Until the Competition Act entered into force in October 2010, the Competition Agency was not empowered to impose fines directly where it established violations of competition law. However, although the Regulation on the Criteria for Setting Fines came into force at the end of November 2010, the agency is only now poised to impose its first fine with regard to the failure to notify a concentration.
Of all the agency's decisions, those issued in proceedings assessing concentrations in the grocery retail market are among the most prominent; therefore, it is no surprise that the first fine will be imposed in this dynamic market.
The agency previously approved a concentration on the market according to which Tommy acquired part of Kerum's retail outlets in 2010 and 2012. At the time, the agency concluded that implementation of the concentration would have no negative effect on competition. Moreover, it concluded that Tommy's market share would contribute to stronger competition among undertakings on the relevant market, which would ultimately benefit consumers.
However, despite havingfound the concentration compatible, the agency is now to initiate proceedings to impose fines in respect of the failure to submit prior notification of the concentration for assessment within the prescribed time limit. Pursuant to Article 62 of the Competition Act, for this offence the agency can impose a fine of up to 1% of the undertaking's total turnover in the past year. The obligation to submit prior notification for Tommy arose on May 10 2012, when Tommy leased the last of Kerum's six retail outlets in Dubrovnik-Neretva County. However, the agency did not receive complete notification until November 16 2012.
The proceeding and its outcome are expected to shed some much-needed light on the interpretation of prescribed standards for imposing fines, as well as the agency's methods of detecting failures by undertakings on the market.
For further information on this topic please contact Gabriele Wahl Cesarec at Petres & Cvirn by telephone (+385 1 4813 244), fax (+385 1 4813 073) or email ([email protected]).
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
