High Administrative Court dismisses the claim filed by the Croatian National Bank against the CCA decision

The High Administrative Court of the Republic of Croatia dismissed the claim filed by the Croatian National Bank (HNB) against the decision of the Croatian Competition Agency (CCA) on the basis of which it terminated the infringement proceeding carried out against Zagrebačka banka given the lack of legal grounds. In its ruling the Administrative Court stated that the HNB lacks active legitimation to sue in this administrative case.

The case concerned was referred by HNB to the CCA on the date of Croatian accession to the EU based on the Act on the Amendments to the Competition Act that provides for transfer of jurisdiction from the HNB to the CCA. In other words, all then ongoing cases carried out by the HNB within the meaning of competition rules in the banking and financial services sector provided by credit institutions were at that point assumed by the CCA.

This particular case was referred to the CCA in its final phase, when the HNB had already communicated to the party concerned the Statement of Objections. The case had been classified as alleged abuse of a dominant position within the meaning of Competition Act. At the time of referral the HNB had indices of abuse of a dominant position by Zagrebačka banka (ZABA) with respect to the charges that it imposed for sending a late payment notice of the overdue loan payment on its clients – debtors, co-debtors and guarantors.

The CCA found based on the submitted documents and the established facts of the case that in the sense of competition rules a late payment letter considering its legal nature cannot be regarded as a product or service, and consequently, no relevant market can be defined as a “late payment letter market” or “late payment letter charges market”. Thus, the CCA found that ZABA cannot hold a dominant position where there is no such market, and that neither its behaviour can constitute abuse of dominance in the sense of competition rules.

In the exposition of the decision on the termination of this particular proceeding the CCA stated that “… the HNB as a specific regulator and supervisor of the banking system has consumer protection falling within its remit, in this particular case involving the users of banking and financial services, and as such could have taken a wider approach in this particular matter and taken steps within its powers  regarding the implementation of a number of neighbouring laws, including the consumer protection law, whereas, the CCA has the authority under the law to apply exclusively competition law – the Croatian Competition Act and the Regulation on the definition of relevant market.

Therefore, it is crucial in this particular case whether the users of loans had given their consent to ZABA at the point of the signing of the contract to charge them a fixed or some definable amount for sending them a late payment letter, or were the provisions of the contract unilaterally changed by ZABA. On the other hand, if there had been consent given by the loan users, the question is whether the users had been adequately informed that ZABA could charge them for sending them a late payment letter should such a case arise.

The viewpoint of the CCA is that the above described practices of ZABA could be challenged exclusively from the civil obligations and consumer protection law aspect, and not from competition law aspect. Thus, it terminated the proceeding.

In accordance with the ruling of the High Administrative Court the plaintiff (HNB) lacked standing to bring a suit given that the contested CCA decision did not harm its subjective rights or legal interests and neither these rights nor interests were decided upon. Decided upon were the subjective rights and legal interests of the interested person – a party to the proceeding in this administrative case. Given that HNB was not considered a party in the administrative proceeding that preceded the adoption of the challenged individual decision at issue, and taking into account that there was no legal grounds that would give him the status of a party after it ceased to be responsible for deciding in this concrete matter on 1 July 20013 and referred the case to the CCA which on that date assumed all the powers in competition matters.

“Therefore, the plaintiff was not authorised to bring a suit in the administrative case within the meaning of Article 17 of the Administrative Dispute Resolution Act”, found the High Administrative Court.