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All you would like to know about Competition Law, the Hellenic Competition Commission and its powers

Frequently asked questions

Free competition law is a set of rules aimed at protecting and promoting competition between companies producing, distributing and providing products and services, in order to achieve lower prices and larger quantities of products supplied, as well as to ensure high quality, existence of sufficient variety of products and the promotion of research and innovation for the benefit of consumers. These rules aim to maintain a competitive market structure for the strengthening of entrepreneurship and the enhancement of entry of new dynamic and innovative companies.
These fundamental rules concern, among others, the prevention, deterrence and suppression of illegal concerted practices (cartels) between companies, e.g., for the joint fixing of higher prices on products or for the artificial distribution of public tenders between competitors. There are also rules to prevent a company with significant market power (dominant company) from applying abusive and exploitative trade, pricing and promotional policies towards its suppliers, its wholesale and / or retail customers, and its final consumers.
In addition, the application of competition law requires the notification of concentrations (mergers and acquisitions), which meet specific high turnover thresholds, so that the Hellenic Competition Commission (HCC) can intervene ex post in order to prevent or control through the imposition of specific obligations/commitments, the creation or strengthening of the dominant position of a company which may abuse its position.

The Hellenic Competition Commission is an independent Administrative Body that enjoys administrative and financial autonomy. The main purpose of the HCC is to maintain and / or restore a healthy competitive market structure, which is mainly achieved through the fight against cartels, the prior control of mergers and the intervention against private (but also public) companies in the market which abuse their dominant position.
For this purpose, the HCC applies the national legislation for the protection of free competition (law 3959/2011) and the articles 101 & 102 TFEU.
The result of these interventions is the direct or indirect consumer protection and the strengthening of the Greek economy.

The Competition Commission has no market regulation authority to intervene for any kind of speculation with regard to illegal profiteering and/or unfair high pricing, except in two cases:

  • when it is the outcome of a cartel and / or
  • when it is imposed by a dominant firm that has abused its dominant position in one or more markets. With regard to excessive pricing, the latest EU and national case law is particularly restrictive for National Competition Authorities. A dominant company, according to competition law is one that has a market share of at least 40 to 45% in a specifically defined relevant market with substitute products.

In any case, for all other speculation and/or unfair high pricing cases, the General Secretariat of Commerce and Consumer Protection has the powers to apply consumer protection rules.

The HCC has a dual character, consisting of the Directorate-General for Competition (DGC), which is the investigative branch, and the Plenary Session of the HCC, which is the decision-making body of the authority.
The HCC is composed of eight Board members, namely the President and the Vice President of the authority, four full-time Rapporteurs, two Part-time Members, and their alternates.
Without prejudice to the dual character of the HCC, the Chairman of the Competition Commission (and the vice-president when he replaces him) is the Chief Administrative Officer of the staff of the HCC’s organizational units, and, inter alia, coordinates and directs the operation of the HCC and its organizational units in terms of administrative efficiency, but without being able to intervene in the interpretation and application of competition rules by the DGC at the stage of the investigation of a case before it is introduced in the Plenary. In addition to their role as members of the HCC, the Rapporteurs prepare the Statement of Objections, which are submitted to the HCC for decision-making. The employees of the Directorate-General for Competition, appointed by the Director-General, assist the Rapporteurs, who are in charge for the completion of the cases.
Moreover, the strategic objective of the DGC is to maintain or restore a healthy competitive market structure. To this end, the DGC, headed by the General Director identifies and evaluates the practices of undertakings that restrict or distort competition and takes all necessary action so that entry barriers to the markets are removed, ensuring that entry is free and open to all undertakings.

