On 28 March 2024, the Belgian Federal Chamber of Representatives adopted a new act implementing Regulation (EU) 2022/1925 of the European Parliament and of the Council of 14 September 2022 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (“Digital Markets Act”), as well as amending various provisions related to the organisation and powers of the Belgian Competition Authority (the “Act”). The Act primarily grants more powers to the Belgian Competition Authority (the “BCA”) to improve its efficiency and allow it to adequately support the European Commission (“EC”) when the latter applies and enforces the DMA. The Act will enter into force ten days after its publication in the Belgian Official Gazette.
Introduction
The Act pursues four different objectives.[1] First, it aims to implement the Digitial Markets Act (the “DMA”) into Belgian law. Although the DMA is in principle directly applicable in all EU Member States, certain provisions must be implemented in national law to ensure legal certainty. Second, the Act aims to improve the efficiency of the BCA’s procedures, for example by providing a duty to cooperate for individuals requesting immunity, clarifying the starting point of the one-month period to reply to the draft decision submitted by the BCA’s prosecution service and giving the parties the right to copy, from the BCA’s file, preexisting documents on which a leniency request is based. Third, the Act adds a fifth member to the BCA’s Management Committee, namely the Planning and Budget Director, who will, however, not have any decision-making powers on the application of competition law. Finally, the Act excludes mergers between approved hospitals within the meaning of the coordinated law of 10 July 2008 on hospitals and other care institutions from prior merger control by the BCA, except for mergers between approved hospitals that meet specific notification thresholds.
To achieve these ends, the draft Act amends Books I and IV of the Code of Economic Law (“CEL”) as well as other relevant legislation. The present contribution focuses on the Act’s provisions related to the DMA’s implementation into Belgian law. (more…)
German case law has so far been skeptical of the pursuit of large portfolios of antitrust damages claims under the so-called assignment model. This development now seems to have been stopped and Germany is once again becoming a more attractive forum for antitrust litigation.
Previous development
Many German plaintiffs assert their claims for damages against cartel members under the so-called assignment model (Abtretungsmodell). In this model, a group of consumers or companies assign their claims to a third party (debt collection service provider). This third party then asserts the claims in or out of court on a bundled basis and usually receives a contingency fee. For a long time, the admissibility of this type of collective redress was disputed in Germany, and courts denied the right of debt collection service providers to sue because of alleged violations of the German Legal Services Act (Gesetz über außergerichtliche Rechtsdienstleistungen, RDG). The Federal Court of Justice ruled in favour of the assignment model in two landmark decisions in 2021 (II ZR 84/20) and 2022 (VIa ZR 418/21) but lower instance courts were reluctant to receive these judgments. The main reason given was that the complexity of antitrust law would require special expertise which debt collection service providers typically do not have. The courts referred to corresponding provisions in the RDG, which requires legal service providers to have sufficient expertise in certain core areas of law. However, this development now seems to have been stopped. Both the Higher Regional Court of Munich (OLG München) and the Higher Regional Court of Stuttgart (OLG Stuttgart) follow the view expressed by the Federal Court of Justice and affirmed the legality of the assignment model.
Truck Cartel (Higher Regional Court of Munich)
The earlier judgment of the Regional Court of Munich, which declared the assignment model to be invalid, has been set aside by the Higher Regional Court of Munich (judgment of 28 March 2024 – 29 U 1319/20). Contrary to the Regional Court’s view, the assignment model is considered to be permissible. It is expressly recognized by the Higher Regional Court that a debt collection service provider may very well enforce claims in any area of law, including antitrust law. The action relates to the truck cartel. The European Commission imposed fines totaling almost four billion euros on truck manufacturers DAF, Daimler, Iveco, Scania and Volvo/Renault for price-fixing between 1997 and 2011. MAN was granted immunity from fines for voluntarily disclosing the cartel. In the action, claims for approx. 70,000 trucks are bundled totaling EUR 560 million in damages plus interest. In the first instance, the action had failed because the Regional Court of Munich denied t that the claims has been validly assigned to the debt collection service provider. The court cited alleged violations of the Legal Services Act in its reasoning. On appeal, however, the Higher Regional Court of Munich came to a different conclusion. The Higher Regional Court held that the plaintiff’s actions are permissible under the Legal Services Act and that the claims were validly assigned to the debt collection service provider. The Higher Regional Court rules that the claims are founded and referred the case back to the Regional Court of Munich for quantification of the damages. The defendant has filed an appeal on points of law against the judgment which is now pending in front of the German Federal Court of Justice.
