Czech NCA fines Austrian furniture retailer for breach of commitments tied to a concentration
The Czech Office for the Protection of Competition fined XLCEE-Holding GmbH, an Austrian furniture retailer, CZK 20,324,000 (approx. EUR 824,000) for not fulfilling its commitments tied to a concentration between undertakings. The decision is not definitive as it has been challenged through an appeal.
In mid-2023, XLCEE-Holding GmbH faced a decision from the Office for the Protection of Competition that imposed a significant fine of CZK 20,324,000 (approx. EUR 824,000) on XLCEE-Holding GmbH for its breach of commitments related to the concentration between undertakings. Specifically, XLCEE-Holding GmbH sought exclusive control over Kika Nábytek s.r.o. and Lambda Properties Czechia s.r.o., entities engaged in furniture and home accessory retailing under the Kika brand. This concentration formed part of a broader transaction encompassing Kika’s operations in Slovakia, Hungary, and Romania.
The genesis of this substantial fine traces back to 2019 when XLCEE-Holding GmbH pursued approval from the Office for a concentration of Kika Nábytek s.r.o. and Lambda Properties Czechia s.r.o. At that time, XLCEE-Holding GmbH operated the XXXLutz and Möbelix retail chains in the Czech Republic.
At an initial administrative stage, the Office identified significant concerns regarding potential competition issues, particularly within the Pilsen Region (located in the western part of the Czech Republic). To address these apprehensions, XLCEE-Holding GmbH offered commitments aimed at alleviating anti-competitive effects. One such commitment entailed divesting a retail outlet in the Pilsen Region to an independent entity, distinguished from XLCEE-Holding GmbH. The Office acknowledged this commitment, mandating its fulfilment as a precondition for approving the concentration.
Given that XLCEE-Holding GmbH failed to meet its obligation to sell the retail store in the Pilsen Region, further administrative proceedings were triggered. According to the Office, the endeavour of XLCEE-Holding GmbH to find a buyer was insufficient.
When imposing the fine, the Office recognized that finding a suitable buyer and implementing the acquisition process might have been made more difficult by the course of the global COVID-19 pandemic. However, despite acknowledging these difficulties, the Office proceeded with the fine, underscoring the stringent adherence to regulatory commitments even amidst external adversities.