-border trade. This leads to artificially high prices and a limited selection of products. Inflation-plagued times demand an increase in cross-border trade, as it can help reduce prices and broaden product diversity.
Possible compensation claims
Impacted merchants and consumers can seek damages in national courts. The EU Commission's final decisions are considered as indisputable proof of anticompetitive actions. This streamlines the process for individuals affected by such practices, allowing them to reclaim their lost money without losing out on the entire loan.
Aiding in early detection
To spot anti-competitive behavior more promptly in the future, the Commission has introduced a whistleblower system. Anyone can anonymously report such violations via an encrypted communication system.
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Source: symclub.org