Log cartel (Higher Regional Court of Stuttgart)
In addition, and most recently, the 2nd Civil Senate of the Higher Regional Court of Stuttgart (OLG Stuttgart) also ruled in favour of a claim for damages from the assigned rights of 36 sawmills (judgement of 15 August 2024 – 2 U 30/22). The case concerns 36 sawmills that assigned their cartel damages claims to a legal service provider. The sawmills see themselves as victims of the so-called “log cartel”, which allegedly fixed log prices for itself and other forest owners between 2005 and 2019. Specifically, the lawsuit seeks compensation for damages incurred by the sawmills as a result of purchasing logs at prices allegedly inflated by the cartel. Contrary to the Regional Court of Stuttgart, the Higher Regional Court of Stuttgart denied that the assignment model per se violated the Legal Services Act in the field of antitrust law. The assignment model and the assertion of claims do not constitute an inadmissible debt collection service. This is therefore possible in principle, and the assignments are therefore effective, provided that the assignment is sufficiently proven.
Conclusion
‘Due to the fundamental importance’ of the case, both the Higher Regional Courts of Stuttgart allowed an appeal on points of law to the Federal Court of Justice. However, it is expected that the Federal Court of Justice will adhere to its previous case law and confirm the validity of the assignment model also in antitrust cases, thus paving the way for companies and consumers harmed by cartels to assert antitrust damages claims more broadly and possibly more quickly in Germany. In addition, the German Verbandsklagegesetz, which is based on the Representative Actions Directive (EU) 2020/1828, may also cover antitrust damages claims, as it is also intended to allow small companies to bring collective actions for damages.
On 14 May 2024 the Competition Council of the Republic of Lithuania fined Capital Realty (acting as a franchisor) and 20 of its franchised real estate agencies with a total fine of EUR 710,751 for price fixing agreement. Capital Realty and other members of “Capital” franchise network were found to have colluded to enforce a minimum commission fee of 3 percent for brokerage services, thus restricting mutual competition. This is the first case in Lithuania’s competition law practice where a franchise network was fined for anticompetitive actions.
The Competition Council’s investigation revealed that from February 2015, Capital Realty and an initial group of 10 agencies agreed to charge a minimum 3 percent commission fee for brokerage services to their clients. By 2017, an additional 10 agencies joined this agreement.
According to the Competition Council, regular meetings between February 2015 and December 2020, email communication between the managers of agencies, as well as general meetings of “Capital” franchise network members confirmed that these agencies collectively decided to maintain this minimum commission level, preventing any competitive price reductions. The investigation revealed that various additional measures helping to uphold the agreement were implemented (i.e. evidence collected by the Competition Council shows that managers agreed to introduce price monitoring and shared pricing data; internal audits and trainings were organized during which the “standard” pricing level within the “Capital” network was communicated).
Capital Realty and other agencies disagree with the agreement and claims that the commission fee discussed between the members was a price recommendation provided by Capital Realty. According to Capital Realty, by providing its agencies with price recommendations and other guidelines it sought to preserve the integrity of the “Capital” network and the quality of services. However, the Competition Council dismissed Capital Realty’s arguments entirely.
The decision is not final yet as it is open for appeal at the Regional Administrative Court within a month of its delivery. It is expected that Capital Realty and other members of “Capital” franchise network will challenge the decision in court. Nevertheless, the Competition Council’s ruling sends a clear message to businesses that franchisees are competitors and must be allowed to compete freely even within the franchise network.
Since 1 July 2023, the Belgian rules on the screening of foreign direct investments (“FDI”) have been in force. As the decisions of the Interfederal Screening Commission (“ISC”) are not published, the rules’ application and interpretation still raise a lot of legal uncertainty. On 4 April 2024, the ISC published guidelines to provide further clarification.
Since 1 July 2023 a mandatory notification procedure has been in place in Belgium for transactions involving a non-EU investor investing in a Belgian target active in certain specific sensitive sectors. This notification procedure is in addition to other, already existing, requirements like mandatory merger notification to and approval by the competition authorities. In particular, transactions by a foreign investor acquiring either control over or 10% or 25% of the voting rights in a Belgian target – depending on the target’s activities – must be notified to and approved by the ISC before they can be implemented. This screening system applies to foreign investments in Belgian targets active in a number of exhaustively-listed sensitive sectors, like defence (including dual-use goods), healthcare, energy, telecoms, transport, critical technology and raw materials, critical infrastructure (whether physical or virtual), food security, private security, media, cybersecurity, access to sensitive information and personal data, and biotechnology. More information on the introduction of the Belgian FDI rules is available in our dedicated blog post
On 30 June 2023 – right before the entry into force of the Belgian FDI system – the ISC published some guidelines on the rules’ application and interpretation, but it was explicitly indicated that this guidance merely concerned a proposal of guidelines.
