On November 10 2014 the Competition Agency announced that it had concluded another proceeding dealing with resale price maintenance, as prohibited under Article 8 of the Competition Act, which mirrors Article 101 of the Treaty on the Functioning of the European Union.
Although the full decision has not yet been published, the agency's stance on resale price maintenance can be inferred from the announcement and earlier decisions in similar resale price maintenance cases in the food and retail sectors.
The agency has had the authority to impose penalties independently since October 1 2010. Previously, the imposition of penalties fell under the competence of the misdemeanour courts. Due to an inappropriate or imprecise – depending on the point of view – technicality, the Competition Act does not contain stable transitional provisions which would determine competence for imposing penalties in relation to infringements which occurred before October 1 2010 (the statutory limitation period for such infringements is five years, which makes this issue still highly relevant).
Further, the agency rendered two important decisions in August 2014, establishing resale price maintenance in the food and retail sectors and imposing fines. The recent announcement confirms the agency's commitment to action in these sectors.
In its recent decision, the agency found that the purchase agreement entered into by Carlsberg Croatia and KTC contained provisions that fixed the minimum retail prices (ie, resale price maintenance clauses). The agency imposed total penalties of HRK600,000 (€78,226): Carlsberg Croatia was fined HRK500,000 (€65,189), while KTC was fined HRK100,000 (€13,037).
However, the agency stated that the fines were only symbolic, bearing in mind that:
- the duration of the prohibited agreement had been relatively short;
- the undertakings had revised the challenged provisions on their own initiative before the agency initiated proceedings;
- it had not been established that the prohibited provisions significantly impeded competition; and
- the parties cooperated with the agency during the proceedings.
The agency further stated that the intended effect of the ongoing monitoring is deterrence – that is, the fines imposed are meant as a warning to other undertakings not to infringe competition law.
In light of this, several conclusions may be drawn. In its last decision the agency again showed that it has strengthened its practice regarding resale price maintenance and that it will impose penalties notwithstanding mitigating circumstances or the duration of the infringement. The decision confirms that the agency's attention is focused on the retail and food sectors, since the majority of cases related to prohibited agreements are connected to these sectors.
Finally, this means that undertakings are advised to take extra caution, as well as actions towards alignment with competition rules.
This article was edited by and first appeared on www.internationallawoffice.com.