Friday, 21 January 2022 13:21

Press Release - Decision No 750/2021 – Ex officio investigation in the market of the installation and maintenance of elevators (Settlement Procedure)

Subject: Decision following Article 25a of Law 3959/2011 and the Hellenic Competition Commission (“HCC”) Decision No 704/2020 on the ex-officio investigation in the market of the installation and maintenance of elevators for possible violation of Article 1 Law 3959/2011

Summary

The Hellenic Competition Commission (HCC), in plenary, unanimously adopted Decision No 750/2021 according to the simplified Settlement Procedure (Article 25a of Law 3959/2011 and Decision No 704/2020) following the settlement submission by the association of professionals active in the installation and maintenance of elevators (“SESA”). 

Following the settlement procedure, the HCC imposed a reduced fine amounting to € 5.703,69 (five thousand seven hundred and three euros and 69 cents).

The HCC has also imposed a number of corrective/ behavioural remedies on the association in order to educate both its members and the general public as well as boost competition in this sector.

Settlement Procedure

The Settlement Procedure is applicable to cases where undertakings or associations of undertakings voluntarily and unreservedly admit their participation in a cartel, in violation of Article 1 Law 3959/2011 and/or Article 101 TFEU, and facilitate thereby, the establishment of the infringement. In these cases a reduction of the fine by 15% is granted.

The purpose of the Settlement Procedure is the simplification and acceleration of the HCC decision-making process, as well as the reduction of the number of appeals against its decisions. This enables the HCC to deal with a larger number of cases with less administrative burden, thus increasing the deterrent effect of its action and, at the same time, increasing citizens' awareness.

Facts

The ex officio investigation by the HCC’s Directorate General for Competition focused on the behaviour by two associations of undertakings active in the installation and maintenance of elevators, SESA and SYSEVE. This decision (750/2021) concerns only SESA’s practices, since this association filed a settlement submission, while a decision under the ordinary procedure is pending for the other association. 

The investigation focused, in particular, on the following practices by the association: 

  • interventions on the pricing policy of SESA members, and
  • interventions on the advertising activity of SESA members.

Relevant Market

The relevant market is the market for the maintenance and installation of elevators in the ATTICA region, since all members of SESA are active only in this area. 

Assessment

Decision by an association of undertakings (following the Minutes of the Disciplinary Committee)

SESA is an association of undertakings, since its members, the interests of whom SESA promotes according to its Articles of Association, are professionals active in the installation and maintenance of elevators. Therefore, Article 1 Law 3959/2011 is applicable.

SESA, like any professional organisation in the form of an association, expresses the collective will of its members through its various responsible bodies and committees, according to its Articles of Association; in this case the General Assembly, the Board of Directors and the Disciplinary Committee. The Minutes of the Meetings of the bodies of SESA, and especially the Minutes of the Disciplinary Committee during the years 2011-2014, “directly” reflect the practices of SESA, which concern the financial and competitive behavior of its members.

More specifically, according to the Minutes of the Meetings of the Disciplinary Committee, SESA directly restricts competition between its members in terms of prices and advertising.

Procedure before the Disciplinary Committee – Restriction of competition under Article 1 Law 3959/2011

During the discussion of complaints before the Disciplinary Committee, according to the Minutes of the period 2011-2014, professionals who are accused of offering a lower price than the existing one and / or distributing advertising brochures were given specific instructions and suggestions by the Members of the Disciplinary Committee. Professionals were requested to stop offering lower prices and/or advertising their offers and in some instances were threatened that, if they continued such behaviour, SESA would send letters to all their customers, even if it is a thousand (1,000) letters, or SESA will launch judicial proceedings, or will let its members know and as a consequence all SESA members will turn against them, or they will be expelled from the SESA. Generally, professionals offering lower prices have received other vague threats as part of this practice aimed at changing their respective behaviour.

Such actions by the Disciplinary Committee are known to the other bodies of SESA that appear to approve such practices. 

Based on the above, SESA has coordinated the behaviour of professionals active in the maintenance and installation of elevators in that the association prevented them from offering lower prices to their customers and distributing advertising brochures. SESA’s conduct constitutes a form of indirect price fixing and is caught by Article 1(1)(a) Law 3959/2011since, according to EU and national case law, the term “prices” in these provisions can be interpreted broadly and includes “recommended” prices as well as “target” prices. Price fixing, either direct or indirect, is a hard core restriction of competition.

Single and continuous infringement

SESA’s conduct forms a single and continuous infringement from 2011 to 2014. 

Fine/ Corrective-Behavioural remedies

Apart from imposing a fine amounting to 5.703,69€, the HCC imposed a range of corrective-behavioural remedies in order to educate professionals active in this sector as well as the general public and boost competition. 

According to the Decision, SESA should, within 20 days from receiving this decision:

- send an e-mail and letter by post  to all its members stating that the amount of maintenance offers is determined freely and independently by each professional and that the offering of lower prices and the distribution of advertising leaflets are in accordance with competition law. In these letters SESA should explicitly mention the HCC decision;

- make a similar statement in the next meeting of the General Assembly and post a similar statement on its website; 

- publish a similar statement in two newspapers. 

Decision 750/2021 also imposes on the association the keeping of minutes for every meeting of its respective bodies and committees. 

Finally, it asks SESA to organise training seminars for its members in cooperation with the HCC. 

The imposed behavioral remedies enhance professionals' compliance with competition law and emphasize the educational role of the sanctions/remedies imposed by the HCC - in addition to their deterrent role. 

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