On 4 April 2024, the ISC has now shed some more light onto this new and non-public screening process by publishing finalised (as they are no longer called a “proposal”) and expanded guidelines.
While the system still raises a lot of questions, the new guidelines at least provide some very welcome clarity on at least some elements. The following are some examples of such clarifications.
According to the new guidelines, prior notification and approval is also required:
For an asset deal, if it leads to a change of control;
For the sale of a company division;
For internal restructurings, even if the Belgian target ultimately remains owned or controlled by the same non-European company;
If the number of voting shares that eventually exceeds the thresholds is acquired spread over multiple occasions;
If the foreign investor’s voting rights before the entry into force of the Belgian FDI rules (i.e. 1 July 2023) did not exceed the threshold, but his/her share of voting rights exceeds the threshold due to an investment after that date;
For an investment through which the foreign investor’s existing control increases;
For an investment through which the foreign investor’s veto rights increase.
According to the new guidelines, no prior notification and approval is required:
For greenfield investments (as only investments into existing Belgian targets are notifiable);
For public tenders (except if a notifiable investment occurs in the context of such a public tender);
For the reduction in the number of joint controlling shareholders (unless, as a result, the voting share thresholds are exceeded or if this leads to a change of control);
If the foreign investor’s voting rights before the entry into force of the Belgian FDI rules (i.e. 1 July 2023) already exceeded the threshold (which, however, was irrelevant at that time), and then his/her share of voting rights further increases due to an investment after that date. While the draft guidelines indicated that a notification was required in this situation, the new guidelines now indicate that no notification is required, except if the foreign investor acquires control over the Belgian target due to the new investment;
For an investment through which the foreign investor’s existing control decreases;
For an investment through which the foreign investor’s veto rights decrease;
For an investment in a Belgian target that is not itself active in one of the sensitive sectors, even if a non-Belgian entity belonging to the same group is active in a relevant sector;
For corrections of material errors or purely formal amendments to investment agreements signed before 1 July 2023 (though substantial changes could be notifiable).
According to the new guidelines, the following elements are irrelevant to determine whether or not prior notification and approval is required:
The size of the investment;
The Belgian target’s turnover (with two specific exceptions);
The Belgian target’s market share, whether in Belgium or abroad;
The Belgian target’s number of employees;
Whether or not the transaction is notifiable in other jurisdictions;
The identity and the activities of the Belgian target’s clients (although this information can be relevant for the transaction’s substantive assessment);
The fact that the Belgian target has a Belgian public authority as its client (although that could mean that the target has access to sensitive information, which could justify a requirement to notify).
The guidelines give a reminder that it is up to the foreign investor to determine whether or not a filing is required – there is no possibility in that regard to ask for some preliminary decision or ruling on the notification requirement. No further clarification is given on the interpretation of the sensitive activities and sectors – the guidelines are limited to a general note that the activities and sectors have to be interpreted on the basis of the purpose of the screening mechanism, i.e. to safeguard national security, public order and strategic interests.
In general, the guidelines encourage always notifying an investment in case it is uncertain whether it falls within the scope of application. While the notification process of course has timing consequences for the deal, at least notification before the ISC is free of charge, while administrative fines (up to 10% of the investment’s value) may be imposed for lack of or an incomplete notification.
In that regard, the guidelines also advise including in the transactional documents a solution to potential problems linked to the target’s unwillingness to provide certain information or the target’s provision of incorrect information – as even in such a situation the foreign investor is the one responsible for the notification and thus can be fined.
Moreover, the guidelines confirm that the ISC can – in the context of a negative decision following an ex officio investigation when no prior notification was made – order a divestment. It is thus key in any transaction involving a foreign investor to carefully study the notification requirement and, if required, to diligently prepare the filing documents.
Antitrust issues in vertical relationships are no longer below the competition authorities’ ‘radar’. This trend of not only focusing on horizontal but also on vertical competition law infringements has once more been seen with the Belgian Competition Authority’s decision to fine Le Creuset EUR 490,112 for having implemented a resale price maintenance policy with its distributors over a six and half year period.
RPM as an infringement by object
Le Creuset Benelux (“Le Creuset”) is a company specialising in premium kitchen and wine accessories in Belgium and Luxembourg, selling directly to customers via its own physical and online shops, and also through a network of distributors.
