The Public Competition Enforcement Review: Greece
Almost 10 years have elapsed since the reform of Greek competition law through the introduction of Law 3959/2011. This was the first time since 1977 that the legislator opted not to modify the Law, but rather to introduce a new one. Essentially, the newer Law codified the old provisions, but also introduced some new provisions, taking case law into consideration, further harmonising it with EU law and introducing some new innovations.
The current Law has reduced the number of the members of the HCC from nine to eight, of which six are full-time appointees (the chair, the vice chair and four commissioners or, as per the terminology of the law, rapporteurs) and two are part-time members. The Law keeps the radical changes introduced in 2009 regarding the composition and operation of the HCC. Ever since its establishment in 1977 (before Greece joined the then European Economic Community), the HCC was made up of experts appointed by the supervising Ministry (originally the Ministry of Commerce, which subsequently was merged into the Ministry of Development) and a number of representatives from the business community, and even the General Confederation of Greek Workers, which had expertise in the field of competition, was close to the market and had an understanding of economics. The HCC was independent of the Ministry's Competition Service, which has operated under various names and forms since the establishment of Greece's competition regime. The only connection between the two bodies was that the chair of the HCC was also head of the Competition Service. Traditionally, the HCC has been considered as a tribunal while the Competition Service was the prosecutor, meaning that the chair's dual role was problematic.
The Law kept the 2009 regime of Law 3784/2009, under which the rapporteurs and the chair form the majority of the HCC in plenary session, while also acting as the heads of the Competition Service; however, the Law states that the rapporteur in each case does not have a voting right. Individual rapporteurs are assigned cases by lot, carried out by the HCC in a plenary session. They express their position on a case in a report that they submit to the HCC, without the HCC being bound by it (although it is rather unlikely that the HCC will adopt a different position given that it is naturally the rapporteurs who have the best knowledge of the case, and thus it is more likely that their opinion may influence the other members than not). Under the previous regime (prior to 2009), the Competition Service issued recommendations to the HCC, which would then hear a case. The Law also introduced the specific post of vice chair. Both the chair and the vice chair are selected by Parliament's Chamber of Presidents.
The Law also provides for a five-year statute of limitations. Under the previous regime, the position of the HCC on this point had been vague, but nevertheless with the tendency that there was no statute of limitations, except for a fine (and not for the recognition of a violation). This led to rulings on violations that occurred more than 20 years ago. The current provision aligns Greek legislation with EU legislation and adopts the jurisprudence of the European courts.
Law 3784/2009 also introduced shorter time limits. In particular, statements of objections must now be submitted within 90 days of the assignment of a case. For concentrations, the time for issuing a decision is limited to 45 days from the date of notification of the concentration. Finally, the HCC has six months for the hearing of a case to take place and to issue a relevant decision. The HCC in its new form seems to be capable of meeting these deadlines.
Regarding the criteria for the calculation of fines (previously, severity and duration of a violation), the Law added a geographical dimension to the violation, its duration and the method of participation of the specific undertaking, and finally the financial benefit that the undertaking gained from the specific violation.
The Law has also tried to fill a gap in the liability of members of associations; if an association is found guilty of violating competition law, it is now expressly stated that, if the association cannot pay the fine, it must ask its members to finance the payment. If the members do not respond, then the members whose representatives participated in the violation are jointly and severally liable for the payment of the fine.
It is important to note that the Law provides for personal liability for individuals that are proven to have participated in preparatory actions, the organisation or commission of the violation, with fines ranging from €200,000 to €2 million; however, with the introduction of a minimum fine for individuals, there is no such provision for undertakings.
The Law has also modified and introduced various fines:
- for culpable violation of the obligation to notify a merger, the fine increased from a minimum of €15,000 to €30,000 for each notifying undertaking, and the cap has increased from 7 to 10 per cent of the annual turnover of the undertaking;
- for gun-jumping in mergers, the cap was reduced from 15 to 10 per cent of the annual turnover of the undertaking;
- in a case of non-compliance with a decision of the HCC, a fine of up to 10 per cent of the annual turnover of the undertaking was introduced; and
- in the case of repeated non-compliance with a decision, the fine was reduced to 10 per cent of the annual turnover of the undertaking (from 15 per cent).
Criminal liability (Article 44 of the Law) is attached to cartels (punishable by a fine of up to €1 million and imprisonment for at least two years), regardless of whether there has been an effect on the market, as well as to abuse of dominance (subject to a fine of up to €300,000). Discussions have arisen as to whether this provision is unconstitutional, but it remains to be seen how it will be implemented by the courts. So far, though, the Greek courts, including the Supreme Court, have applied Article 44 Paragraph 2 in an individual case of director's criminal liability for abuse of dominance, without accepting concerns over the unconstitutionality of Article 44.