The main responsibility of the HCC is to maintain the proper functioning of the markets, which is achieved through the prevention and suppression of anti-competitive practices, in order to protect consumers and businesses. Specifically, the HCC is responsible for controlling / monitoring:

  • horizontal agreements between competing companies in product and service markets with the aim of restricting competition - cartels or other unfair agreements under which companies agree not to compete with each other in order to impose their own market rules, such as higher sales prices to customers, lower purchase prices to suppliers, customer distribution, lower quality products, lower investment in research and innovation, boycott against competitors pursuing an independent trade policy and so on,
  • agreements between companies at a vertical level (supplier / customer relationships) for specific practices, such as establishing resale prices (resale price maintenance – RPM), restricting the choice of suppliers and customers, subject to certain conditions in markets of products and services, including online markets and digital service platforms which expose the biggest challenge of our er,
  • the abuse of a dominant position - when a company with a market share such that it can act independently, disregarding the reactions of its competitors, suppliers or customers, engages in practices aimed at eradicating its competitors and / or exploiting suppliers and its customers, with an adverse final impact on consumers,
  • the concentrations (mergers & acquisitions) with which the companies join forces permanently to achieve specific business goals,
  • the Greek market sectors and, as long as it finds that there are no conditions for effective competition in this sector, it may, with a reasoned decision, take any appropriate regulatory measures concerning the structure of the market with the aim to promote healthy competition,
  • the legal provisions, draft laws and other regulations which may impede the functioning of free competition and HCC may therefore consult/ issue an opinion for their removal or amendment,
  • the implementation of the European Competition legislation, namely the articles 101 and 102 TFEU,
  • the close cooperation with the European Commission and the other National Competition Authorities of the other EU Member States for the implementation of European competition law.

See more about HCC’s powers at article 14 of law 3959/2011..

The Hellenic Competition Commission is NOT responsible for:

  • application of competition rules on the telecommunications and postal services markets, which are enforced by the national regulator, Hellenic Telecommunications and Post Commission (EETT).
  • practices concerning unfair competition (e.g., issues of defamation/denigration of competitors, illegal imitation of names and trademarks, misleading advertisements, etc.), which fall under the competence of the civil courts (Law 146/1914).
  • practices relating to the abusive exploitation by a customer or a supplier of economic dependency (e.g., imposition of arbitrary transaction terms, discrimination, sudden and unjustified termination of long-term business relationships). These practices fall under the competence of the civil courts (Law 146/1914).
  • state aid for which the European Competition Commission and the Central State Aid Unit at the Ministry of Finance (CSAU) are responsible.
  • private disputes and litigation that are part of the Civil Code and fall within the jurisdiction of the civil courts.
  • consumer disputes for which the Consumer Ombudsman is responsible.
  • issues related to food quality standards, food hygiene standards, auditing and control of businesses for compliance with norms, regulations and standards in food production etc., for which the Hellenic Food Authority (EFET) is responsible.
  • complaints for undeclared employment for which the Hellenic Labour Inspectorate (S.E.P.E.) is responsible.
  • complaints for tax or other financial infringements, for which the Special Secretariat for Financial and Economic Crime Unit is responsible (see SDOE).
  • issues related to the award of public contracts (e.g., complaints for “photographic assignments”), which fall under the competence of the Hellenic Single Public Procurement Authority (H.S.P.P.A.), and appeals for the execution or award of contracts for which the Authority for the Examination of Preliminary Appeals (AEPP) is responsible.

The Greek law for the protection of free competition (law 3959/2011) prohibits anti-competitive concerted practices (collusion) between companies with the aim of preventing, restricting or distorting competition in the market to a considerable degree.
The prohibition of article 1 of law 3959/2011 on “Protection of Free Competition”, covers the agreement between two or more undertakings. The “collusion” may be realized through an agreement (written or oral/ informal), decision by an association of undertakings or through a concerted practice. For instance, the decision by an association of undertakings concerns regulations of a trade association which give associations the power to determine how companies should behave in the market. The “concerted practice” refers to situations where companies apply a specific practice simultaneously without having a direct agreement. The anti-competitive concerted practice presupposes that some form of communication has taken place between the companies.

Examples of prohibited collusions (hypothetical scenarios)

