Electric bikes, does German Bosch hinder Italian Blubrake?
An all-Italian David against a German Goliath. The Blubrake startup with a turnover of around 2 million is challenging the giant Bosch before the AGCM, which closed the last financial year above 88 billion. Here because
The Competition and Market Authority (AGCM) has started an investigation against the company Robert Bosch GmbH to verify the hypothesis of abuse of a dominant position on the European market for propulsion systems for electric bicycles.
REASON FOR DISPUTE
According to what was hypothesized in the opening provision, Bosch would not have allowed electrical and digital interoperability between its propulsion systems and the ABS for electric bicycles produced by the Blubrake company, apparently without any valid justification. According to the Authority, such conduct could exclude Bosch's only competitor in the European market for ABS for electric bicycles.
THE START-UP CHALLENGES THE GIANT
According to Blubrake, a start-up based in Italy founded in 2015 as a spin-off of the Polytechnic University of Milan, now part of the Italian industrial group e-Novia, with a turnover of around 2 million euros in 2022, the German multinational is hindering the attempts of the Italian company to offer its ABS to manufacturers of e-bikes equipped with the Bosch e-kit. In particular, Bosch (with a turnover of 88 billion) is allegedly creating a series of obstacles to the assembly and use of Blubrake ABS on e-bikes equipped with a Bosch e-kit, thus encouraging the purchase, assembly and use of your own ABS, to the detriment of that of Blubrake.
Blubrake reports to the Italian authority that this strategy has had the effect of preventing it from accessing the majority of e-bike manufacturers, which remains the predominant prerogative of Bosch. This would be jeopardizing its growth prospects and the budding development of the only form of competition currently existing in the e-bike ABS market with significant growth potential.
THE LOSS OF CUSTOMERS COMPLAINED
In particular, the Italian start-up reported – as emerges from the Agcm investigation – that an e-bike manufacturer was contacted at the end of 2018 to evaluate the possibility of equipping some e-bike models that would have had an e-bike kit from Bosch – the BES2 – with Blubrake ABS. The Bosch Y-cable was however incompatible with the Blubrake ABS. Nor was there a Y-cable developed specifically by Bosch to connect the Blubrake ABS to the e-kit, despite the existence of market practice in this regard for third-party components.
Blubrake and its potential customer then began collaborating to develop a new compatible Y-cable by modifying the Bosch one (but keeping it technically identical). The electrical functioning tests carried out with the cable made by Blubrake in February 2019 gave positive results and were communicated to the customer. The latter, however, represented to Blubrake his concerns in relation to possible problems that Bosch would have raised regarding the warranty of the e-kit, which according to the e-bike manufacturer itself, would not depend on technical issues, but on the fact that Bosch would not have allowed an ABS other than its own to be integrated with the BES. At the beginning of 2019, Blubrake offered the potential customer an alternative solution based on the replacement of one of the connectors of another Bosch Y-cable. The solution was tested and approved by the customer, who started the production of some e-bike models equipped with the Bosch e-kit and Blubrake ABS, which would be available in resale shops from the first months of 2020.
Subsequently, Bosch contacted the e-bike manufacturer listing a series of alleged possible quality and safety risks related to the integration of the Blubrake ABS with its e-kit using the Y-cable modified by Blubrake, and reported that , in the event of accidents, would have reported these risks to buyers. Blubrake reassured the customer about every single possible technical risk feared by Bosch. Nonetheless, the e-bike manufacturer stopped responding to Blubrake's communications without providing any justification for the interruption of the collaboration, which was never resumed.
A similar event then also occurred with another ebike manufacturer, which in 2020 contacted Blubrake to mount Blubrake ABS on some models of its e-bikes equipped with BES. Also in this case the integration of the Blubrake ABS with the Bosch e-kit would have been implemented, with the approval of the new potential customer, through the second technical solution already identified for the previous one. The e-bike manufacturer proceeded to build the frames and order samples to do the final integration tests. From what has been acquired so far in the documents it emerges that the e-bike manufacturer subsequently abruptly interrupted contacts with Blubrake without explanation.
BOSCH, THE AGCM MOVES
In recent days, the officials of the Italian authority participated in the inspections conducted in the foreign offices of Bosch and of other entities deemed to be in possession of useful elements for the investigation, with the assistance of the officials of the German and Dutch counterpart bodies; inspections were also carried out at the offices in Italy, with the help of the Special Antitrust Unit of the Guardia di Finanza.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/bici-elettriche-la-tedesca-bosch-ostacola-litaliana-blubrake/ on Mon, 18 Sep 2023 13:08:47 +0000.