Finally, the Law introduced changes to the notification obligations. Under the Law's provisions, the post-merger notification (Article 4a of Law 703/77) is abolished and there is no obligation to notify agreements that fall under Article 1 (in line with EU law). It should also be borne in mind that the power that the Ministers of Regional Development and of Finance had under the previous Law to approve a concentration that had been prohibited by the HCC has now been rescinded under the current Law.
The regulation for the functioning and operation of the HCC was issued by a Common Ministerial Decision dated 16 January 2013. The regulation aligns the procedural framework of the HCC to the current Law, and also inserts provisions deriving from the experience of the HCC. In addition, it defines the internal operational system and financial administration of the HCC, taking into consideration the rules of transparency and efficiency of its financial resources.
In general, Greek competition law transposes Articles 101 and 102 of Treaty on the Functioning of the European Union (TFEU). Although the HCC is the body with general competence to rule on competition law, special competence regarding telecommunications, as well as the postal services market, is granted to the Hellenic Telecommunications and Post Commission (EETT). The EETT may request the HCC's assistance or even refer a case to it. Decisions issued by the HCC (or the EETT) are subject to appeal before the Athens Administrative Court of Appeal (with further appeal to the Council of State for errors of law).
The HCC also cooperates with several consumer unions and other independent authorities in order to facilitate its enforcement work. In September 2020, a memorandum of understanding was signed between the HCC and the Hellenic Regulatory Authority for Energy (RAE) in order to promote policies for the information of the economic operators in the energy market on matters relating to the responsibilities of the two authorities. Joint guidelines are expected to be issued to that regard.
The services of HCC consist of three offices reporting directly to the chair: the Office of the Chair, the Secretariat and the Directorate General for Competition (DG COMP). The DG COMP is responsible for the defence and legal support of actions taken by the HCC, both in and out of court, as well as for the judicial defence and legal support of the HCC's members and staff. It is made up of four directorates and one autonomous department.
To date, the implementation by the HCC of the current Law has been successful, although there is room for improvement.
i Prioritisation and resource allocation of enforcement authorities
The year 2020 was deeply marked by the covid-19 pandemic, which in turn unavoidably left its mark in Greek competition enforcement. The HCC immediately prioritised covid-19 related cases at the onset of the pandemic, and proceeded to the creation of a specialised covid-19 taskforce to, among other things, serve as a hub for monitoring sectors sensitive to the pandemic's effect (especially healthcare, personal hygiene and online marketing) and to opine on the need for special measures, in the form of legislative interventions or Article 101 Paragraph 3 TFEU exemptions for emergency practices implemented by undertakings to combat the effects of the pandemic (e.g., emergency horizontal agreements). This declaration of an intent to apply Paragraph 3 exemptions was a turning point for the HCC, which had almost never in the past (in line with the relevant European Commission practice) touched on Paragraph 3 exemption issues. It remains to be seen whether the HCC will crystallise its intent into covid-19-related exemption decisions.
In the same context, following widespread complaints about the price of essential healthcare products (masks and antiseptics), the HCC also promptly launched a relevant investigation which is still ongoing. An investigation is also active with respect to practices relating to covid-19 testing kits. The HCC also conducted dawn raids in companies active in the basic foods sector, as well issued a number of guidelines on the investigation of vertical practices and on the prioritisation of price-related violations by dominant companies during the period of the pandemic.
As further analysed below, 2020 also saw an impressive increase in the exercise of the HCC's competency to launch sectoral investigations; a trend which demonstrates a clear policy shift towards pre-emptive action and targeted market interventions.
In total, in spite of the pandemic and necessary remote working conditions, 2020 may arguably be characterised as one of the most productive years for the HCC, which underwent an extensive internal reorganisation of its directorates in order to adopt the organisational model of other major foreign authorities, coupled with significant staff increases. According to the latest data published by the HCC, 13 decisions were issued regarding concentrations, and six regarding Articles 1 and 2 of Law 3959/2011. It should be noted, however, that this year the HCC employed the sectoral investigation tool more often than in almost all the previous years of its existence, and with several advocacy activities (teleconferences, newsreels, reports etc.) either undertaken or under way. It is expected that this modernisation trend will expand the HCC's activity towards this less traditional enforcement work, with the introduction of further sectoral inquiries and a stronger focus on advocacy, international relations and policymaking.
