The European Commission renders legally binding commitments from Rio Tinto Alcan

The European Commission has adopted a decision that renders legally binding the commitments offered by Rio Tinto Alcan to address concerns raised by the Commission about competition on markets for aluminium smelting equipment. The Commission was concerned that the company may have infringed EU antitrust rules by contractually tying the licensing of its leading Aluminium Pechiney ("AP") smelting technology to the purchase of handling equipment (namely, pot tending assemblies or "PTAs") from its subsidiary Electrification Charpente Levage ("ECL"). PTAs are specialty cranes used in aluminium reduction plants (smelters) where primary aluminium is produced. Rio Tinto Alcan committed to modify its future technology transfer agreements so as to enable licensees of its AP technology to purchase PTAs from any recommended supplier.

Joaquín Almunia, Commission Vice-President in charge of competition policy commented: "With today's commitments we have achieved a far-reaching solution to the concerns raised by the Commission. Rio Tinto Alcan's commitments will open up the market for equipment used in aluminium smelters. As a result, the customers of aluminium technology and equipment will have more choice."

The Commission had concerns that Rio Tinto Alcan's contractual tying of the equipment to the technology could result in an infringement of EU antitrust rules that prohibit restrictive business practices and the abuse of a dominant market position. The Commission took the preliminary view that Rio Tinto Alcan has substantial market power, to the point that it may be a dominant firm, on the market for the licensing of aluminium smelting technology. The tying of this technology to the sale of PTAs could lead to higher prices, hamper innovation and shut out competitors from the market for this type of equipment.

To address these concerns, Rio Tinto Alcan offered commitments. The commitments introduce an objective and non-discriminatory process for selecting qualified suppliers of PTAs. Users of Rio Tinto Alcan's technology will then be able to choose among the recommended suppliers. Rio Tinto Alcan will provide competing PTA suppliers with the necessary technical specifications to ensure that their PTAs are capable of operating in smelters using AP technologies. Compliance with these commitments will be monitored by an independent expert. After market testing an initial commitments' proposal in August 2012, the Commission concluded that the final commitments offered by Rio Tinto Alcan (which introduced several improvements in response to some requests raised during the market test) are suitable to address its competition concerns.