The Belgian Competition Authority’s (“BCA”) investigation, which started in March 2017, found that between 2009 and 2016, when providing the new wholesale prices to its distributors each year, Le Creuset also communicated to its distributors recommended resale prices and recommended promotional resale prices. While those resale prices were designated as “recommended”, the BCA found evidence that in reality Le Creuset expected its distributors to strictly apply those prices and to apply the promotional prices within a fixed period. When Le Creuset introduced a selective distribution system in 2013, one of the mandatory criteria was specifically to respect Le Creuset’s pricing policy. Moreover, Le Creuset monitored the resale prices applied by its distributors and adopted ‘pressure’ tactics and penalties for non-compliance. For example, through e-mails, calls and visits, Le Creuset regularly reminded its distributors of the importance of respecting Le Creuset’s pricing policy. Le Creuset monitored its distributors’ prices by: checking their internet sites, visiting their physical shops, mystery shopping, and discussing retailers’ prices with competing retailers. Le Creuset also informed retailers of the fact that other retailers were already applying compliant prices and promotions. If there was non-compliance, then Le Creuset suspended orders, blocked deliveries, refused promotions, ended or did not renew the selective distribution contract, or suspended a retailer’s premium distributor status.
The Belgian Competition College found that Le Creuset’s pricing policy in fact amounted to the imposition of minimum resale prices. This vertical restriction of the freedom of Le Creuset’s distributors to independently set their own resale prices (also called “resale price maintenance”) constitutes a restriction of competition by object, which is prohibited by Article 101 § 1 of the Treaty on the Functioning of the European Union (“TFEU”) and Article IV.1 §1 of the Belgian Code on Economic Law (“BCEL”). For this severe competition law infringement, the College imposed a fine on Le Creuset of EUR 490.112.
Some takeaway points
The EUR 490.112 fine was set taking into account the statutory maximum fine of 10% of the infringer’s annual group turnover. In this case, that maximum was still calculated on Le Creuset’s annual Belgian turnover (as was provided in the law at the time of Le Creuset’s infringement). However, companies should be aware that the Belgian Code on Economic law was amended on this point in 2019. Consequently, the BCA can penalise restrictive practices committed since then with fines up to 10% of a company’s annual worldwide group turnover – even if those practices were, for example, limited to Belgium. The significant increase of the maximum amount of the fine was introduced to strengthen its deterrent effect.
One aspect to note is that the College stressed the distributors’ participation in the resale price maintenance scheme. The decision explains that through their behaviour, the distributors contributed to, and at the very least acquiesced in, Le Creuset’s policy of minimum resale prices. In fact, they applied prices in line with this policy, monitored the prices charged by their competitors, and when they found that prices were not in line with Le Creuset’s policy, they complained to Le Creuset and asked Le Creuset to intervene. At Le Creuset’s request, the distributors agreed to modify their prices and provided information on their current and/or future prices. Finally, the distributors agreed to Le Creuset’s intervention in the organisation of promotions. It was important for the College to find an agreement on the resale price maintenance scheme between Le Creuset and its distributors. Mere unilateral behaviour by Le Creuset could only have been penalised under Article 102 TFEU or Article IV.2 BCEL (the prohibition on abuse of dominance) but only to the extent that the College could prove Le Creuset was dominant. By stressing the distributors’ participation, the College could qualify Le Creuset’s pricing policy as a vertical restrictive agreement falling under the prohibition of Article 101 TFEU and Article IV.1 BCEL. Despite the distributors’ active role in the scheme, the College however did not go that far to impose a fine also on the distributors for their cooperation.
Finally, it is interesting to note that this is not the first time that the BCA has imposed a fine for resale price maintenance. In January 2023, Caudalie, the cosmetics company, was fined for imposing sales restrictions and applying a resale price maintenance scheme (see here, here and here for our blog posts on the Caudalie case). The fine imposed on Le Creuset should serve as a reminder and a warning to companies that the competition authorities, including the BCA, are no longer disregarding vertical practices.
Recent developments in Estonia regarding competition policy and enforcement
This article provides a brief overview of recent key developments in Estonia regarding competition policy and enforcement. Namely, the status of the transposition of the ECN+ Directive into Estonian law, the Estonian Competition Authorities’ (“CA”) analysis of the 2020 pharmacy reform, investigation of a potential grain cartel and CA’s analysis of the food market.
