Communication
The aim of the protection of market competition is primarily to create benefits for consumers and equal conditions for all entrepreneurs on the market, who, acting in accordance with the existing rules and competing on the market with the quality, price and innovation of their products and services, contribute to the overall development of the economy.
CCA finds six undertakings in the PBX market engaged in cartel
The Croatian Competition Agency issued a decision on 18 December 2024 confirming that within the meaning of Article 8 of the Competition Act the following six undertakings participated in a prohibited agreement in the sale and maintenance of private branch exchange (PBX) systems (telecommunications systems used to manage and route incoming and outgoing telephone calls within an organisation) in Croatia:
- Ericsson Nikola Tesla d.d. (ENT) – based in Zagreb
- Retel d.o.o. – based in Zagreb
- Kodeks d.o.o. – based in Zagreb
- Vatel d.o.o. – based in Split
- LUMISS d.o.o. – based in Dubrovnik
- Mitel Austria GmbH – based in Austria.
The violation was confirmed to have taken place between 1 October 2010 and 14 July 2015.
The CCA imposed the fines totalling €1,170,968.24 on the involved undertakings, distributed as follows:
- Ericsson Nikola Tesla (ENT): €785,570.58
- Kodeks: €113,405.66
- Retel: €23,734.29
- Vatel: €39,135.04
- Lumiss: €29,834.54
- Mitel Austria: €179,288.13.
Background of the Investigation
The investigation was initiated based on Article 8 paragraph 1 items 1 and 3 of the Competition Act to examine a potential prohibited agreement in the PBX market, specifically within the Enterprise Program.
The Enterprise Program was originally a business telephone system of the Swedish company Telefonaktiebolaget LM Ericsson (and its connected undertakings) but was sold to Aastra Technologies Limited (Canada) in May 2008. In 2014, Aastra was taken over by Mitel Networks Corporation (Canada), the current manufacturer of the PBX equipment in question.
Nature of the Prohibited Agreement
The CCA found that Ericsson NT, Kodeks, Retel, Vatel, and Lumiss engaged in a market-sharing agreement by allocating specific customers to each participant. The companies agreed not to compete with each other in selling, installing, maintaining, and upgrading Ericsson/Aastra/Mitel PBX systems to avoid price competition.
Applications for Leniency
In line with Article 17 of the Regulation on immunity from fines and reduction of fines, during the proceedings, two undertakings applied for leniency measures:
- Steiner – applied for full immunity from fines, whereas
- Kodeks – applied for a reduction of fines.
Both undertakings admitted the existence of the cartel and their participation in the agreement, but Kodeks claimed that Ericsson NT initiated and enforced the agreement, indirectly pressuring Kodeks, who was not either the initiator or the ringleader, into compliance to avoid exclusion from the market.
Additionally, Steiner and Kodeks revealed that the undertaking Aastra, who was taken over by the Canadian Mitel in 2014, played an active role in the prohibited agreement through its daughter company Mitel Austria.
Legal Basis and Violation Classification
According to Article 8 of the Competition Act all agreements between two or more independent undertakings, which have as their object or effect the distortion of competition in the relevant market are prohibited.
This case involved a specific type of cartel (intra-brand cartel), where competitors colluded on the distribution of a single brand’s product – Ericsson/Aastra/Mitel PBX systems.
All participants in the prohibited agreement directly engaged in every relevant aspect of that agreement, or in anti-competitive behaviour constituting a unique and ongoing infringement and are therefore held fully responsible for the infringement.
Market-sharing agreements are considered severe infringements of competition law, as they by nature restrict competition by object and are strictly prohibited under Article 8 paragraph 1 of the Competition Act.
EU Competition Law Considerations
The CCA also investigated whether the agreement violated Article 101 of the Treaty on the Functioning of the European Union (TFEU). There were no legal grounds to proceed under the EU law, leading to termination of that part of the case.
The official decision will be published on the CCA website.
For more information on prohibited agreements and cartels, visit:
🔗 https://www.aztn.hr/karteli-zabranjeni-sporazumi/