Why Europe Must End Its 30-Year Digital Winter to Ensure Its Long-Run Future

EU Regulators Crack Down on Anti-Competitive Practices

European regulators have reportedly increased their focus on anti-competitive behavior among consumer product companies.

Last year, competition authorities carried out 26 surprise inspections on consumer companies in the U.K., Switzerland and the European Union, up from 17 in 2022, the Financial Times (FT) reported Sunday (Feb. 18).

The report — citing data from law firm White & Case — says that competition lawyers see the increase in inspections as the result of greater concerns that inflation has made companies more likely to collude or conceal price hikes.

“It’s easy to hide price increases when there is inflationary pressure,” Zoë Mernick-Levene, head of competition at Leigh Day, told the FT. “[There is an impression that] markets are not working so well and [regulators] are looking much more intently at the bargaining power between consumers and firms.”

Among the companies raided for suspected antitrust law violations were Red BullMichelin and Kering, which owns Gucci, the report said. PYMNTS has contacted all three companies for comment but has not yet gotten a reply.

As the FT notes, European consumers are undergoing the worst cost-of-living crisis in a generation following Russia’s invasion of Ukraine and the end of COVID lockdowns. And while lower energy prices have reduced overall inflation, and other raw material costs have dropped, the price of goods has continued climbing.

The worldwide value of retail sales in the consumer products space rose by 10% on average last year, the report said, though 75% of that growth came from price increases. In the U.S. and Europe, 95% of sales growth was down to price increases.

Meanwhile, PYMNTS reported last week that American shoppers’ expectations when it comes to retail prices are getting more positive.

PYMNTS Intelligence research finds that the percentage of consumers anticipating ongoing inflation in retail prices over the next 12 months fell from 64% in January 2023 to 57% in January 2024, in spite of a jump in inflationary concerns in mid-2023.

“The decline in the percentage of consumers expecting higher retail prices suggests a shift toward more favorable expectations, which could influence their purchasing behavior and overall economic sentiment,” PYMNTS wrote.

However, retail sales are not necessarily trending positively. January’s 0.8% slide in retail sales, as recent Census Bureau data showed, fell short of the consensus, which had looked for a 0.3% drop from December’s levels.