Transposition of ECN+ Directive[1] into Estonian law
Although Member States had to transpose the ECN+ Directive in national law by 4 February 2021, Estonia has yet to do so. After several delays and contrasting views, the Estonian government finally initiated the amendment of the Estonian Competition Act and related laws to transpose the ECN+ Directive into Estonian law (“Draft Law”) at the Estonian Parliament (Riigikogu) this February, i.e., February 2024. According to the Draft Law, the amendments are set to take effect on 1 June 2024, however, the Draft Law is still pending at Riigikogu.
The current legal framework in Estonia provides that anti-competitive agreements are classified as crimes (punishable by pecuniary punishment and imprisonment), and abuses of dominance and other competition offenses, such as failure to obtain a merger clearance, are treated as misdemeanours (punishable by a fine). In addition, CA may issue precepts (in Estonia: ettekirjutus) ordering an undertaking to carry out a certain act or to cease violations of the law. If the undertaking fails to comply with the precept, CA may issue penalty payments (in Estonian: sunniraha).
The Draft Law introduces a new competition field-specific administrative procedure (in Estonian: konkurentsijärelevalvementlus) to be carried out by CA which will replace the current system in Estonia (including the criminal proceedings applicable to anti-competitive agreements). CA will oversee competition law compliance, but as a result of the recent political compromise, fines for any competition law violations will be determined and imposed by the administrative court, rather than by CA itself. For a competition violation, undertakings may be fined up to 10% of their overall global turnover generated in the preceding financial year. Whereas, procedural measures typically associated with criminal investigations, such as surveillance and detention, cannot be applied in the new special administrative procedure.
The Draft Law proposes considerable changes to the current competition law enforcement system and remains a topic of intense debate among practitioners, enforcers, and other interest groups. As of the date of this article, the Estonian Chancellor of Justice and the Estonian Supreme Court, among others, have submitted additional opinions to Riigikogu expressing their concerns about the Draft Law. These concerns include constitutionality of certain provisions in the Draft Law and the lack of proper procedural regulation for the proposed new special administrative procedure. Therefore, it remains uncertain when and in what form the Draft Law will be passed by Riigikogu.
2020 Pharmacy Reform
In January 2024, CA published its ex post analysis[2] of the outcomes of the Estonian pharmacy reform (ownership restrictions) that entered into force on 1 April 2020. CA analysed the ways the reform had affected the pharmaceutical sales market with focus on the competition situation and independence of pharmacies. For this, CA surveyed a sample of 42 general pharmacies. In short, CA found that the pharmacy reform had not achieved its goals.
The aim of the Estonian pharmacy reform was to separate the retail and wholesale trade of medicines (in Estonian: ravimid)[3] by setting forth that only pharmacies where the majority is owned by pharmacists have the right to operate. In addition, wholesalers were not allowed to have a stake in or dominant influence over a pharmacy after 1 April 2020.
The analysis showed, however, that the pharmacies continue to be linked to the wholesale traders that previously owned them, e.g. via supply, franchise, sub-lease, or other arrangements. It was concluded that the desired effect of having independently operating pharmacies has not realized. Even after the reform, pharmacies continue to operate within established conditions, relying on various legal and economic factors, particularly on wholesalers and franchise owners.
In the analysis, CA made the following conclusions and recommendations:
New regulation for medicine prices: the existing model for regulating medicine prices is ineffective. Although medicine prices are negotiated between the medicine manufacturer and the government, and wholesale and retail markups are regulated, CA’s spot analysis of manufacturers and wholesalers in 2020 revealed that manufacturers provide wholesalers significant discounts from the nationally agreed-upon prices. To ensure that these manufacturer discounts reach the retail level and ultimately benefit consumers, a better regulation needs to be developed and additional measures should be implemented to enhance price competition among wholesalers.
Additional measures to ensure pharmacies’ independence: the current ‘dominant influence’ system is not working as it was supposed to as the pharmacies are still heavily reliant on the wholesalers through various contractual and other measures (such as leasing business premises from franchise owners, loan obligations, IT-systems). Therefore, the law should establish more precise and separate rules with particular attention to the contractual relationships that have evolved within the pharmacy sector after the reform. For example, addressing situations where the rights of use of the pharmacy’s business premises remain under the control of the franchise owner. CA also advises to implement a rule which prevents an individual from simultaneously being a member of the governing body of the legal entity that owns the pharmacy and being part of the group of owners or governing bodies of (or being otherwise closely linked with) the franchise owner, pharmaceutical manufacturer, wholesale distributor, or healthcare service provider.
