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 a prohibited vertical agreement between Kraš and NTL
The Croatian Competition Agency established in the course of the proceeding that the agreement between the undertakings Kraš and Narodni trgovački lanac (NTL), that was in force for almost four years, from October 2014 to July 2014, contained restrictive provisions involving resale price maintenance. The sanctions imposed by the CCA amount to more than 2, 5 million Kuna.
Namely, under the sales agreement Kraš and NTL agreed upon minimum resale price maintenance in accordance to which the distribution chain NTL was not allowed to sell Kraš’ products below the agreed price. Otherwise Kraš was entitled to refuse the supply and NTL could have lost his extra bonuses.
Agreeing on a minimum resale price (resale price maintenance) constitutes a hardcore restriction of competition prohibited under competition rules with no exception, even where such a restrictive provision is not applied in practice. Concretely, the supplier imposes a restriction on the seller to freely set the prices which directly affects the interests of the final consumer.
In this particular case the CCA did not find evidence that the prohibited provisions had been applied in practice. However, given the fact that they had been repeatedly incorporated in three subsequent contracts and that they had been in force for almost four years, Kraš was in the position to impose them at any time and stop the supply to NTL and deprive him of his extra bonuses.
Taking the above said into account and in line with the market position of the undertakings, their financial power as well as the mitigating circumstances in this concrete case, pursuant to the set criteria the CCA imposed a fine on Kraš in the amount of 1.560,600 Kuna and on NTL in the amount of 1.022,000 Kuna.
It is the opinion of the CCA that the fines imposed are adequate for the said infringements, at the same time producing a preventive effect on the participating undertakings but also a deterrent effect which should keep other undertakings from any further infringements of competition law. Competition rules are mandatory rules and undertakings must be aware that it is their responsibility to comply with them. No agreement between them can change this fact, says CCA in its decision.