ii Enforcement agenda
On 7 July 2011, the HCC issued a notice on enforcement priorities. According to this, the prioritisation of cases is generally based on the criterion of public interest. In this context, and according to the HCC, priority is given to ex officio investigations or complaints pertaining to:
- hardcore restrictions (price fixing, market sharing, and sales or production restrictions) of national scope, especially in cases of horizontal agreements (cartels), particularly taking into account the market position of the undertakings involved, the structure of the relevant market and the estimated number of the affected consumers;
- products and services of major importance to the Greek consumer where the anticompetitive practice under examination may have a significant impact on prices or the quality of the services (especially as compared with Member States of the European Union); and
- anticompetitive practices with cumulative effect (i.e., practices applied by a large number of companies that are able to pass on the increased prices to intermediate undertakings or final consumers).
All of the above were more or less the same in a previous HCC Notice in 2010, but this time the HCC has also prioritised the review of relevant leniency applications, if all the criteria of the leniency programme are met; and compliance with the rulings of the Athens Administrative Court of Appeal and the Council of State (the Supreme Administrative Court) issued in appeal proceedings concerning prior decisions by or actions against the HCC.
As in the 2010 Notice, the HCC has also prioritised the adoption of exceptional regulatory measures in certain sectors of the economy according to the strict terms of Article 11 of Law 3959/2011 and, as stated by the HCC, provided that such measures are absolutely necessary, suitable and proportionate for the maintenance of effective competition.
The prioritisation of any particular case also depends, according to the HCC, on the authority's resources, the possibility of proving an infringement, the necessity of providing guidance on novel issues of interest, as well as an assessment of whether the HCC is the best-placed body to act (particularly having regard to the jurisdiction of national courts to deal with cases of private interest).
On 24 May 2012, pursuant to Article 14(2) of the Competition Act,2 the HCC adopted an internal management tool in the form of a point system for the investigation of cases by the Directorate General. In particular, according to this decision, the Directorate General shall investigate pending cases according to their ranking on the basis of a point system, which essentially exemplifies and quantifies the priority criteria set out in the Notice on Enforcement Priorities.3
On 24 September 2015, the HCC issued a second decision4 (published on 4 March 2016), on the quantification of the criteria for prioritisation of pending cases. The decision was issued so as to update a previous decision by providing more specific guidance based on the experience gained by the HCC in the three years that had passed since the issue of the first decision. The second decision was largely the same as the first one in terms of the general principles of prioritisation, but did, however, set a three-month time limit (from the filing of a complaint or the commencement of an ex officio investigation) within which a case must be ranked using the point system, whereas the previous decision set none. It also introduced a negative point system applicable in cases where the statute of limitations has expired and a fine may no longer be imposed, or where the facts of the case are such that the HCC may reasonably believe that the anticompetitive practices have ceased or altered in ways that mitigate the competition concerns.
On 21 November 2019, a new point system was established by virtue of HCC Decision 696/2019, which introduced a novel way of calculating the degree of priority of various cases, by correlating via a mathematical formula two, separately calculated, factors, namely the 'impact' of the case and the 'economy of time and human resources' needed to handle it. It is notable that, contrary to past practice, the new point system was introduced following a public consultation on the subject, which considered the respective views of consumer association, businesses and various stakeholders. Aside from taking into account factors that existed also in the previous point systems (such as, for example, whether a practice is hardcore, its geographic extent and the existence of novel legal issues), the new point system refines the notion of 'public interest' as a factor for prioritisation, and also assigns, for example, priority to cases deriving from complaints by consumer associations with which the HCC has concluded a memorandum of cooperation. Another novelty is the introduction of an 'impending prescription factor', which applies to cases that are nearing prescription and multiplies the final score, so that these cases achieve a higher priority ranking for investigation.
The point system aims at enhancing the efficiency of investigations, the focus being on important cases with increased estimated impact on the functioning of effective competition or overall systemic effect, or both, while promoting a more coherent and targeted policy of prioritising pending cases.
The point system is intended solely for internal use (such that the ranking of each individual case at the investigation phase is not made public, or notified to the complainant). Moreover, it provides for the possibility of rejecting complaints that get a low priority ranking according to the point system.
