1. Introduction

Competition Law in Welding Consumables Coordination in Morocco concerns the regulation of agreements, understandings, coordinated commercial strategies and restrictive practices among manufacturers, importers, wholesalers, distributors and suppliers of welding consumables.

Welding consumables are essential industrial products used in construction, infrastructure, manufacturing, shipbuilding, automotive production, energy projects and metal fabrication.

The principal products include:

Welding electrodes and coated electrodes.

MIG/MAG welding wires.

TIG welding rods.

Flux-cored welding wires.

Welding fluxes and powders.

Brazing and soldering materials.

Industrial welding filler metals.

Specialised alloy welding consumables.

Coordination between competing businesses can sometimes improve product quality, distribution efficiency and technical standards. However, coordination becomes unlawful when businesses use it to eliminate independent competition.

In Morocco, the principal legislation is Law No. 104-12 on Freedom of Prices and Competition, as amended by Law No. 40-21, together with the legislation governing the Moroccan Competition Council.

The central concern is whether independent welding consumables suppliers are coordinating their commercial behaviour instead of competing independently.

2. Legal Framework in Morocco

A. Law No. 104-12: Article 6 – Anti-competitive agreements

Article 6 prohibits express or tacit agreements, concerted practices and coalitions that have the object or potential effect of preventing, restricting or distorting competition.

It particularly addresses four categories:

Restricting market access or freedom of competition.

Artificially influencing prices.

Limiting production, commercial outlets, investment or technical progress.

Dividing markets, sources of supply or public procurement contracts.

Application to welding consumables:

Suppose five welding electrode manufacturers operating in Morocco agree to maintain identical minimum wholesale prices.

If they also coordinate discounts, customer allocation and supply quantities, their conduct could constitute prohibited cartel activity.

The prohibition does not require a formally signed agreement. Tacit arrangements and concerted practices can also be caught.

B. Article 7 – Abuse of dominant position

Article 7 prohibits the abusive exploitation of:

A dominant position in the Moroccan market or a substantial part of it.

A situation of economic dependence where a customer or supplier has no equivalent alternative.

Examples include:

A dominant welding wire supplier refusing to supply independent distributors.

Imposing discriminatory commercial conditions.

Tying welding consumables to proprietary welding equipment without objective justification.

Restricting access to essential distribution channels.

Imposing unjustified exclusivity obligations.

Importantly, having a dominant position is not itself illegal. The abuse of that position is prohibited.

C. Article 9 – Exemptions

Certain agreements may qualify for exemption where they contribute to economic or technical progress, provide consumers with a fair share of the benefits and satisfy the other statutory conditions.

For example, competing welding consumables manufacturers may cooperate to:

Develop safer welding materials.

Improve industrial quality standards.

Reduce manufacturing waste.

Establish legitimate technical certification systems.

Improve distribution efficiency.

However, the restrictions must be indispensable to achieving the claimed benefits, and the agreement must not eliminate competition in a substantial part of the relevant market.

D. Articles 12–20 – Merger control

Where manufacturers, importers or distributors combine their businesses, the transaction may constitute a notifiable concentration.

The Competition Council examines whether the transaction could create or strengthen market power and substantially undermine competitive conditions.

E. Enforcement and remedies

Under Law No. 104-12, the Competition Council can investigate suspected infringements, impose corrective measures, accept commitments and impose financial penalties.

It can also order businesses to terminate prohibited practices.

Articles 36 onwards provide important enforcement mechanisms, while Article 23 establishes a five-year limitation period in the circumstances specified by that provision.

The principal legislative framework is established by Law No. 104-12 and its implementing legislation.

3. Major Forms of Anti-Competitive Coordination

3.1 Price-fixing coordination

High competition risk

Price fixing occurs when competing welding consumables suppliers agree on selling prices rather than independently determining their prices.

Examples:

Fixing minimum prices for welding electrodes.

Agreeing on common wholesale margins.

Coordinating price increases.

Establishing common transportation surcharges.

Agreeing not to offer discounts to large industrial purchasers.

Moroccan legal implications: Article 6 prohibits arrangements that artificially influence market prices.

A common price increase resulting from independently responding to increased raw-material costs is not, by itself, evidence of a cartel. Evidence of coordination is important.

3.2 Customer allocation

High competition risk

Manufacturers may agree to divide customers according to industrial sectors.

For example:

Company A supplies automobile manufacturers.

Company B supplies construction companies.

Company C supplies shipbuilding companies.

Company D supplies government infrastructure projects.

If competitors agree not to approach one another's customers, the arrangement may constitute unlawful market allocation.

3.3 Geographic market allocation

Suppliers may coordinate their geographical operations.

Examples include:

One distributor receiving exclusive access to Casablanca.

Another receiving exclusive access to Rabat.

A third receiving exclusive access to Tangier.

Competitors agreeing not to sell outside their assigned territories.

Genuine exclusive distribution arrangements require individual assessment. However, agreements between competitors to divide geographical markets are particularly serious.

3.4 Production and supply coordination

Manufacturers may coordinate production quantities to maintain artificial scarcity.

