Antitrust: restrictive agreements and dominancei Significant casesVertical agreements, restrictive franchise agreements and abuse of dominant position
While there have been several decisions reached by the HCC on vertical agreements over the years, very few of those have dealt with franchise networks. Thus far, the most comprehensive decisional guidance offered by the HCC on restrictive franchise agreements has been Decision No. 580/VII/2013, pursuant to which one of the largest Greek telecoms retail chains, Germanos SA, was fined €10.2 million for including problematic clauses restricting competition in the standard agreements it concluded with franchisors for over 22 years (from 1990 to 2012).
On appeal, in Decision No. 527/2016 of the Athens Administrative Court of Appeal, the HCC decision was quashed, in part, on grounds that are entirely novel for a competition case. The Court of Appeal, while upholding the infringement in substance, quashed the fine because it had been levied by the HCC as a total sum of €10.2 million when what it should have done – according to the Court – was apportion the fine for each anticompetitive conduct that was separately identified. The decision was remitted to the HCC so that it could correctly apportion the fine for each infringement (RPM, distributor-franchisor supply restrictions and excessive non-competition clauses), which it duly did in October 2016.
This judgment may have potentially far-reaching (positive) consequences for future appeals of HCC decisions; it forces the HCC to specify the infringements comprising anticompetitive behaviour by quantifying each one separately. Given that, in the past, certain HCC decisions have been somewhat nebulous in setting out a link between violation and fine, this, at the outset, appears to be a welcome jurisprudential development.
Moreover, the recent relative increase over the past years of franchise decisions may be a sign that the HCC intends to place greater focus on such cases in the future. The franchise system is fairly widespread throughout Greece, and covers a wide range of products and services offered at the retail level, so we can potentially expect to see more such cases in the future.
In 2018, however, the HCC turned its eye away from franchise agreements, which had been the focus of 2017, and focused its antitrust enforcement intensively on the food sector. In October 2018, the HCC issued a decision against Elais-Unilever on two counts of abuse of dominance (alleged target rebates and prohibition of parallel promotion of competing products) and three counts of vertical restrictions (alleged RPM, market partitioning by territories and customers, and non-compete obligations) in the margarines market, spanning from 1996 until 2017. The HCC fined Elais-Unilever a total of €27,561,704, which is one of the highest fines that the Greek competition enforcer has ever imposed. The case is mostly interesting in the sense that, although it is the first one to follow the ECJ's Intel case, the HCC eventually followed the 'traditional' approach of older EU Court decisions that dealt with retroactive target rebates as 'presumptively' anticompetitive, and considered further economic effects analysis as redundant and merely complementary.
Earlier in the same year, again in the same market, the HCC fined Minerva (Unilever's main competitor) €384,106 for imposing minimum resale price maintenance on its distributors for the period 1997–2010, and rejected as unfounded the rest of the accusations regarding prohibition of passive sales and alleged non-compete obligations. The small portion of the market affected by the practices, their scarce application over the years and Minerva's, albeit unsuccessful, intent to enter into the commitments procedure were deemed to be mitigating factors that contributed to the low amount of the fine.
Finally, in the pharmaceuticals sector, the HCC found, following a referral of the case from the Athens Administrative Court of Appeals, that the companies GlaxoSmithKline AEBE and GlaxoSmithKline PLC abused their dominant position in the market for anti-migraine drugs by refusing to supply to wholesalers engaging in parallel exports of the Imigran and Lamictal drugs, for the years 2000–2004; the fine amounted to €2,919,378. The HCC assessed the legality of refusal to supply based on the criterion of 'ordinary' orders formulated by the ECJ in joined cases C-468/06 to C-478/06, following a reference for a preliminary ruling by the Athens Administrative Court of Appeals. Refusals to respond to 'ordinary' orders were deemed abusive, whereas refusals to supply to orders that were not ordinary (because they were disproportionate to the volumes usually sold by the resellers making the orders) were not abusive. With the same decision, the HCC also found that GlaxoSmithKline failed to comply with the interim measures HCC decision No. 193/III/2001, by virtue of which the company had been ordered not to refuse supplies of the Imigran, Lamictal and Severent drugs irrespective of the volume of the orders.ii Trends, developments and strategies
Antitrust enforcement in the food sector is bound to continue, since the HCC has also issued a statement of objections against Friesland Campina for alleged abuse of dominant position (due to imposition of exclusivity rebates) and illegal vertical agreements with its distributors, which include RPM and non-compete clauses, for the period 1996–2009. The case hearing took place on 4 December 2018 and a decision is awaited. The same company was fined in 2018 for entering into a horizontal agreement with one of its wholesalers to prevent their parallel participation in public tenders for the supply of milk.
In a completely different context, the HCC, following a hearing on 25 September 2018, is expected to issue a decision on alleged Article 1 vertical violations by companies Gambro Lundia, Iatrika Proionta and Mpaxter Hellas, which include parallel trade restrictions and geographic market allocation in the market for artificial kidney machines and services.