Additional requirements for pharmacy ordering systems: pharmacies use ordering systems to manage medicine supply. However, these systems seem to create a situation where ordering medicines from a single wholesaler is favoured, which gives such wholesaler an advantage over other potential wholesale channels. A possible solution would be to create an ordering system where all licensed wholesalers can interact on equal terms. Pharmacists should have an easy way to automatically compare offers from different wholesalers within the system.
Additional competition law enforcement measures to CA: at present, CA has the authority to issue recommendations based on the market analysis that was carried out by the authority but CA does not have the authority to impose binding structural and behavioural requirements. Given the current debate in other EU Member States regarding whether competition authorities should have the legal power to intervene even when no violation has been identified, granting such additional measures to CA should also be considered in Estonia. Such interventions by the CA would not be aimed at sanctioning undertakings but rather at reducing the behaviour or market power in order to enhance overall economic welfare and protect consumers.
CA’s analysis of food market
In the fall of 2023, CA carried out a brief market analysis of the food prices in Estonia[4]. The aim of the analysis was to identify whether there are any competition failures or significant unexplained changes in the food market, specifically whether there was any ‘greedflation’. CA sought to (i) better understand how the prices of food products sold in Estonia have changed in the past three years; (ii) determine the factors behind the price changes; (iii) asses whether the price fluctuations align with trends in the world market and regions close to Estonia; and (iv) determine whether Estonian agricultural producers, food manufacturers and retail stores have unjustifiably profited at the expense of consumers.
For this, CA analysed the changes in food prices and economic indicators of sector companies during the period of 2019 – 2023 with emphasis on agricultural producers, food industry and retail stores (vertical sector). In the analysis, CA used the publicly available information published by Statistics Estonia, Estonian Institute of Economic Research, Eurostat, and public financial reports from registered companies.
As a conclusion of the analysis, CA found that the food prices in Estonia have been influenced by international policies and market failures, and Estonian agricultural producers, food industry and retail stores have not excessively raised prices or earned unjustifiably large profits. Instead, factors such as the increase of global fuel and energy prices, the Ukrainian war, armed conflicts in Africa, climate change and associated extreme weather conditions have impacted the food prices.
Although, CA did not find that the Estonian agricultural producers, food manufacturers and retail stores had earned unjustifiably large profits from high price increases, CA stressed that it will continue to monitor the developments in the food market. CA stated that it will take measures to enhance its efforts against unfair trading practices to ensure that producers’ goods reach consumers on fair conditions and there exists fair competition between producers’ and retailers’ private level products.
Grain Cartel
The Prosecutor’s Office recently terminated criminal proceedings initiated in 2018 against several undertakings who were suspected of participating in a grain cartel. The proceedings were terminated under the opportunity principle (in Estonian: oportuniteedi põhimõte)[5] with the companies and individuals being required to pay a total of more than 300,000 euros as a pecuniary obligation. Criminal proceedings are still ongoing in respect to one individual. This case stands out as one of the largest cartel investigations of CA.
The investigation focused on six companies suspected of entering into anti-competitive agreements within the grain dryer market in relation to 2018 – 2019 subsidies from the Estonian Agricultural Registers and Information Board (PRIA). Undertakings had the opportunity to apply for investment support from PRIA, including funding for the purchase of grain dryers. As part of the application process, undertakings were required to submit at least three comparable price quotations to PRIA.
CA discovered that the price quotations submitted by these six companies were prepared within a short time frame of each other and looked visually very similar. This raised suspicions that the price quotations had been previously coordinated among the grain dryer sellers, indicating that they were not genuinely competitive.
Before the commencement of the next round of PRIA subsidy applications, CA, in collaboration with the police, carried out an extensive surveillance operation and searches at 12 locations – making it the largest competition-related search in Estonia to date. Based on the evidence gathered, the undertakings were filed with the suspicion of dividing the market for the sale of grain dryers and coordination of price quotations.
Since the undertakings under investigation constitute the majority of grain dryer sellers in Estonia, the alleged anti-competitive conduct had a significant impact on the market.
More information can be found from CA’s webpage here and CA’s 2022 annual report here.
Kaisa Üksik, Head of Competition Practice Group (Estonia) – Walles
[5] The decision not to prosecute based on the opportunity principle means that in the assessment of the prosecutor and the court the violations have taken place, but for various reasons, criminal punishment is not absolutely necessary.§ 202 of the Estonian Code of Criminal Procedure, English text available from here: https://www.riigiteataja.ee/en/eli/527122023006/consolide
