Cartelsi Preliminary remarks
As previously stated, the general provisions contained in Article 101 TFEU have been introduced word-for-word into the Greek legal system (Article 1 of Law 3959/2011), and the HCC aims to follow the jurisprudence of the European Commission and the European courts in the case of cartels. Even though it has adopted a leniency policy, and declares itself open to considering any commitments to remedy the effects of cartels prior to discussing any case, in practice, the way the HCC deals with cartels has not changed. The leniency policy was only successfully applied for the first time in 2017, in a major cartel case involving more than 40 companies in the constructions sector. That being said, the HCC has been making extensive use of the settlement mechanism in cartel cases, having issued five settlement decisions within just two years of its adoption.ii Penalties – leniency policy
In the case of an infringement of Article 1 of Law 3959/2011, fines of up to 10 per cent of the total turnover of the undertaking can be imposed by the HCC. The HCC has also adopted the practice of the European Commission according to which, in cases where the violation concerns a specific product or sector, a maximum fine of 30 per cent of the turnover for that sector applies, but this cannot exceed 10 per cent of the overall turnover provided for by law. There could also be criminal liability of the persons who initiated or participated in the formation and implementation of the cartel. In August 2011, the HCC adopted a leniency programme based on the European Commission's programme providing for immunity or reduction of fines. In 2017, the programme was applied successfully for the first time in a major cartel case in the constructions sector (as analysed further below); however, that application, only one known application had ever been made, which was unsuccessful.
In addition, the parties can (according to Article 6, Paragraphs 5 and 6 and Article 8, Paragraph 8 of Law 3959/2011) offer binding commitments to remedy the effects of a cartel. If the HCC accepts these commitments, then the procedure comes to an end and no fines are imposed. Following one of the first cases, in 2008, when the HCC had accepted such commitments, the HCC is generally reluctant to accept commitments, using the argument that these cannot be accepted in hardcore (per se) violations. There have, however, been some more examples in the past few years where it was considered that commitments would be more efficient than 'traditional' enforcement and the imposition of fines. Indeed, the HCC's priority should be to protect the mechanisms of the market rather than applying huge fines, which are counterproductive.
In the case of DEPA, the incumbent gas operator in Greece, since the original commitments decision (551/VII/2012) was issued in 2012, five more commitments decisions have been issued by the HCC The later decisions have updated the commitments undertaken by DEPA, following an examination of the undertaking's compliance as well as of the effectiveness of the commitments as time progressed. Following a meeting in plenary session in December 2016, the HCC issued in 2017 a decision eliminating a commitment concerning the method of formation of the starting price of electronic bids for natural gas, in view of the liberalisation of the natural gas market from 1 January 2018. During 2018, the HCC published decision No. 635/2016, following an ex officio investigation of the compliance of DEPA with the commitments that it had originally undertaken by virtue of decision 551/VII/2012. The HCC fined DEPA €60,000 for failure to comply with one out of seven commitments (i.e., to offer an unbundled natural gas sales contract without obliging customers to include the provision of services for the transfer of natural gas).
This year saw the HCC accept commitments by Nissan dealer Nik I Theocharakis SA with regard to alleged vertical practices concerning its policy towards independent repairers on the provision of technical information for the repair and maintenance of Nissan vehicles, and the terms of granting discounts during short-term 'central' discount programmes for technical services to specific customers. On the other hand, the HCC upheld its policy in rejecting commitments for hardcore restrictions in the Minerva case, which concerned the imposition of RPM and the prohibition of passive sales in vertical agreements with its distributors in the butter and margarines markets. The HCC proceeded to the full investigation of the case, which led to the imposition of a fine amounting to €384,106.
Although the law provides that undertakings can be offered commitments after the assessment of a violation, the guidelines provide that these can also be offered at the beginning of the process; this constitutes a useful compromise, which avoids further use of time and resources while achieving a result similar to a consent decree.iii Settlement procedure
On 18 July 2016, the HCC issued Decision 628/2016 by which it formally established a settlement procedure for cartel infringements, thus further bringing its practice in line with that of the European Commission, which first introduced this procedure in 2008. Pursuant to the Decision, companies may express their interest, in writing, to partake in the settlement procedure, either before the issuance of a statement of objections or after, within a maximum of 35 days prior to the date set for an oral hearing (in contrast to the European Commission, which will always carry out the procedure prior to the issuance of a statement of objections). The HCC meets in plenary session to approve or reject these expressions of interest, and if it approves them, proceeds to holding bilateral meetings with each implicated undertaking, wherein it set outs the facts of the case, the scope of the infringement and the extent of the participation of the undertaking concerned, the key evidence on which it bases its findings, as well as the range within which the fine can be expected to fall.