As mentioned above, the HCC focused its enforcement priorities for 2020 on sectors directly affected by covid-19, that is, healthcare, personal hygiene, food and e-commerce. Technology and e-commerce are expected to remain high on the HCC's agenda in the years to come. Interestingly, the HCC further launched a Fair Competition and Sustainable Development Initiative, aimed at examining the competition law approach toward practices related to the achievement of sustainability goals, and the extent to which sustainability can serve as an efficiency or even as a reason for granting a Paragraph 3 exemption; repeating here that the Paragraph 3 exemption issue had been previously left almost untouched by the HCC in the past years, only to be brought about as an issue in 2020 in the context also of covid-19-related emergency practices. The HCC plans to issue sustainability guidelines in this respect.
i Preliminary remarks
As previously stated, the general provisions contained in Article 101 TFEU have been introduced word-for-word into the Greek legal system (Article 1 of Law 3959/2011), and the HCC aims to follow the jurisprudence of the European Commission and the European courts in the case of cartels. Even though it has adopted a leniency policy, and declares itself open to considering any commitments to remedy the effects of cartels prior to discussing any case, in practice, the way the HCC deals with cartels has not changed. The leniency policy was only successfully applied for the first time in 2017, in a major cartel case involving more than 40 companies in the constructions sector. That being said, the HCC has been making extensive use of the settlement mechanism in cartel cases, almost all of which were resolved via the settlement procedure.
ii Penalties – leniency policy
In the case of an infringement of Article 1 of Law 3959/2011, fines of up to 10 per cent of the total turnover of the undertaking can be imposed by the HCC.5 The HCC has also adopted the practice of the European Commission according to which, in cases where the violation concerns a specific product or sector, a maximum fine of 30 per cent of the turnover for that sector applies, but this cannot exceed 10 per cent of the overall turnover provided for by law. There could also be criminal liability of the persons who initiated or participated in the formation and implementation of the cartel. In August 2011, the HCC adopted a leniency programme6 based on the European Commission's programme providing for immunity or reduction of fines. In 2017, the programme was applied successfully for the first time in a major cartel case in the constructions sector (as analysed further below); however, before that application, only one known application had ever been made, which was unsuccessful. 2020 saw the application of the leniency programme once again in a bid rigging case for the supply of material for the construction of a hospital in Ioannina; however, this does not alter our general observation that the leniency programme, for several reasons pertaining to the Greek market reality, has scarcely been applied, despite its generous conditions for the prospective leniency applicant (including the possibility of complete immunity from fines).
In addition, the parties can (according to Article 6, Paragraphs 5 and 6 and Article 8, Paragraph 8 of Law 3959/2011) offer binding commitments to remedy the effects of a cartel. If the HCC accepts these commitments, then the procedure comes to an end and no fines are imposed. Following one of the first cases, in 2008, when the HCC had accepted these commitments,7 the HCC is generally reluctant to accept commitments, using the argument that these cannot be accepted in hardcore (per se) violations. There have, however, been some more examples in the past few years where it was considered that commitments would be more efficient than 'traditional' enforcement and the imposition of fines.8 Indeed, the HCC's priority should be to protect the mechanisms of the market rather than applying huge fines, which are counterproductive.
Although the law provides that undertakings can be offered commitments after the assessment of a violation, the guidelines provide that these can also be offered at the beginning of the process; this constitutes a useful compromise, which avoids further use of time and resources while achieving a result similar to a consent decree.
iii Settlement procedure
On 18 July 2016, the HCC issued decision 628/2016 by which it formally established a settlement procedure for cartel infringements, thus further bringing its practice in line with that of the European Commission, which first introduced this procedure in 2008. Pursuant to the decision, companies may express their interest, in writing, to partake in the settlement procedure, either before the issuance of a statement of objections or after, within a maximum of 35 days prior to the date set for an oral hearing (in contrast to the European Commission, which will always carry out the procedure prior to the issuance of a statement of objections). The HCC meets in plenary session to approve or reject these expressions of interest, and if it approves them, proceeds to holding bilateral meetings with each implicated undertaking, wherein it set outs the facts of the case, the scope of the infringement and the extent of the participation of the undertaking concerned, the key evidence on which it bases its findings, as well as the range within which the fine can be expected to fall.
Following the conclusion of these meetings, which can be as few or as many as the HCC deems necessary in each case, an undertaking is then given a 30-day deadline within which to file its settlement submissions, by which it must unreservedly admit its participation in, and liability for, the cartel, accept the (maximum) range of the fine which may be imposed, and forgo the right to receive full access to the file and to an oral hearing before the HCC. The HCC then issues a proposal accepting or rejecting the settlement submissions and setting out the conclusions of the meetings and, if the undertaking concerned accepts this proposal, a settlement decision is issued officially by the HCC.
