Cable Supplier Concentration and Competition Law in Morocco

Detailed Explanation with at Least 6 Case Laws

1. Introduction

Cable supplier concentration refers to a market situation in which a small number of manufacturers, distributors, or importers control a substantial proportion of the supply of electrical cables, telecommunications cables, fibre-optic cables, industrial cables, and related products.

Cable markets are economically important because they support:

Electricity generation, transmission, and distribution.

Telecommunications and fibre-optic infrastructure.

Construction and real-estate development.

Renewable energy projects.

Industrial manufacturing and transport infrastructure.

Public procurement and government infrastructure projects.

Supplier concentration is not automatically unlawful. Large manufacturers may achieve economies of scale, improve production efficiency, and maintain consistent technical standards. However, concentration becomes a competition-law concern when suppliers use their market power to exclude competitors, coordinate prices, restrict distribution, manipulate tenders, or prevent customers from accessing alternative sources.

In Morocco, the issue must principally be examined under Law No. 104-12 on Freedom of Prices and Competition, together with Law No. 20-13 relating to the Competition Council.

2. Legal Framework Governing Cable Supplier Concentration in Morocco

A. Law No. 104-12: Freedom of Prices and Competition

The principal provisions are:

WIPO

B. Law No. 20-13: Competition Council

The Competition Council is responsible for protecting competitive market structures, examining concentrations, investigating restrictive practices and imposing appropriate competition-law remedies.

C. Relevant Market Definition

Cable suppliers should not automatically be treated as operating in one single market. The authority should consider separate product markets, potentially including:

Low-voltage electrical cables.

Medium-voltage cables.

High-voltage and extra-high-voltage cables.

Submarine power cables.

Fibre-optic telecommunications cables.

Copper telecommunications cables.

Specialised industrial and fire-resistant cables.

Cable accessories and connectivity products.

The geographic market may be national, regional or international, depending on transport costs, technical certification, customer specifications, import conditions and procurement practices.

The distinction is important because a company may have a relatively small share of the general wiring market but substantial market power in specialised high-voltage or submarine cables.

3. Major Competition Concerns in Cable Supplier Concentration

A. Excessive Market Concentration

Where two or three manufacturers control most of the supply, customers may have limited alternatives.

For example, if three cable manufacturers collectively control 85% of a particular specialised cable market, the remaining suppliers may lack sufficient production capacity to constrain their pricing.

The Competition Council should investigate:

Individual and combined market shares.

Herfindahl-Hirschman Index (HHI).

Production capacity and spare capacity.

Import competition.

Barriers to entry.

Customer switching costs.

Access to technical certification.

B. Price-Fixing and Collusion

Cable suppliers may coordinate:

Prices per kilometre.

Copper and aluminium adjustment formulas.

Discounts and rebates.

Transportation charges.

Tender prices.

Customer allocation.

Such arrangements may violate Article 6 of Law No. 104-12.

C. Bid-Rigging in Infrastructure Contracts

Public infrastructure projects often involve large cable procurement contracts.

Anticompetitive practices may include:

Suppliers agreeing which company will win a tender.

Cover bidding through artificially high competing bids.

Rotation of successful bidders.

Sharing government or utility customers.

Coordinating technical specifications to exclude competitors.

These practices can increase infrastructure expenditure and reduce procurement efficiency.

D. Exclusive Supply Agreements

A dominant cable producer may require distributors or construction companies to purchase exclusively from it.

Such arrangements become problematic when they substantially foreclose competing manufacturers from accessing customers.

E. Refusal to Supply

A dominant manufacturer may refuse to supply independent distributors, infrastructure contractors or competing installers.

Under Article 7, refusal to supply may constitute abuse of dominance where it is exclusionary and lacks objective commercial justification.

F. Discriminatory Pricing

A dominant supplier may offer favourable prices to affiliated distributors while charging independent distributors substantially higher prices.

Such conduct may weaken independent distribution networks and restrict downstream competition.

G. Import Restrictions and Market Foreclosure

Concentrated domestic suppliers may attempt to prevent imported cables from entering the market through coordinated distribution restrictions, discriminatory trading conditions or exclusionary contractual arrangements.

However, technical standards, safety certification and legitimate quality requirements are not inherently anticompetitive.

4. Case Laws and Competition Decisions

The following authorities are particularly relevant to cable markets. The European judgments provide comparative and persuasive analytical guidance; they are not binding Moroccan precedents. The Moroccan telecommunications example is a domestic competition-law illustration.

Case 1: Prysmian and Prysmian Cavi e Sistemi v Commission (2018)

Case: T-475/14.

Facts: The case concerned the European Commission's investigation and sanctions relating to a cartel involving underground and submarine high-voltage power cables.

Legal principles:

Competition authorities can investigate complex international cable cartels.

Corporate structures do not automatically shield parent companies from liability.

Inspection powers and evidence collection are important in detecting sophisticated collusion.

International cable procurement can be affected by coordinated conduct.

