CCA opens proceeding against Croatian Hunting Association and Hunting School and conducts surprise inspection

On 3 June 2022, following the initiative by a complainant who has requested that their identity remain confidential, the Croatian Competition Agency (CCA) opened ex-officio proceeding against the Croatian Hunting Association and Hunting School – Institute for education of hunting professionals with the view to identifying whether the recently reduced price of the hunting education course in the amount of HRK 500 means that the connected undertakings concerned have been engaged in predatory conduct constituting abuse of a dominant position in the provision of hunting education services in the territory of the Republic of Croatia.

In the course of the preliminary market investigation the CCA found that the previously valid price for the hunting education course was reduced by drastic 80 % which may constitute predatory pricing with the view to excluding competitors from the market.

Based on the issued warrant of the High Administrative Court of the Republic of Croatia and in line with its powers CCA carried out the unannounced inspection at the premisses of the undertakings concerned, reasonably suspecting that the evidence necessary for the infringement proceeding relating to distortion of competition in the form or a prohibited agreement or abuse of a dominant position is being kept on these premises or in possession of a certain person.

CCA notes that a dominant undertaking may engage in predatory conduct by deliberately incurring losses or foregoing profits in the short term as a strategy to exclude competitors, to prevent entry or to pre-empt the emergence of a market. Ultimately, the predator will be able to raise the price above the competitive level (recoupment capability) once it has forced the competitors to exit the market or deter entry and expansion by competitors, thereby increasing or maintaining its market power in the long run.

The fact that the CCA carried out the surprise inspection and opened an infringement proceeding does not mean that the companies are guilty of anti-competitive behaviour nor does it prejudge the outcome of the investigation itself. The CCA will take its decision on the merits based on the established facts of the case.