Prior to issuing a settlement decision, the HCC is neither bound nor limited by anything that took place during the procedure and maintains the right to terminate it. Upon so doing, the settlement submissions and proposal are wholly revoked and may not be used as evidence against the implicated undertaking by either the HCC or by the competent courts on appeal. Unlike the European Commission, which offers a 10 per cent reduction, the HCC offers a 15 per cent reduction of the fine for cases that successfully complete the settlement procedure. Viewed in light of the ongoing financial crisis in Greece, which has hit businesses especially hard, it is anticipated, and has been confirmed in practice, that this settlement tool will often be put to use.
In fact, the issue of this HCC decision essentially – and most likely, on purpose – coincided with the issue of a statement of objections for the largest case ever dealt with by the HCC, both in terms of the number of implicated undertakings (40) and the fines threatened (over €200 million). The statement of objections was issued following an ex officio investigation into tenders submitted, and respective contracts awarded, for public infrastructure works, which concluded that bid rigging took place on a significant scale, covering multiple projects and spanning the better part of 26 years. The settlement decision was eventually issued on 10 March 2017, and was followed by a standard hearing procedure for the undertakings that did not participate in the settlement.9
Since then, the HCC has been making extensive use of the settlement procedure; 2020 was no exception, with the HCC issuing another settlement decision in the only cartel case adjudicated before it this year. Τhe increased importance of the settlement procedure is apparent from that it is tested in most horizontal cases that the HCC has dealt with since its inception (although not all undertakings involved in those cases wished to settle).
iv Significant cases
In 2020, the HCC continued to deal with bid rigging cases throughout the country, albeit of minor economic value. Following a simplified settlement procedure, the HCC found that two local companies had agreed to market allocation in a public tender for the supply of equipment for the building of the University General Hospital in Ioannina.10 It should be noted, however, that the first undertaking obtained immunity from fines under the leniency programme, while the other was given a fine reduction according to the settlement procedure.
Bid rigging, through cover bidding and exchange of information, was also established in the case of public tenders regarding private security services, where the companies also used the tool of the settlement procedure.11
Finally, the HCC, following the finding of an horizontal concerted practice of bid rigging regarding a public tender for the construction of a high school in the prefecture of Fthiotida, imposed the relevant fines on the firms that did not participate in the settlement procedure.12
The HCC's investigation of all major Greek banks on suspicions of price-fixing in ATM and other bank service charges that began in 2019 continued throughout 2020. The continuation and completion of this investigation, which triggered the biggest dawn raid ever witnessed up to date in the Greek market, is considered a top priority of the HCC.13
Following a relevant complaint, the HCC has been investigating an alleged infringement of Articles 1 of Law 3959/2011 and 101 TFEU in the Greek market for the sale or distribution of wristwatches, and has issued a statement of objections14 accusing the companies involved in several vertical practices, including resale price maintenance, parallel trade restriction and restriction of cross-supplies between distributors and passive sales restrictions. The HCC is expected to convene within 2021 in order to examine the alleged infringements.
v Trends, developments and strategies
Overall, it appears that the HCC has taken a turn toward more pre-emptive action against cartels, by emphasising dawn raids and ex officio investigations and by acting swiftly on complaints and news publications about price increases in specific sectors. Covid-19 practices remained a top priority throughout 2020, although eventually no related cases were brought before the HCC; the HCC has also put e-commerce high on the agenda along with the food sector, which has always been prioritised by the HCC owing to its importance for the Greek economy. Investigations for concerted practices on the transport industry, and more specifically, on ferry links in the Ionian Sea as well as on ground aircraft services, are ongoing. Last but not least, there is great interest over whether the dawn raid conducted against the major Greek banks will result in the issuing of a statement of objections for price-fixing charges.
Antitrust: restrictive agreements and dominance
i Significant cases
Vertical agreements, restrictive franchise agreements and abuse of dominant position
In 2020, antitrust and abuse of dominance enforcement continued at a relatively slower pace, as in 2019. The latter was characterised by the application of the, up to now scarcely applied, interim measures procedure against allegedly abusive behaviours. In particular, the HCC had imposed interim measures against Argos, the sole press distributor in Greece, to prevent it from unilaterally implementing a new commercial policy with newspaper publishers that allegedly included disadvantageous terms for the latter that were never subject to negotiations.15 Subsequently, a statement of objections was issued identifying a number of anticompetitive unilateral practices (market allocation, determination of a minimum profit margin, non-compete clauses, exclusivity agreements).16 The final decision on this case is expected during 2021.