Following the conclusion of these meetings, which can be as few or as many as the HCC deems necessary in each case, an undertaking is then given a 30-day deadline within which to file its settlement submissions, by which it must unreservedly admit its participation in, and liability for, the cartel, accept the (maximum) range of the fine which may be imposed, and forgo the right to receive full access to the file and to an oral hearing before the HCC. The HCC then issues a proposal accepting or rejecting the settlement submissions and setting out the conclusions of the meetings and, if the undertaking concerned accepts this proposal, a settlement decision is issued officially by the HCC.
Prior to issuing a settlement decision, the HCC is neither bound nor limited by anything that took place during the procedure and maintains the right to terminate it. Upon so doing, the settlement submissions and proposal are wholly revoked and may not be used as evidence against the implicated undertaking by either the HCC or by the competent courts on appeal. Unlike the European Commission, which offers a 10 per cent reduction, the HCC offers a 15 per cent reduction of the fine for cases that successfully complete the settlement procedure. Viewed in light of the ongoing financial crisis in Greece, which has hit businesses especially hard, it is anticipated, and has been confirmed in practice, that this settlement tool will often be put to use.
In fact, the issue of this HCC decision essentially – and most likely, purposely – coincided with the issue of a statement of objections for the largest case ever dealt with by the HCC, both in terms of the number of implicated undertakings (40) and the fines threatened (over €200 million). The statement of objections was issued following an ex officio investigation into tenders submitted, and respective contracts awarded, for public infrastructure works, which concluded that bid rigging took place on a significant scale, covering multiple projects and spanning the better part of 26 years. The settlement decision was eventually issued on 10 March 2017, and was followed by a standard hearing procedure for the undertakings that did not participate in the settlement. The decision for the non-settling undertakings is still expected.
Since then, the HCC has been making extensive use of the settlement procedure, by issuing another three settlement decisions in 2018. The increase of the importance of the settlement procedure is apparent from that it is tested in most horizontal cases that the HCC has dealt with since its inception (although not all undertakings involved in those cases wished to settle).iv Significant casesCartels
Enforcement against cartels in 2018 was 'soft' compared to 2017 when the HCC imposed fines amounting to €80.702 million in the constructions cartel case, the biggest case ever to be investigated by the Greek competition authority. The fine concerned the companies that entered into the settlement procedure; for the non-settling companies, the HCC has not yet issued its decision.
In 2018, cartel enforcement concerned cases of relatively lower importance and was characterised by the universal application of the settlement procedure for all of them.Construction companies
On 14 December 2018, the HCC issued a settlement decision against five construction companies for bid rigging in a public tender for the construction of school infrastructure in the Fthiotida region that took place in March 2011, and imposed fines amounting to a total of €245,000. The case concerned a total of 13 construction companies, eight of which decided not to follow the settlement procedure; the HCC's decision on the latter companies has not yet been issued.Newspaper distribution
In October 2018, the HCC settled yet another case involving newspaper distributors Argos SA and Europi SA. More particularly, the HCC, following complaints of points of sale for unjustified exclusion from the supply of newspapers, imposed a total fine of €500,000 on the two companies respectively for a horizontal agreement between them, lasting from 2001 until 2017, that included price and agent commission fixing, as well as allocation of territories and customers. Aside from the fixed 15 per cent reduction due to the application of the settlement procedure, the fine was reduced significantly by another 30 per cent because of the major decline of the newspaper industry over the last years.Dairy products
On 8 October 2018, the HCC issued a settlement decision on a cartel case involving dairy producer Friesland Campina and its wholesaler Mandrekas SA for placing restrictions on the latter's participation in public tenders for milk supply for the period 2003–2007. Although the two companies normally have a vertical relationship (supplier-distributor), the purpose of these restrictions was to prevent the possibility of participation – and therefore, competition – of the two companies (supplying the same brand) in the same tender. The originality of this case lies with the fact that it is the first one where all implicated companies applied for the settlement procedure and, surprisingly, before notification of a statement of objections. These factors were taken into account with the imposition of a small fine of €160,225 for Friesland and €11,328 for Mandrekas.v Trends, developments and strategies
There are no notable published investigations or pending cartel cases yet for 2019. A decision is still expected for the non-settling companies in the major Construction Companies cartel case.