Resale Price Maintenance (RPM) in Cyprus
RPM is prohibited primarily pursuant to Section 3 of The Protection of Competition Law of 2022 as a practice that restricts or distorts competition, but also under Section 6 if unfair resale prices are imposed by a dominant undertaking.
‘(1) Subject to the provisions of sections 4 and 5, all agreements between undertakings, all decisions by associations of undertakings and any concerted practices which have as their object or effect the prevention, restriction or distortion of competition within the Republic, shall be prohibited, and in particular those which−
(a) directly or indirectly fix purchase or selling prices or any other trading conditions; …’
‘(1) Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it in respect of a product shall be prohibited, in particular, if this practice results or may result in- (a) direct or indirect fixing of unfair purchase or selling prices or any other unfair, under the circumstances, trading conditions; …’
Cypriot Case Law on RPM
CPC Decision 35/2020
- The case concerned a complaint received by the Cyprus Commission for the Protection of Competition (“CPC”) on behalf of the Union of Cyprus Bank Employees (“ETYK”) and the Cyprus Bank Employees’ Health Fund (“CY-ETYK”) against the Pan-Cyprian Pharmacists Association (“PPA”), alleging violations of The Protection of Competition Laws of 2008 to 2014, one of which related to RPM.
- According to Regulation 18 of Κ.D.P. 180/74 of the PPA (secondary statutory instrument): “18. Any pharmacist shall be prohibited from selling any pharmaceutical products at prices below those fixed on the basis of the provisions of any Law or Regulation.”
- The maximum selling price of pharmaceutical products was determined on the basis of a relevant ministerial decree and published through the website of the Ministry of Health’s Pharmaceutical Services (“PS”).
- In light of the above, the CPC stated that, in effect, the prohibition of Regulation 18 of Κ.D.P. 180/74 to sell at prices lower than those fixed under any Law or Regulations, referred to the relevant ministerial decree and the relevant price list that was posted on the website of the PS and the PPA. According to the CPC, this meant that the price set as a maximum price was essentially transformed to a fixed price.
- The CPC came to the preliminary conclusion that this practice infringed section 3(1)(a). It then unanimously decided to accept proposed commitments on the part of the PPA, one of which was to amend Regulation 18 of Κ.D.P. 180/74 as follows: “The retail price of any pharmaceutical product shall be determined by each pharmacist freely.”.
CPC Decision 20/2020
- Following a preliminary investigation, the CPC found a violation of section 3(1)(a) and corresponding Article 101(1)(a) TFEU by supply companies of fine-cut tobacco for rolling cigarettes, in the form of a concerted practice consisting in the direct or indirect fixing of the wholesale and retail resale prices on the market.
- The CPC accepted commitments offered by companies FEREOS, COSMOS, CASSANDRA, GIORGOS KATSAFADOS and B.A.T. whereby, inter alia, they undertook not to exchange documents containing information on the prices of fine-cut tobacco products and to terminate the issuance and circulation of price lists of fine-cut tobacco products in which wholesale prices were recorded.
- The companies that were to continue circulating price lists and circulars with proposed retail prices of fine-cut tobacco products, undertook that they would not include wholesale prices for fine-cut tobacco in such lists. They also undertook to amend their price lists in such a way that it would be made absolutely clear that indicative retail prices for tobacco products for roll your-own cigarettes were not binding but only proposed prices.