Furthermore, the HCC imposed interim measures on Elmin Voxites for unilaterally reducing the supply of bauxite to the Mytilineos Group as a 'threat' to force the latter to accept more disadvantageous terms of supply. Elmin Voxites was ordered to continue the regular supply of bauxite to Mytilineos and to commence negotiations for the conclusion of a contract that would secure the regular operation of Mytilineos. According to the statement of objections,17 Elmin Voxites complied with said order for interim measures. What is more, it appears that there is no evidence that Elmin Voxites violated Articles 2 of Law 3959/2011 and 102 of the TFEU, through total or partial refusal to sell, excessive pricing and monopoly inefficiency in the bauxite production and supply market. The final decision by HCC is expected during 2021.
Following a complaint against the company FREZYDERM SA, HCC initiated an ex officio investigation for alleged violations of Articles 1 and 2 of Law 3959/2011 and Articles 101 and 102 of the TFEU, in the relevant market of production and marketing of cosmetic products, personal and baby care products, 'parapharmaceuticals' and other related products. According to the relevant statement of objections, although FREZYDERM did not hold dominant position in the relevant market, a number of restrictive contractual terms were identified, such as restrictions of mutual supplies between the authorised Greek retailers of its selective network, restrictions of their wholesale export sales (active and passive) to selected distributors, and restrictions of sales of the authorised Greek retailers to the (wholesale) Greek drugstores or members of the selective distribution network of the company, resulting in a restriction of intra-brand competition. The relevant HCC decision is also expected during 2021.
Moreover, in 2020, the HCC continued an older investigation against a major retailer company DIMKA SA in the Greek market for general purpose gas appliances. According to the statement of objections,18 during the period 2005–2019, the company, which holds a dominant position in the relevant market, applied a rebate scheme by granting target discounts to most of the supermarkets with which it concluded agreements. Resale price maintenance, restrictions on passive and active sales and single branding (non-compete) are also established pursuant to the statement of objections. The final decision is scheduled to be issued during 2021.
ii Trends, developments and strategies
Sales restrictions and pricing practices (rebates etc.) at a vertical level, either by dominant companies or not, always remain high in the HCC's enforcement agenda; however, there is a clear trend towards more pre-emptive action, evidenced both by the increased application of the interim measures procedure these last years and, importantly, the launch of several sectoral investigations to identify market failures and propose market interventions. Covid-19 related practices, to the extent identified, are also sure to draw the watchdog's attention, as made clear by several HCC public announcements and reports.
Sectoral competition: market investigations and regulated industries
The HCC, as per Article 11 of Law 3959/2011, may examine particular sectors of the Greek market, and if it ascertains that in that particular sector there is no effective competition, it can take any regulatory structural measure for the creation of effective competition conditions. Up to 2020, the HCC had only rarely applied this procedure: pursuant to the previous equivalent Article 5 of Law 703/77, in the case of oil companies in 2008, and later, pursuant to Article 11 of Law 3959/11, in the market of production, marketing, distribution and retail of fresh fruits and vegetables in 2013. However, at the beginning of 2021, the HCC announced the initiation of the procedure referred in Article 11 of L. 3959/2011 for regulatory intervention in two cases: in the construction sector,19 following the important decisions delivered by the HCC over the last four years in the context of anticompetitive practices (bid-rigging) adopted by undertakings active in the construction industry, and in the press distribution sector,20 in the light of the relevant concerns identified by the HCC21 regarding the structural weakness of press distribution market (which is perceived as a quasi 'natural monopoly' or 'essential facility').
The HCC also has the power, under Article 40 of Law 3959/2011, to conduct an investigation into a particular sector of the economy or into types of agreements in certain sectors when it believes that there are indications (such as the level at which prices are set) of a potential restriction or distortion of competition. To this end, it has the power to request companies active in a particular sector to submit any information (including agreements with suppliers or buyers, company policies, etc.) it deems necessary and to conduct searches. It may then issue a report detailing its findings, or further investigate an undertaking if it uncovers potential anticompetitive practices.
In May 2016, given the continuing consolidation in the supermarket sector over the past years and in order to gauge the buying power of large supermarket chains, the HCC commenced an investigation into the supermarket product retail sector, sending out questionnaires to both leading and smaller market players. On 13 April, the HCC published a lengthy interim report of sector inquiry into basic consumer goods, containing general remarks over the market structure (e.g., barriers to entry, bargaining power) and the business practices (e.g., product placement, exclusivity clauses, rebates, reporting obligations). It also proposed specific solutions, such as the adoption of non-binding guidelines (e.g., ethics codes or good practices) and the introduction of legislative changes in market regulations and of new institutions (e.g., mediation). Following a public consultation, the relevant final report is expected to be published within 2021.