  1. Company A is active in the market for the production and distribution of toilet paper, a particularly profitable market during the pandemic period. Company B. is active in the same market. Although company A is based in Athens and company B in Thessaloniki, their products are still available in supermarkets of the whole territory. Their joint pulp supplier decides to invite them to a meeting to determine the need for raw material supply for the new year. During the meeting A proposes to B to pursue a common trade policy in view of the high demand. B proposes to reduce the presence of A in northern Greece and respectively his own in southern Greece. The joint supplier suggests that they stop selling the products for a month in order to create an artificial shortage to increase their demand, thus increasing their profit margins after a while. In fact, since there is an exclusive market for its pulp and not other imported ones, he would talk about this issue with the National Supermarket Association (NSA), which, as he mentioned in A and B, can “address the issue and cut the offers, in order to let everyone win”.
  2. Company A is a wholesale - import company of electronic cigarettes. It distributes its products in the Greek market through a network of resellers. Some of them have physical stores, while some only operate online. In order to protect the reputation of the products it imports, A has set a minimum selling price for its e-cigarettes to the resellers. In fact, knowing that some resellers may try to take advantage of online shopping on weekends, when A’s employees do not control sales, he asks the resellers for the receipts of the sales under the threat of termination of their commercial relationship. However, the foreign producer and supplier of A, informed A that the imposition of minimum prices is illegal, and all that A can do is force the resellers not to advertise e-cigarettes below a certain price cap.

Agreements between undertakings must have a significant effect on competition in order to be prohibited. This is the case when the market share and the size of the cooperating companies are relatively significant. Cooperation between small or medium-sized enterprises, where the products affected by the agreement are a very small percentage of the relevant market ("agreements of minor importance/ de minimis” ), usually do not fall within the scope of prohibition (e.g., if undertakings have a common market share of not more than 10% of the relevant market in case of agreements between undertakings operating at the same level of production or distribution ("horizontal agreements") or 15% for agreements between suppliers and distributors ("vertical agreements") - see more in the European Commission’s De Minimis Notices.
However, certain types of agreements considered as hardcore restrictions of competition, such as cartels, do not fall within such conditions as regards market share and are always considered illegal (e.g. horizontal price agreements or vertical agreements on territorial protection).

In Article 1 of Law 3959/2011, there is a list of practices between two or more undertakings (collusions, concerted practices) which are considered to have as their object the restriction of competition (while other practices may ultimately have such effect). Classic examples of anti-competitive practices by-object concern:

  • Price fixing for products / services.
  • Production restrictions, e.g. agreements to reduce production or distributionl of products.
  • Market sharing, e.g. agreements on geographic distribution of product supply or customer allocation. /li>
  • Discretionary treatment and application of dissimilar conditions for equivalent trading transactions, refusal of sale / purchase, etc., e.g. when a producer comes to an agreement with its distribution network to prohibit the supply of a particular customer.
  • Conclusion of contracts subject to acceptance, by the other parties, of supplementary obligations, e.g., the dependence of the sale of a product on the sale of another undesirable product or service to a customer.

For the effective detection of prohibited horizontal agreements and in particular cartels, the HCC has a leniency program. The Leniency Program allows one company at any time to provide information for its own membership, past or current, in a cartel and to benefit in return from total or partial immunity from fines.

Examples of prohibited collusions (hypothetical scenarios)

  1. Company A and Company B manufacture and distribute on the Greek market chess boards and chess pieces. Because of a large number of chess-related series during the pandemic, the demand for all types of chess boards has increased to unprecedented levels. The director of A sent an email to the director of B to meet at the chess club "The Last Batch" to discuss matters of common interest. During the meeting, A placed on B the issue of the different price between wooden and magnetic chess boards. B agreed to increase prices on wooden chess boards and reduce prices to magnetic boards. They should also limit very cheap paper chess boards to concentrate on high-quality products. With regard to pieces, A suggested that they start selling them separately from chess boards and A to cover the production of white pieces and B of black ones. As the two managers are aware of competition issues since they know that the members of the Competition Commission often visit the chess club, they decided to exchange information on the development of their informal cooperation through an exchange of coded chess game movements through e-mail.
  2. The CEO of herbal cosmetics A met in a webinar for the safety of cosmetic products with the CEO of competitor B. During the break between presentations, A and B exchanged the following messages in the chat box:
    • A: Hi, what are you doing? I wanted to tell you about "C," who pulled me out of the top-eye shelves of all pharmacies! Can you imagine that? We have to get back at him...
    • B: Yeah, yeah, I found out, he started overestimating himself lately, I had told you, the wealthy strangers are going to take control... what do you suggest?
    • A: 10% discount... maybe I am going to stop supplying him the creams for about a month...
    • B: ΟΚ, I am in!
    • A: As for the perfumes he always wanted, he will have to buy them together with the Shampoo.
    • B: Great!

