Complaints procedure for private parties

Is there a procedure whereby private parties can complain to the authority responsible for antitrust enforcement about alleged unlawful vertical restraints?

Yes, private parties (an individual or legal entity having a legitimate interest) can complain to the authorities in misdemeanour procedures about alleged unlawful vertical restraints. The procedure can also be initiated by the Commission ex officio. The misdemeanour procedure is conducted by a separate department within the Commission with active participation of the undertakings.

Regulatory enforcement

How frequently is antitrust law applied to vertical restraints by the authority responsible for antitrust enforcement? What are the main enforcement priorities regarding vertical restraints?

The Commission’s practice with vertical restraints is substantial, although it is mainly focused on concentrations and misuse of dominant position.

What are the consequences of an infringement of antitrust law for the validity or enforceability of a contract containing prohibited vertical restraints?

There is no severability for hardcore restrictions. If there are one or more hardcore restrictions, the entire vertical agreement is not exempted. Vertical agreements are subject to block exemption on condition that they do not include any hardcore restriction or no such restriction is practised with the agreement.

The rule of severability applies to the excluded restrictions. Therefore, contract provisions that do not comply with the conditions set out in article 6 of the Decree shall be null and void.

May the authority responsible for antitrust enforcement directly impose penalties or must it petition another entity? What sanctions and remedies can the authorities impose? What notable sanctions or remedies have been imposed? Can any trends be identified in this regard?

The Commission has authority to determine that a vertical agreement falls under the scope of prohibited agreements under article 7(1) of the LPC in a misdemeanour procedure. Concluding a prohibited agreement or participating in some other manner in an agreement, decision or concerted practices leading to distortion of competition within the meaning of article 7 of the LPC is a serious misdemeanour and is sanctioned with a fine of up to 10 per cent of the value of the total annual turnover in the last business year, plus a temporary ban on the performance of a specific activity by the undertaking for between three and 30 days, and a ban on the performance of an occupation, activity or duty for between three and 15 days for an individual.

When the misdemeanour is committed by an association of undertakings and refers to the activities of its members, the fine shall not exceed 10 per cent of the sum of the aggregate annual turnover calculated in absolute and nominal amount of each member of the association acting in the relevant market.

The party in the misdemeanour procedure may offer commitments to overcome distortion of competition; in urgent cases the Commission may impose interim measures (order cessation of certain actions, fulfilment of certain conditions or other measures) and, if necessary, modify their duration. When the misdemeanour is determined, the Commission may impose the necessary behavioural and structural measures to eliminate the harmful effects of the distortion of competition and to reinstate effective competition.

In 2018, the Commission closed four cases with final and absolute decisions and imposed fines amounting to €181,000, for various breaches of article 7(1) of the LPC.

Investigative powers of the authority

What investigative powers does the authority responsible for antitrust enforcement have when enforcing the prohibition of vertical restraints?

The Commission is authorised to collect from the undertakings (directly by inspection and dawn raid at their premises or voluntarily) data regarding their economic-financial condition, their business relations, their statutes and decisions, the number and identity of the persons affected by such decisions and other data. Failure to provide requested data or providing incorrect, incomplete or misleading data, or hindering the inspection, is considered as a misdemeanour and is sanctioned with a fine of up to 1 per cent of the total value of annual turnover in the last business year.

The participants in the procedure have a right to state their opinion regarding the facts and circumstances relevant for establishing the actual state of affairs as defined by the Commission in the preliminary and in the final statement (before adopting a decision on misdemeanour).

The Commission may demand information from suppliers domiciled outside its jurisdiction.

Private enforcement

To what extent is private enforcement possible? Can non-parties to agreements containing vertical restraints obtain declaratory judgments or injunctions and bring damages claims? Can the parties to agreements themselves bring damages claims? What remedies are available? How long should a company expect a private enforcement action to take?

Private enforcement is subject to the general rules for damage compensation under the law on obligations. If any action constituting a misdemeanour in accordance with the provisions of the LPC causes damage, the damaged party may seek indemnification (follow-on claim) in a regular court proceeding.

Consumers and non-parties to the agreement can act as applicants or interested parties in the administrative procedures (and may be consulted in specific phases of the procedure). They may initiate a court procedure on the basis of the law on obligations that imposes a ban on the misuse of a monopolistic position, even before the Commission determines misdemeanour liability of undertakings; however, the burden of proof (misuse of a monopolistic position) in this case shall be on the consumer.

In both cases, the consumer may request the regular court to issue some interim measures against the undertaking, subject to making the consumer’s claim probable and credible. During the court procedure, the consumer will need to prove its legal interest or the damage suffered by it, or both. The successful party is entitled to recover its legal costs from the opponent. The procedure takes a minimum of one year.