What is more, the HCC developed an extensive activity in the digital economy environment. It launched two separate sectoral inquiries into e-commerce and into financial technology services (fintech), both having an increasing importance in the light of covid-19 pandemic crisis. The findings of said inquiries are expected during 2021. Furthermore, the HCC published an independent review of mobile data connectivity competitiveness in Greece, examining the factors that underpin the prevailing high mobile data connectivity prices and discussing the 5G investment strategies, the potential effects of such strategies on effective competition, as well as the upcoming 5G auction in Greece (with emphasis on ex post competition concerns and by discussing the effectiveness of ex ante and ex post regulatory remedies).
Under the Greek legal system, the HCC may not examine any cases of state aid to undertakings, as its competence is restricted to undertakings' behaviour. Any case involving aid by the state must be handled by the European Commission.
As per Law 3959/2011, only major concentrations fall under the jurisdiction of the HCC, which examines whether they significantly impede competition.
The HCC is exclusively competent to apply merger control provisions in all market sectors; however, for specific liberalised industries, such as telecoms and energy, there are separate national regulatory authorities (the EETT and RAE, respectively) that are also competent to apply competition rules, including merger control provisions, in cooperation with the HCC. Law 3959/11 (Article 24, Paragraph 2) specifies the terms of cooperation between the authorities, given that in most cases coordination is required.
A separate authority for the sea transportation industry, RATHE, was abolished in 2004. Competence for these cases now lies with the HCC, although Law 3260/2004 provides that an expert from the Ministry of Economy and Development must participate in the hearings and deliberations of the HCC as a non-voting member. Furthermore, a specialist authority for the ports sector, the Regulatory Authority for Ports (RAL), was established in 2016, which is competent to take regulatory measures concerning competition between ports and to cooperate with the HCC for the enforcement of competition rules; however, the new authority does not have any merger review competencies.
The HCC is also competent to handle mergers with a Community dimension that are referred to it by the European Commission, as per the provisions of EU Regulation No. 139/2004.
ii Pre-merger notification
Concentrations that fall under the definition of the new Law (Article 6) are subject to a pre-merger notification. If they are implemented prior to clearance by the HCC or contrary to a prohibition decided by the HCC, the undertakings concerned are subject to serious sanctions (i.e., a penalty and possible invalidity of the concentration). A penalty is also imposed for late notification, even if the parties have not yet implemented the concentration or if the concentration was finally approved.
Merger control is exercised when a concentration exceeds the following turnover thresholds: the combined aggregate worldwide turnover of all the undertakings concerned is at least €150 million; and cumulatively, the aggregate turnover of each of at least two of the undertakings concerned in the Greek market exceeds €15 million.
The above thresholds apply for all market sectors, except mass media, where special legislation (Law 3592/07) defines the respective thresholds as follows: the combined aggregate worldwide turnover of all the undertakings concerned is at least €50 million; and cumulatively, the aggregate turnover of each of at least two of the undertakings concerned in the Greek market exceeds €5 million.
Deadline for notification
While EU Regulation No. 139/2004 does not set any notification deadline, and while it is in the parties' interest to move quickly to gain clearance and implement a merger, in Greece, notification must be made within 30 days of the entry into an agreement or the publication of an offer or an exchange, or the obligation from the undertaking to acquire participation, which secures the control of another undertaking. Parties to a concentration, which consists of a merger or the acquisition of joint control, shall notify the concentration jointly. In all other cases, the notification shall be effected by the person or undertaking acquiring control of the whole or part of one or more undertakings.
Definition of concentration
A concentration shall be deemed to arise where a change of control on a lasting basis results from the merger of two or more previously independent undertakings or parts thereof, or the acquisition of direct or indirect control of the whole or part of an undertaking, regardless of the way in which this acquisition is affected. Article 5 of Law 3959/11 follows the definitions of Regulation No. 139/2004.
Cases of a change of control (e.g., changing from joint to full control) also constitute concentrations to be notified once the above-mentioned thresholds are met.
Creation of a joint venture constitutes a concentration only if the new entity performs all the functions of an autonomous economic entity on a lasting basis. Otherwise, it would be a cooperative joint venture, falling under the scope of Article 1 of Law 3959/11 (Article 101 TFEU) and possibly qualifying for exemption.
Greek law, following the EU substantive test (SIEC), provides that a concentration is prohibited if it may lead to a significant impediment of competition in the whole or a substantial part of the Greek market, especially by creating or strengthening a dominant position. Therefore, market share will be examined, although it is not the only decisive criterion. Within the framework of the test, the law itself specifies the basic criteria to be considered thereunder, including:
- structure of the relevant markets;
- actual or potential competition;
- barriers to entry;
- market position of the participating undertakings;
- available sources of supply and demand;
- consumers' interest; and
The above test applies in all market sectors, except mass media, where a special law (Law 3592/2007) provides for a dominance test. For the purposes of this Law, 'dominance' is translated into a market share of 25 to 35 per cent, depending on the individual case.