An agreement may be allowed as long as:

  • it has more positive than negative consequences,
  • the enterprises participating in it have only a small overall market share,
  • this is necessary for a specified period of time for the improvement of products or services, the development of new products or the finding of new and better ways of distributing products to consumers,
  • when competition is restricted, there is a significant benefit to consumers.

See more in Article 1 par.3 of Law 3959 / 2011 (and the respective Article 101 par. 3 TFEU).

Vertical agreements concern all agreements or cooperation among companies active at different levels in the production and distribution chain.

(hypothetical example):

The importer of electric cars "iX" concludes distribution contracts as well as technical support with distributors / dealers in each region of the country.

While there are cases where vertical restraints may restrict competition, in particular when one of the parties to the agreement has a strong market position, vertical agreements are in general considered to be less harmful (in relation to horizontal agreements between competitors) on the operation of distribution systems and thus for competition and consumers.
Vertical agreements may contain provisions that prevent, restrict or distort competition, known as "vertical restraints". For their assessment, the European Commission has adopted Regulation No. 330/2010. Essentially, the Regulation offers an exemption from the prohibitions laid down in Article 101 TFEU (and the equivalent Article 1 of 3959/2011) to categories of vertical agreements meeting specific criteria (i.e. they fulfill the criteria set out in Article 101 par. 3 and the equivalent Article 1 par.3 of law 3959/2011).
Therefore, vertical restraints covered by the block exemption are allowed, provided that none of the parties has a market share exceeding 30% on the markets covered by the contract and that the contract contains no hardcore restrictions e.g.:

  • when a supplier and a distributor agree on the imposition of compulsory minimum prices; or
  • when absolute territorial protection exists (e.g. prohibition of passive sales outside a given territory or also on the internet).

Example of illegal restriction (hypothetical example)

E.g. The supplier of cooking utensils A (pots, pans, etc.) imposes on its 13 distributors on the Greek market (one for each region) the resale price of products placed on the market. In addition, it prohibits distributors from advertising products outside their region and at the same time it prohibits them from selling to customers coming from another region from the one in which they are located even if these customers come by themselves in their shop or visit and order from its website.

Such restrictions are not covered by the exemptions provided by the Regulation even if the market share of the parties is below 30%. It is highly doubtful that such restrictions can be justified by Article 1 (3) of Law 3959 / 2011. Finally, other restrictions not covered by the Regulation concern non-competition clauses which last for a period of more than 5 years during a contract and non-compete clauses which remain in force for more than one year after the expiry of a contract.

Example of illegal restriction (hypothetical example)

E.g. In the franchise agreement for the new "Gourmet-grill" which lasts for 6 years, the franchisor, who is also a raw material wholesaler, imposes on the licensee (franchisee) to purchase all its raw materials (meat, other additives and complementary products, etc.) by him. It also requires it not to open another similar shop (e.g. a kebabstore) for four years after the expiry of the contract.

Abuse of a dominant position (or abusive exploitation of a dominant position) concerns practices which a dominant undertaking applies to the relevant market. A company is considered to be in a dominant position if it holds such market power that it can act without being constrained by its competitors, customers and suppliers. Usually, the high market share of a company is an important factor in the determination of a dominant position, e.g. a market share of more than 40%. Other factors which are considered significant for the assessment of the position of a company in the market and its determination as dominant or not are the respective market shares of competitors, market entry barriers, financial strength of the company, etc.

The definition of the relevant market is based on the substitutability of products as perceived by consumers on the basis of the price, characteristics and intended use of the product, for example, Cola type soft drinks are - most likely – interchangeable among them, but probably not in relation to other soft drinks (e.g. lemonade). The exercise for the definition of the "relevant product market" refers to a hypothetical price increase of 5-10%. If consumers switch to another product because of such price increases, then these two products belong to the same market, etc. The same exercise applies to the geographic market (i.e. if there is a price increase in one geographical market and consumers turn to another geographical area).

