The Supreme Court of Cyprus provided useful guidance on the definition of 'undertaking' and 'association of undertakings' in a December 7 2015 judgment (Case 259/2013). The case concerned an administrative recourse against a decision of the Commission for the Protection of Competition.
On March 30 2012 the commission held against the Limassol Licenced Porters Association (LLPA) after examining complaints filed on September 18 2006 by individuals that had been refused entry into the profession. The commission found that the LLPA had displayed restrictive behaviour and abused its dominant position in violation of the Protection of Competition Law. On November 19 2012 the commission imposed an administrative fine of €214,063 on the LLPA.
The individuals who filed the administrative recourse against the decision did so in a personal capacity or as members of the LLPA's board of internal management. The individuals claimed that the commission's decision had been issued contrary to applicable law because the LLPA was a non-existing legal person and had no substance under private or public law, as it was a non-incorporated organisation.
The court dismissed the administrative recourse on a number of grounds; however, the grounds regarding the classification of entities as 'an association of undertakings' are notable due to the guidance offered.
The commission's lawyer cited the Protection of Competition Law and European Court of Justice (ECJ) case law regarding the definitions of 'undertaking' and 'association of undertakings', which include entities engaged in economic activities regardless of their legal status and how they are financed.
The court analysed the definitions of 'undertaking' and 'association of undertakings' by considering:
- the various applications of the terms in ECJ and Supreme Court case law;
- Hellenic Competition Commission decisions; and
- the work of relevant legal practitioners.
The court accepted the commission's position that licensed porters were not Cyprus Port Authority employees and were instead self-employed – and that they employed third parties to perform their activities; they could therefore be classified as 'undertakings' under the Protection of Competition Law, since they offered services and carried out financial and commercial activities from which they received financial gain.
The court held that on the basis of the information provided to the commission, the LLPA as an entity lacked legal personality. Accordingly, when examining whether the LLPA constituted an 'association of undertakings' under the Protection of Competition Law, the court accepted the commission's submission that the LLPA fell within said definition as it represented the economic benefits of other distinct undertakings (ie, its members, whose services the LLPA had undertaken to organise and who it represented before various councils). Further, the insurance policies presented mentioned the LLPA as the insured party. Accordingly, the LLPA was presented as providing services and exercising activities of a purely financial and commercial nature, regardless of whether these activities were aimed at securing a profit.
Further, the court held that the differentiation of LLPA members during the commission's examination of the complaint did not oblige the commission to identity the licensed porters responsible for the behaviour under investigation, since the complaint and the administrative fine imposed did not concern them in a personal capacity. Further, the court noted that the services offered by the LLPA (ie, the transfer and delivery of cargo by licensed porters and the operation and use of specialised machinery and installations) made it the sole operator at Limassol Port with the necessary equipment and personnel to manage heavy loads and customer demand during the period under examination.
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