Application to Morocco: If Moroccan cable manufacturers coordinate prices or allocate large electricity infrastructure projects, the Competition Council may investigate their communications, bidding patterns, pricing records and corporate relationships.

Case 2: Nexans France and Nexans v Commission (2018)

Case: T-449/14.

Facts: The proceedings concerned the European power-cable cartel and the legality of the Commission's investigative measures.

Legal principles:

Investigations may extend to electronic business records.

Competition authorities must respect procedural safeguards when conducting inspections.

Evidence of cartel participation must be assessed in its proper factual and legal context.

Application to Morocco: Investigations into cable suppliers may examine emails, electronic tender records, distributor communications and pricing databases, subject to applicable procedural safeguards.

Case 3: Brugg Kabel and Kabelwerke Brugg v Commission (2018)

Case: T-441/14.

Facts: The case arose from the European Commission's enforcement against manufacturers involved in the high-voltage power-cable cartel.

Legal principles:

Specialised industrial markets are not immune from cartel enforcement.

Participation in coordinated market conduct can attract substantial financial penalties.

Competition authorities may examine the conduct of individual manufacturers within an international cartel.

Application to Morocco: Suppliers of high-voltage cables cannot justify price coordination by arguing that only a limited number of technically qualified manufacturers exist.

Case 4: Goldman Sachs Group v Commission (2018)

Case: T-419/14.

Facts: The dispute concerned the liability of Goldman Sachs in connection with its investment and ownership relationship with Prysmian, a company involved in the power-cable cartel.

Legal principles:

Parent-company liability can arise where the necessary conditions for exercising decisive influence are established.

Corporate ownership and control arrangements are relevant to competition-law responsibility.

Investment structures do not automatically eliminate competition-law exposure.

Application to Morocco: If an investment fund or holding company controls several cable manufacturing businesses, the Competition Council should examine the actual control structure and the possibility of coordinated commercial decision-making.

Case 5: Viscas Corp. v Commission (2018)

Case: T-422/14.

Facts: The proceedings formed part of the litigation arising from the European power-cable cartel investigation.

Legal principles:

International manufacturers may be held accountable for participation in anticompetitive arrangements affecting a relevant market.

The assessment of cartel conduct requires examination of the evidence concerning participation and commercial coordination.

Cross-border corporate operations do not necessarily place conduct outside competition-law scrutiny.

Application to Morocco: Foreign cable manufacturers participating in agreements that affect Moroccan procurement or supply conditions may fall within the territorial scope of Article 1 of Law No. 104-12.

Case 6: Prysmian/General Cable (European Commission, 2018)

Case: M.8770.

Facts: Prysmian proposed acquiring General Cable, creating a major cable manufacturing group with activities in energy and telecommunications cables.

The Commission examined different cable markets, including general wiring, underground power cables and submarine cables.

It considered factors such as market shares, alternative suppliers, capacity, customer concerns and the closeness of competition between the merging parties.

Decision: The Commission authorised the transaction.

Legal principles:

Supplier concentration must be assessed market by market.

A large global manufacturer is not necessarily dominant in every cable category.

The existence of alternative suppliers and available production capacity can constrain market power.

Customer concerns must be assessed alongside objective competitive conditions.

Application to Morocco: A proposed acquisition between major Moroccan cable manufacturers should be examined for its effects on particular cable categories rather than relying solely on their combined worldwide turnover.

Case 7: Prysmian/Draka (European Commission, 2011)

Case: COMP/M.6092.

Facts: The transaction involved Prysmian's acquisition of Draka, another significant cable manufacturer.

The Commission examined the distinction between general wiring, low- and medium-voltage cables, and high- and extra-high-voltage cables.

Legal principles:

Different cable technologies may constitute separate relevant product markets.

Customer requirements and production processes can determine market boundaries.

Market definition is essential to identifying the real competitive effects of a merger.

Application to Morocco: A merger involving manufacturers of electrical cables should distinguish between standard construction cables and specialised cables used in national electricity infrastructure.

The cable-specific merger decisions and power-cable cartel judgments provide particularly useful comparative material.

EUR-Lex+3

Case 8: Maroc Telecom – Médi Télécom Interconnection and Discriminatory Discount Dispute

Jurisdiction: Morocco.

Facts: Maroc Telecom introduced a 10% discount for customers making calls from its fixed-line network to Maroc Telecom mobile customers. Médi Télécom challenged the arrangement before the telecommunications regulator, ANRT.

Outcome: ANRT considered the discriminatory discount abusive in light of Maroc Telecom's dominant position, and the discount was subsequently suspended.

Legal principles:

Dominant undertakings must not use their market position to disadvantage competitors.

Discriminatory commercial conditions may constitute abuse of dominance.

Control over an important infrastructure network can create competitive advantages that require regulatory scrutiny.

Application to cable suppliers: A dominant cable manufacturer that supplies affiliated distributors on preferential terms while disadvantaging independent distributors may raise similar competition concerns.

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Important qualification: This is a Moroccan regulatory precedent in telecommunications, not a judicial judgment concerning cable manufacturing. The cable-specific European authorities above are comparative precedents. They should not be presented as decisions of Moroccan courts.