Being an undertaking in a dominant position does not itself affect competition, since the high percentage may result from the high appreciation of the company's products by consumers, etc. However, if an undertaking exploits its possession of a dominant position in order to eliminate competition, then there is evidence of abuse of dominance. The law prohibits the abuse of a dominant position in a specifically defined relevant market, stating (in Article 2 of law 3959 / 2011) a non-exhaustive list of practices such as:

  • the direct or indirect imposition of unreasonable purchase or sale prices or other trading conditions,
  • limiting production, distribution or technological development leading to consumer harm,
  • the application to trade of unequal conditions for equivalent benefits, in particular the unjustified refusal to sell, purchase or other transaction, thereby placing certain undertakings at a competitive disadvantage,
  • making contracts conditional upon acceptance by the trader of additional obligations which by their nature or according to commercial practices are not linked to the subject-matter of such contracts.

Example of abusive practice: (hypothetical example)

Company A is the largest producer and supplier to ouzo and tsipouro across Greece. It is estimated to hold around 80% of the market. The few smaller suppliers are struggling to enter restaurants, but A keeps covering the majority of the demand that exists. In addition to the quality of its beverages, A supplies other equipment to the shops in the form of promotion allowances/benefits (such as chairs and stools, tables and benches, umbrellas, glasses, etc.) to limit supplies from smaller suppliers. In recent years, a commercial policy has been launched for a bottle of ouzo + 1 bottle of tsipouro free of charge, provided that it ensures the exclusive supply of café-bars. A also dropped the price of the professional ouzo barrel of $20lt under its cost for six months. The latest news in the market is that A will start supplying new refrigerators to the stores where only the well-known products of "FROUZOPOTO" and "TSIPURUM" will enter. The above practices, if they are made by a dominant company, create conditions for the exclusion of - smaller - competitors. In particular, benefits in exchange for exclusivity, below cost pricing, the practice of 1 + 1 free of charge under certain conditions, as well as the obligation to exclude competitive products form refrigerators provided by the dominant firm free or at a low lease price, that lead to de facto exclusivity at the point of sale (e.g. where the point of sale has room for only one refrigerator), without objective justification may be contrary to competition law (Article 2 of Law 3959 / 11 and / or Article 102 TFEU). Such practices may restrict competition and the availability of competing products, may constitute non-reasonable trading conditions and may lead to the signature of commercial contracts conditional upon acceptance of additional benefits, all of which may be considered as anti-competitive practices by a dominant firm.

However, it is noted that a practice of a dominant undertaking may be objectively justified, e.g. refusal to sell to a customer who refuses to pay, etc.

You can contact the Hellenic Competition Commission and submit your complaint using the Digital Services. For more general information, you can also send a message via the HCC website or for confidential communication, contact the Directorate-General for the Competition (see the telephone directory). Since your business is involved in an illegal practice, you can use the Leniency Program or the Settlement Procedure, procedures that provide significant benefits to undertakings (e.g. total or partial immunity from a fine). You can also use the whistleblowing tool, were anonymity is fully protected through an encrypted application (see here).
More information about the Leniency Program can be found here.
More information about the Settlement Procedure can be found here.

There is no time limit for terminating an investigation regarding an infringement of free competition, (see respectively the European Commission and also here), as the duration of an investigation of such violations depends on various factors, such as the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the defense rights.
According to the statistical analyses of independent researchers for the European Competition Commission's investigations, the average duration of cartel cases handled by the European Commission in the years 2001-2015, from the launch of the investigation until the adoption of a decision, was approximately 50 months. It is noted that the shorter period was 20 months and the largest exceeded 100 (Source: Michael Hellwig & Kai Hüschelrath “Cartel Cases and the Cartel Enforcement Process in the European Union 2001 – 2015: A Quantitative Assessment” Discussion Paper No. 16-063 (September 2016) Centre for Economic Research, Table 17. The investigation concerned 90 cartel cases.)
The reduction of the investigation time shall be achieved either through the use of the Leniency Program or the Settlement Procedure Request. In each case, the provision of qualitative data with regard to the alleged practice reduces the workload and also simplifies and accelerates the investigation of practices and the timing of the administrative procedure by the Hellenic Competition Commission.

You can contact the Competition Commission through the link of Contact. Alternatively, you can contact any of the Directorates of the Competition Commission covering the particular sector / market in which you are active or for which you have relevant information (see the HCC’s. organizational chart).

 
 
 

Contact

Kotsika 1A & Patision
10434, Athens, Greece
210 8809100
contact(@)epant.gr

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