Breaking Barriers: EU Issues Record Fine as it Takes On Cross-Border Trade Restrictions (Again)

By:  Lodewick Prompers, Sima Ostrovsky, Elisha Kemp & Schweta Batohi (Linklaters)

In May 2024, the European Commission imposed a record €337.5 million fine on global snack giant Mondelēz for illegally restricting parallel trade within the EU single market. Competition Commissioner Vestager stressed the importance of free cross-border trade, especially amid the cost-of-living crisis, signaling intensified scrutiny of territorial supply constraints.

This case follows a previous enforcement wave from 2018-2019 that saw five decisions against companies like AB InBev (€200 million fine) for parallel trade restrictions. Four years later, the Mondelēz decision is notable not just for the record penalty amount, but also the broader political backdrop and the Commission’s warning of more cases in the pipeline.

Companies selling across EU member states should closely monitor these developments. Continued enforcement against reseller restrictions on cross-border EU trade is expected. The risk extends beyond distribution contracts to potentially abusive unilateral conduct by dominant manufacturers (generally over 40% market share).

The Commission found Mondelēz violated EU competition rules in multiple ways:

1. Contractually limiting territories where wholesaler customers could resell products
2. Requiring higher export vs domestic resale prices
3. Preventing exclusive distributors from responding to requests from other EU countries without permission
4. Refusing supply to a German broker to block resales to higher-priced Austria, Belgium, Bulgaria and Romania
5. Cutting off supplies to the Netherlands to prevent imports into higher-priced Belgium

The first three infringements stemmed from anti-competitive agreements violating Article 101 TFEU. The last two involved abuses of dominance breaching Article 102 TFEU through Mondelēz’s unilateral conduct.

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