The government recently announced a phased plan to lift restrictions that were imposed in Croatia as a result of the COVID-19 pandemic. While many sectors prepare to resume operations, the Croatian Competition Authority has been fully operational since 11 May 2020.
Over the past few years, European and national institutions have warned about the negative effects of unfair trading practices in the supply chain. In order to tackle these and regulate the risk of abuse, several countries have enacted distinct trade laws. Croatia recently followed suit by adopting a new Act on the Prohibition of Unfair Trading Practices in the Business-to-Business Food Supply Chain. The act defines the concept of 'significant buyer power', as well as different types of illegal behaviour.
In July 2015 the Competition Agency received an initiative to initiate proceedings against Ytong porobeton (YP) for alleged abuse of its dominant position. YP rejected all of the assertions against it, arguing that the relevant market had been incorrectly determined. Based on expert opinions, the agency concluded that YP was not dominant on the relevant market and thus that it had not abused its dominant position.
In a recent case the Competition Agency for the first time accepted the proposed commitments in a case conducted under the qualification of a prohibited agreement, even though all the characteristics of a prohibited horizontal agreement limiting competition were present. By accepting the commitments, the agency abandoned its previous position in favour of a more lenient one.
In a recent ruling by the Croatian Competition Agency (CCA), a decision by the Croatian Insurance Bureau to revoke the power of an insurer to issue motor certificates was found not to constitute a prohibited agreement. Irrespective of this, the CCA noted that it is not the role of undertakings to control the operation of their competitors, and that the parties involved should have reported the insurer if they thought it had breached the law.
The Competition Agency is improving its track record in competition law enforcement. One recent decision concerned a cartel of marina operators which exchanged information on future pricing policies for berthing services. Although the parties agreed not to raise the prices of their services (or to raise them minimally), the information exchange was deemed sufficient for the agency to render a statement of objections.
The Competition Agency recently considered whether Gemicro abused its dominant position on the market by allegedly tailoring and concluding 'non-poaching' agreements with the leasing companies which were its buyers, thereby restricting competition and creating significant barriers to entry into the relevant market. This is the first time that the agency has examined this type of agreement as problematic.
In a recent case the Croatian Competition Agency stated that infrastructure that is essential for reaching customers and conducting business should be treated as an 'essential facility'. The agency determined that a bus station owned by Autotrans was not the essential facility for conducting road passenger transport by Slavonija Bus, as there were two further accessible stations with passenger boarding areas in the area.
The Competition Agency recently concluded another proceeding dealing with resale price maintenance, as prohibited under Article 8 of the Competition Act. Although the full decision has not yet been published, the agency's stance on resale price maintenance can be inferred from the announcement and earlier decisions in similar resale price maintenance cases in the food and retail sectors.
In recent years the Competition Agency has discovered several cartels operating within associations of undertakings, which were exploited as a framework to provide logistical support to the cartels and facilitate their illicit existence. In most cases the associations merely followed the plans of their main members. However, a recent decision confirms that associations themselves can also initiate price-fixing cartels.
The Competition Agency has experienced high levels of media attention, following two recently completed merger control proceedings. The agency's conditional clearance of HT's acquisition of control over Optima in pre-bankruptcy settlement proceedings is novel in terms of both the means of acquiring control and the scope of accepted remedies.
The Croatian Competition Agency recently reported that it had initiated abuse of dominance proceedings and issued interim measures against a water supply and sewerage operator. The agency is authorised to adopt interim measures in urgent cases, when there is a risk of irreparable damage to competition.
During 2013 the Competition Agency dealt with several interesting but demanding merger control filings. As legal practice mirrors business dynamics, it was unsurprising that at the end of 2013, several filings were withdrawn – the most significant being that between Agrokor and Adris Group, which had applied for merger control clearance regarding their newsstand chains.
In one of the last sessions convened before the expiry of three Competition Council members' mandates, the Competition Agency terminated proceedings against undertakings operating in the dairy products market on the grounds that there were no longer any legal grounds for further conduct. The decision follows the agency's procedural trend of terminating proceedings if it deems it unlikely that an infringement will be found.
Fans of football club Hajduk recently filed an initiative before the Competition Agency against two rival clubs for initiation of proceedings to establish a prohibited agreement, arguing that participation by these two obviously associated clubs in the same league reduced transparency. The agency rejected the initiative, explaining that the determined forms of cooperation between the two clubs did not violate the Competition Act.
The Financial Operations and Pre-bankruptcy Settlement Act introduced the pre-bankruptcy proceeding, which is intended to ensure the continuation of the undertaking's business and the restructuring of its debts. However, a question has arisen regarding the relationship between the potential acquisition of control over an undertaking and a pre-bankruptcy proceeding in accordance with the merger control rules.
Upon Croatia's accession to the European Union, the Competition Agency will directly apply the trade-related provisions of EU law in cases which affect trade between member states and Croatia. Presently, these provisions are applied indirectly, as an interpretative mechanism. Except in cases of a purely national nature, infringements of the Competition Act will fall under the jurisdiction of both the European Commission and the agency.
In recent months the Competition Agency has issued two interesting decisions relating to the telecommunications sector. While the first case is interesting with respect to substantive law, the second has significant procedural implications for future cartel cases. Both decisions will significantly influence the future implementation of competition rules in Croatia.
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. Although the relevant regulation has been in force for some time, the agency is only now poised to impose its first fine with regard to the failure to notify a concentration.
The Competition Agency has for the first time accepted commitments under the new legal framework for competition. The agency's decisions make the commitments legally binding on Primalab without reaching any conclusion as to whether any infringement of Croatian competition rules has taken place. If Primalab were to breach its commitments, the agency could impose a fine of up to 10% of Primalab's total turnover.