Examples:

Agreeing to reduce electrode production.

Coordinating deliveries to industrial customers.

Restricting the supply of specialised welding wires.

Delaying product availability to increase prices.

Such conduct can fall under Article 6 where it restricts production or commercial outlets.

3.5 Tender coordination

Public and private procurement contracts for welding consumables may attract cartel activity.

Examples:

Agreeing who will win a government tender.

Submitting artificially high cover bids.

Rotating winning suppliers.

Agreeing not to participate in selected tenders.

Dividing procurement contracts according to geographical areas.

These arrangements may distort public procurement and increase project costs.

3.6 Information exchange

Competitors may exchange commercially sensitive information, including:

Future prices.

Customer-specific discounts.

Production forecasts.

Planned supply restrictions.

Individual customer lists.

Future bidding strategies.

Exchanging historical, aggregated market information for legitimate statistical purposes is not automatically unlawful.

However, exchanging individualised future pricing information can facilitate cartel coordination.

3.7 Exclusive distribution and supply arrangements

A manufacturer may appoint an exclusive distributor for welding electrodes or specialised welding wires.

Such an arrangement is not automatically prohibited.

However, problems arise where exclusivity:

Prevents competing distributors from entering the market.

Creates substantial barriers for new suppliers.

Restricts parallel imports.

Is imposed by a dominant supplier without objective justification.

Is part of a wider market-sharing agreement.

4. Relevant Market Definition

A proper competition investigation must identify the relevant product and geographical markets.

A. Product markets

Different welding consumables may constitute separate markets depending on their applications and substitutability.

B. Geographical market

The investigation should determine whether competition takes place:

Nationally throughout Morocco.

Within particular industrial regions.

Through import competition.

Across international supply chains.

The existence of foreign manufacturers does not automatically establish that the Moroccan market is internationally competitive. Transport costs, customs conditions, technical certification and distribution arrangements must also be considered.

5. Eight Important Case Laws and Competition Decisions

The following decisions provide comparative legal principles relevant to welding consumables coordination. They are not Moroccan judgments concerning a proven welding consumables cartel. EU decisions are persuasive comparative references, not binding Moroccan precedents.

Case 1. Suiker Unie and Others v Commission

Citation: Joined Cases 40–48/73, 50/73, 54–56/73, 111/73, 113/73 and 114/73 (1975).

Legal principle: Independent commercial decision-making.

The European Court of Justice emphasised that businesses must independently determine their market conduct.

Application to Morocco:

Welding consumables manufacturers must independently determine:

Electrode prices.

Distributor discounts.

Customer contracts.

Production volumes.

Supply conditions.

Competitors cannot replace commercial independence with coordinated market behaviour.

Case 2. Commission v Anic Partecipazioni

Citation: Case C-49/92 P (1999).

Legal principle: Concept of concerted practices and participation in cartel arrangements.

The judgment addressed the relationship between agreements, concerted practices and participation in a continuing infringement.

Application to Morocco:

Suppose several welding wire manufacturers participate in recurring meetings to coordinate prices and sales allocations.

The absence of a single comprehensive written contract would not necessarily protect the participants from liability.

Their conduct must be examined as a whole, including their contacts and commercial behaviour.

Case 3. T-Mobile Netherlands and Others

Citation: Case C-8/08 (2009).

Legal principle: A single meeting can be sufficient to establish a concerted practice, depending on its content and circumstances.

The Court examined the exchange of commercially sensitive information between competitors and its potential influence on their subsequent market conduct.

Application to Morocco:

If competing welding consumables suppliers meet once and exchange confidential future pricing plans, the meeting could constitute evidence of unlawful coordination.

Repeated meetings are not necessarily required.

Case 4. Dole Food and Dole Fresh Fruit Europe v Commission

Citation: Case C-286/13 P (2015).

Legal principle: Exchange of commercially sensitive information and price coordination.

The Court examined communication between competitors concerning factors relevant to their pricing decisions.

Application to Morocco:

Welding consumables manufacturers exchanging information about:

Future electrode prices.

Planned discount reductions.

Customer-specific pricing.

Anticipated supply conditions.

may reduce competitive uncertainty and facilitate coordination.

Case 5. Consten and Grundig v Commission

Citation: Joined Cases 56/64 and 58/64 (1966).

Legal principle: Territorial protection and restrictions on parallel trade.

The Court examined distribution arrangements that protected a distributor against competition from other distributors.

Application to Morocco:

A welding electrode manufacturer cannot assume that contractual territorial arrangements are automatically lawful.

If distribution agreements prevent cross-border or parallel supplies and materially restrict competition, they may attract scrutiny.

Case 6. United Brands v Commission

Citation: Case 27/76 (1978).

Legal principle: Identification of dominance and abusive commercial restrictions.

The Court examined the economic position of a powerful supplier and its commercial practices.

Application to Morocco:

A dominant supplier of specialised welding wires may face scrutiny if it:

Refuses supplies to competing distributors.

Imposes discriminatory conditions.