5. Economic Analysis of Cable Supplier Concentration

The Competition Council should undertake an economic assessment before concluding that concentration is harmful.

A. Herfindahl-Hirschman Index (HHI)

HHI is calculated by adding the squares of the market shares of all suppliers.

For example:

Illustrative HHI: 3,000

This indicates a highly concentrated market under commonly used international screening approaches. It is an economic warning indicator, not proof of an infringement under Moroccan law.

B. Barriers to Entry

The Council should investigate:

High capital investment in cable manufacturing.

Access to copper and aluminium.

Advanced manufacturing technology.

International quality certification.

Technical expertise.

Long-term supply contracts.

Transportation and distribution infrastructure.

C. Countervailing Buyer Power

Large electricity distributors, telecommunications operators and construction companies may have sufficient purchasing power to negotiate competitive prices.

However, buyer power is weaker where customers require specialised cables available from only one or two qualified manufacturers.

6. Legal Remedies and Enforcement Measures in Morocco

The following measures may be appropriate depending on the infringement and the applicable statutory powers.

A. Merger Control

Under Articles 11–17 of Law No. 104-12, qualifying transactions must be notified and reviewed before implementation.

The Council should examine whether a proposed merger would:

Create or strengthen a dominant position.

Eliminate an important independent supplier.

Increase dependence on a limited number of manufacturers.

Reduce competitive pressure in public procurement.

Increase barriers to imports or market entry.

Facilitate coordinated conduct.

B. Behavioural Remedies

Possible remedies include:

Prohibiting discriminatory pricing.

Requiring transparent distribution conditions.

Removing unjustified exclusivity arrangements.

Preventing tender information exchanges.

Establishing independent compliance monitoring.

C. Structural Remedies

Where behavioural measures cannot adequately restore competition, structural measures may be considered where legally available and proportionate.

Examples include divestment of manufacturing facilities or the transfer of assets necessary to maintain an independent competitor.

7. Practical Hypothetical Example

Assume that three major manufacturers supply 90% of Morocco's specialised medium-voltage electrical cable market.

The companies subsequently enter into distribution agreements with major construction contractors.

Their conduct includes:

Agreeing on minimum selling prices.

Dividing infrastructure projects between themselves.

Preventing independent distributors from sourcing imported cables.

Offering discriminatory rebates to affiliated distributors.

Coordinating their bids for public electricity projects.

Legal analysis:

Price coordination may violate Article 6.

Market allocation may violate Article 6.

Exclusionary distribution agreements may violate Article 6 or Article 7, depending on the circumstances.

Discriminatory supply conditions may constitute abuse under Article 7.

An acquisition that creates or strengthens dominance may require merger review under Articles 11–17.

Contractual clauses connected with prohibited practices may be affected by Article 10.

The Competition Council should examine the relevant market, evidence of coordination, economic effects and possible objective justifications before determining liability.

8. Challenges in Regulating Cable Supplier Concentration

Morocco may encounter several practical difficulties:

1. International supply chains: Cable manufacturers may operate through foreign subsidiaries, distributors and intermediaries.

2. Technical complexity: Different cable categories require specialised economic and engineering assessments.

3. Import dependency: Restrictions on imported copper, aluminium or finished cables may affect competition.

4. Public procurement: Large infrastructure contracts may create opportunities for bid coordination.

5. Limited alternative suppliers: Specialised high-voltage and submarine cables may have relatively few qualified manufacturers.

6. Information asymmetry: Regulators may find it difficult to obtain reliable production-cost, capacity and pricing information.

9. Recommendations for Morocco

A comprehensive competition policy for cable suppliers should include:

Regular monitoring of cable manufacturing and distribution markets.

Sector-specific concentration assessments.

Monitoring of copper and aluminium price-adjustment mechanisms.

Detection of suspicious tender-bidding patterns.

Improved transparency in public cable procurement.

Encouragement of independent domestic manufacturers.

Removal of unjustified import and distribution barriers.

Monitoring of exclusive supply arrangements.

Effective merger review and proportionate remedies.

Cooperation between the Competition Council, ANRE, ANRT and public procurement authorities within their respective legal competences.

10. Conclusion

Cable supplier concentration is an important competition-law issue in Morocco because electrical, telecommunications and industrial cable markets are essential to national infrastructure and economic development.

Law No. 104-12 provides the principal legal framework for controlling anticompetitive agreements, abuse of dominance and harmful economic concentrations.

The comparative decisions involving Prysmian, General Cable, Draka, Nexans, Brugg Kabel and Goldman Sachs demonstrate the importance of market definition, corporate accountability, cartel detection and merger assessment.

The ultimate objective should not be to prevent large cable manufacturers from expanding. Rather, it should be to ensure that economies of scale and technological development do not become instruments for eliminating competition.

The central legal principle is that industrial concentration is permissible, but the abuse of market power and anticompetitive consolidation must remain subject to effective competition-law scrutiny.