Croatian Association of Communications Agencies changes its Guidelines for successful pitching

In the infringement proceeding carried out against the Croatian Association of Communications Agencies – HURA, the CCA accepted the remedies proposed by this association of advertisers. Namely, HURA committed itself to revise all the provisions from the Guidelines for successful pitching that raised competition concerns within a 30-day deadline. The Guidelines were publically available on the web site of HURA and its application was binding for all its members.

The primary objective of the Guidelines was to ensure regularity of the pitching process, first of all by limiting the number of agencies in the pitch (3+1) and by setting the deadlines in the competitive selection. For example, the members of HURA were obliged to register any call for pitching in the so called “information exchange system” within 48 hours. If anyone would circumvent the rules from the Guidelines, the members of HURA were obliged to report this to all advertisers and other interested parties in the pitching process, which would concretely mean that a proceeding for violation of the Guidelines would be initiated by HURA. On the other hand, the Guidelines also included a provision regulating that the members were to leave any pitching process that was not in compliance with the recommended Guidelines of HURA. Sanctions were provided for the members for non-compliance with the said recommendations in the form of reprimand, public reprimand, ban from festivals and other events organized by HURA and revoking membership.

Based on sufficient indices the CCA opened an ex officio proceeding for the establishment of distortion of competition against HURA in July 2014 and assessed the compliance of certain provisions of the Guidelines with competition law, concretely, with the rules regulating prohibited agreements.

The CCA carried out a surprise inspection on HURA premises.

After the proceeding against HURA was opened, HURA voluntarily proposed the committments to eliminate the possible anticompetitive effects of its behaviour in the market. The CCA found the commitments involving the removal of the disputable provisions sufficient and adequate to restore competition in the market, and, as stated by the CCA, they would swiftly and effectively restore competition in the relevant market.

HURA committed itself to eliminate all the provisions that raised competition concerns from the Guidelines within a time period of 30 days. Concretely, this involves the provisions obliging the members to report about the pitching process, provisions on sanctions that could be imposed on members for non-compliance with the Guidelines and the obligation on the advertisers to retreat from the pitching process unless it was in compliance with the Guidelines.

At the same time the CCA points out that HURA is not empowered to reveal the information on pitching regardless of the fact whether it is obtained from the members or advertisers to its members. Vice versa, no member has the right to obtain such insight information.

Should HURA not comply with the commitments addressed to restore competition within the set time period the CCA will re-open the infringement proceeding in this particular case.