Restricts access to important customers.

Uses commercial dependency to impose unjustified obligations.

This is particularly relevant under Article 7 of Moroccan Law No. 104-12.

Case 7. Hoffmann-La Roche v Commission

Citation: Case 85/76 (1979).

Legal principle: Loyalty-inducing exclusivity and abuse of dominance.

The Court examined exclusive purchasing arrangements and loyalty rebates imposed by a dominant undertaking.

Application to Morocco:

A dominant welding consumables manufacturer offering substantial rebates conditional upon distributors purchasing all or nearly all their requirements from it may create exclusionary effects.

The commercial structure, market power, duration and economic effects must be examined.

Case 8. MIG / Carlyle / Eutect

Citation: European Commission Decision, Case COMP/M.2104 (2001).

Legal principle: Competition assessment of consolidation in welding and brazing products.

This is particularly relevant because it directly concerns welding consumables.

The European Commission examined market shares and competitive relationships involving welding consumables, stick electrodes, solid wires, flux-cored wires and brazing materials.

Application to Morocco:

The decision provides a useful comparative framework for examining:

Concentration among welding consumables manufacturers.

Market shares of major suppliers.

Competitive pressure from alternative manufacturers.

Different product-market segments.

Potential consequences of consolidation.

It is a merger-control decision, not a finding that the parties participated in a cartel.

6. Practical Examples of Potential Competition Violations in Morocco

7. Role of the Moroccan Competition Council

The Moroccan Competition Council is responsible for safeguarding competitive market conditions.

In the welding consumables sector, its responsibilities may include:

1. Investigation

Investigating suspected coordination among manufacturers, importers and distributors.

2. Evidence collection

Examining:

Commercial correspondence.

Distributor agreements.

Price lists.

Internal business records.

Tender documents.

Communications between competitors.

3. Market analysis

Evaluating market concentration, market shares, barriers to entry and the competitive effects of distribution agreements.

4. Corrective measures

Ordering businesses to terminate prohibited practices or modifying restrictive contractual arrangements.

5. Financial penalties

Imposing applicable financial sanctions under Moroccan competition legislation.

6. Merger supervision

Reviewing qualifying mergers and acquisitions involving welding consumables manufacturers and distributors.

8. Economic Consequences of Welding Consumables Coordination

Anti-competitive coordination can produce serious economic consequences.

Welding consumables are important intermediate industrial inputs. Consequently, competition restrictions can affect several downstream industries.

9. Legal Compliance Framework for Welding Consumables Businesses

Businesses operating in Morocco should adopt the following compliance measures.

1. Independent pricing: Each manufacturer must independently determine its prices and commercial discounts.

2. Competitor communication: Avoid exchanging confidential future pricing, customer or production information.

3. Distribution agreements: Review territorial exclusivity and customer restrictions for their competitive effects.

4. Tender independence: Prepare bids independently without communicating bidding strategies to competitors.

5. Production autonomy: Avoid agreements with competitors to restrict manufacturing or supply.

6. Customer protection: Avoid unjustified discrimination and exclusionary practices by dominant suppliers.

7. Technical cooperation: Ensure that legitimate industry-standardisation projects do not become mechanisms for price coordination.

8. Merger compliance: Assess whether acquisitions and business combinations require prior notification.

10. Important Distinction: Lawful Cooperation Versus Unlawful Coordination

Not every form of cooperation between welding consumables manufacturers violates competition law.

For example, two manufacturers may cooperate to develop environmentally safer welding electrodes. However, they cannot use that cooperation as an opportunity to agree on minimum selling prices.

11. Recommendations for Morocco

Morocco can strengthen competition in welding consumables through the following measures:

Increase monitoring of industrial input markets.

Investigate suspiciously coordinated tender submissions.

Improve transparency in welding consumables procurement.

Encourage entry by independent manufacturers and importers.

Monitor exclusive distribution arrangements.

Improve awareness of cartel prohibitions among industrial associations.

Encourage technical innovation and independent product certification.

Monitor mergers that could increase supplier concentration.

12. Conclusion

Competition Law in Welding Consumables Coordination in Morocco is principally governed by Law No. 104-12, particularly Articles 6 and 7.

Article 6 addresses agreements and concerted practices involving price fixing, market allocation, production restrictions and procurement coordination. Article 7 addresses abuses of dominant positions and economic dependence.

The eight comparative decisions discussed above provide important guidance on cartel conduct, information exchange, territorial restrictions, dominance, exclusivity and market concentration.

The European Commission's MIG/Carlyle/Eutect decision is especially relevant because it examines the actual welding consumables industry.

The fundamental legal principle is that welding consumables manufacturers, importers and distributors must remain commercially independent. They may cooperate to improve safety, technology and industrial efficiency, but they cannot coordinate their conduct to eliminate competition, artificially increase prices or divide the Moroccan market.

Legal qualification: The cited comparative decisions are analytical authorities, not proof of a Moroccan welding consumables infringement. A definitive Moroccan assessment would require evidence about the companies, agreements, relevant market and actual or potential competitive effects.