December 18^th, 2012

Foreign Language Schools

Anti-competitive agreements, Anti-competitive Decision of Associations of Undertakings

Articles 1 and 25 par. 6 of L. 3959/2011

Finding of infringement. Acceptance of commitments by an Association.

Ex-officio investigation

1.PROFESSIONAL ASSOCIATION OF FOREIGN LANGUAGE SCHOOL OWNERS IN HERAKLION PREFECTURE

2.PROFESSIONAL ASSOCIATION OF FOREIGN LANGUAGE SCHOOL OWNERS OF NOTHERN GREECE

3.PROFESSIONAL ASSOCIATION OF FOREIGN LANGUAGE SCHOOL OWNERS IN CHANIA PREFECTURE

4.PROFESSIONAL ASSOCIATION OF FOREIGN LANGUAGE SCHOOL OWNERS IN SERRES PREFECTURE

5.PROFESSIONAL ASSOCIATION OF FOREIGN LANGUAGE SCHOOL OWNERS IN KILKIS PREFECTURE

6. PANHELLENIC ASSOCIATION OF FOREIGN LANGUAGE SCHOOL OWNERS

Acceptance of commitments by the:

PANHELLENIC CONFEDERATION OF FOREIGN LANGUAGE SCHOOL OWNERS

In its decision, the Hellenic Competition Commission found that certain professional associations of foreign language school owners which are mainly active in Metropolitan Athens area, Northern Greece, and Crete infringed Article 1 of Law 703/1977 (now Article 1 of Law 3959/2011), notably by engaging in price-fixing practices and by unduly restricting the exercise of the professional activities of their members (foreign language school owners).

According to the decision, the said professional associations of foreign language school owners – based on a series of decisions/recommendations adopted by their respective governing bodies and/or provisions in their statutes, internal regulations and other rules of conduct – sought, depending on each individual case, either to fix the fees charged to students by their members (e.g. minimum fees, discount terms and restrictions) and/or to coordinate other important parameters of their member’s commercial activity (e.g. non-compete clauses, exclusionary clauses regarding students’ participation in foreign language examinations, excessive advertising restrictions).

For the above infringements of the Greek Competition Act, the Commission imposed fines totaling € 855.356. In particular, and depending on the gravity and duration of each infringement, the following fines were imposed to each association of undertakings:

1. Professional association of foreign language school owners in Heraklion Prefecture: € 378.902 (with mitigating circumstances),

2. Professional association of foreign language school owners of Northern Greece: € 267.084,

3. Professional association of foreign language school owners in Serres Prefecture, € 85.229,

4. Professional association of foreign language school owners in Chania Prefecture, € 83.037 (with mitigating circumstances), and

5. Professional association of foreign language school owners in Kilkis Prefecture, € 41.104. According to the Greek Competition Act. It is mentioned that if a fine is imposed on an association of undertakings, taking account of the total turnover of its members, and the association is not solvent, the association shall be required to call for contributions from its members to cover the amount of the fine.

By the same decision, the Competition Commission addressed a warning to the Panhellenic Association of foreign language school owners (Europalso) for another infringement of Article 1 of Law 703/1977 (now Article 1 of Law 3959/2011). Furthermore, the Competition Commission decided to accept, under article 25 par. 6 of L. 3959/2011, the updated commitments proposed by the Panhellenic Confederation of foreign language school owners (PALSO) in order to meet competition concerns expressed to it by the Commission with regard to non-compete clauses restricting the ability of their members to engage and/or participate in foreign language exams organised by competing organisations and issue language certificates (in addition to those approved by the Confederation).Finally, the Commission threatened with the imposition of fines in case of non-compliance.