The Supreme Court has confirmed the Competition Authority's decision in a case of abuse of dominance by EKI Transfers doo and Tenfore doo. The court rejected EKI Transfers' appeal and upheld the authority's decision.
On January 12 2010 the Competition Authority rendered a decision on abuse of collective dominance on the market for consumer cross-border money transfer services by Eki Transfers and Tenfore, which had entered into an agency agreement with Western Union Network Ireland Limited. The two companies had abused their dominance by insisting on non-negotiable exclusivity and fidelity clauses in their agreements concluded with 24 banks. The clauses stipulated that the banks could not offer the services of Western Union's competitors to their customers for the term of the agreements (three to five years) and up to 18 months after their expiry. Moreover, the contracts were rolling contracts (ie, automatically renewable). In case of termination, the banks had to pay a contractual penalty.
The Competition Authority found that the concluded contracts had a network effect, and that the exclusivity and fidelity clauses foreclosed the relevant market. In assessing the effects of the practice on consumer welfare, the Competition Authority took the position that consumers suffered harm due to supra-competitive pricing and that their choice was reduced. As a remedy, the authority ordered amendments to the contracts and removal of the disputed clauses.
Eki Transfers filed a claim before the Administrative Court. However, the court rejected the claim and upheld the Competition Authority's decision. Eki Transfers then exercised the last available legal remedy available to it in this case and filed a request for reassessment with the Supreme Court. This request was also rejected and the Competition Authority decision became final and binding on March 28 2013.
For further information on this topic please contact Srdjana Petronijevic at Moravcevic Vojnovic i Partneri in cooperation with Schoenherr by telephone (+381 11 320 26 00), fax (+381 11 320 26 10) or email (firstname.lastname@example.org).
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.