An extract from The Public Competition Enforcement Review, 12th Edition
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 six settlement decisions within just three 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 these 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.
This year saw the HCC accept commitments by DIAGEO with respect to certain of its practices in the gin, whiskey and ready-to-drink alcoholic products, where DIAGEO allegedly holds a dominant position. The commitments concerned the lifting of 'pouring' and 'marketing and visibility' exclusivity clauses in agreements with on-site consumption points of sale. On the other hand, the HCC rejected commitments in the case of the incumbent newspaper distributor Argos; this concerned the unilateral (and allegedly abusive) imposition by Argos of a new commercial policy to newspaper publishers with disadvantageous terms for the latter, and carried – out an interim measures procedure instead to prevent the implementation of the policy and force negotiations between the interested parties.
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, on purpose – 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.
Since then, the HCC has been making extensive use of the settlement procedure, by issuing another four settlement decisions in 2018 and 2019. 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 2019 was increased compared to 2018, where cases of relatively lower importance had been examined. Following public announcements for simultaneous price increases, the HCC conducted its (biggest up-to-date) dawn raid to all major Greek banks on suspicions of price-fixing in ATM and other bank services charges. What is more, the HCC issued its decision for the non-settling companies involved in the constructions cartel case, the biggest case ever to be investigated by the Greek competition authority, by virtue of which it imposed fines totalling €27.2 million on charges of collusive tendering between several major construction companies (both Greek and foreign).Electricians' associations
The HCC announced on 23 September 2019 that it imposed fines, by application of the settlement procedure, totalling €145,010.96 to several electricians' associations that imposed, mostly through provisions included in their respective charters and association decisions, fixed prices for the provision of various electricians' services. The associations were also charged for coordinating the distribution of fees amongst their members and monitoring compliance of their members with these illegal practices. The case was the only one in 2019 where the settlement procedure was applied.
Another decision on the same case was issued for the non-settling Association of Contractors of Electricity Works in Attica, where the HCC found that the association imposed uniform charges for the rendering of electricians' services to its members through charter provisions, and threatened sanctions albeit without imposing fines.v Trends, developments and strategies
Overall, it appears that the HCC has taken a turn toward more pre-emptive action against cartels, by emphasising dawn raids and ex officio investigations and by acting swiftly on complaints and news publications about price increases in specific sectors. It is awaited with great interest whether the dawn raid conducted against the major Greek banks will result to the issuing of a statement of objections for price-fixing charges.