The content of notifications is defined by a decision of the HCC. The HCC has issued a new draft notification form (through Decision No. 558/VII/2013) and a separate form for submitting remedies (through Decision No. 524/VI/2011). The format of these templates generally follows the guidelines of the European Commission, with the purpose of making the minimum information that must be substantiated as part of the notification clear to the notifying parties. The notification form must be submitted in Greek, together with all supporting documents and a filing fee, currently set at €1,100. A summary of the notification must also be published in a daily financial newspaper, as well as on the HCC website, so that any third party (competitor, supplier, customer, customers' association) may know of the transaction and express any comments or concerns to the HCC.
Filling in and submitting the notification form improperly means that the notification is incomplete, the deadline for the submission is not met and the deadline for the HCC to issue its decision will not commence. Depending on the extent of omission, it may even be considered as a failure to notify.
In January 2015, the HCC issued a 'Notice on the Characterisation of Confidential Information and the Method for Submitting Non-Confidential Versions of Documents' (Notice). The Notice aims at clarifying the distinction between the information that should be considered confidential and that which need not, and allowing parties to utilise this distinction to characterise their own documents and submit both confidential and non-confidential versions thereof to the HCC. A prime example is merger notifications, which under this system are now submitted in two versions: a confidential version, followed by a duly redacted (per the rules set out in the Notice) non-confidential version. That being said, this Notice applies to all submissions of confidential information, not only those that are concentration-related.
The Notice sets outs indicative examples of confidential information such as professional and business secrets, correspondence between public authorities and preparatory documents, and proceeds to explain the correct method of redacting such information. It also includes a requirement of justification, meaning that each piece of information that a party deems confidential and redacts must be accompanied by a justification for this action. A lack of justification entails a presumption that the parties do not consider the information confidential and thus have no objection to its disclosure.
Given that the redacting exercise was previously carried out by the HCC, this new system purports to increase efficiency by significantly reducing the burden on administrative resources. Although the extent to which this aim will be achieved remains to be seen, this Notice is a further indication of the Commission's readiness to streamline its administrative procedure, something which is undoubtedly also in the best interests of the parties involved.
Within one month from receipt of proper notification, the President of the HCC must issue an act to certify that the concentration concerned does not fall within the scope of Law 3959/2011.
If the concentration falls within the scope of the Law, the concentration may be examined in one or two phases, in line with the practice defined by EU Regulation No. 139/2004.
Where the HCC finds that the notified concentration does not raise serious doubts as to its compatibility with the competition requirements of the relevant national markets, it issues a decision approving the concentration within a month from the date of notification (i.e., within the same period granted for verifying whether the concentration falls within or outside the scope of the law).
Where the HCC finds that the concentration raises serious doubts, its President issues a decision initiating Phase II proceedings, which decision is notified to the interested parties. This decision must be issued within a month from notification. Following this decision, the rapporteur prepares his or her recommendation within 45 days of the initiation of the Phase II proceedings, and the HCC must decide within 90 days to approve or prohibit the concentration. If the HCC fails to issue a decision within this 90-day period, the concentration is deemed approved. Both the 45 and 90-day deadlines start as of the initiation of the Phase II examination, rather than the notification date.
The first month following the notification is the most critical. Within this period, the following developments will (or may) occur: the concentration will be declared as not falling within the scope of the law; the concentration will be approved if it does not raise serious doubts that it will significantly impede competition; or a Phase II proceeding will be initiated (i.e., it is decided that a full investigation must take place).
The maximum time frame, provided that the notification is complete and no remedies have been submitted (see below), is one month plus 90 days (i.e., 118 to 121 days, depending on the length of the month).
Modifications and remedies
Within 20 days of the submission of the recommendation of the rapporteur, the parties have the right to propose remedies to remove serious doubts as to its compatibility with competition in the relevant market. Although the possibility of making modifications was introduced in 1995, the term 'remedies' was added by the new Law. The HCC may, in exceptional cases, accept a proposal of remedies after the expiration of the above deadline. In this case, the 90-day deadline may be extended by 15 days (105 days in total).
The HCC may approve the notified concentration, attaching to its decision conditions and provisions to ensure the compliance of the participating undertakings with the commitments agreed to by them, with a view to rendering the concentration compatible with the provisions of the law requiring that the concentration must not raise serious doubts about its significant impact on competition in the national market or, in the case of a joint venture, that the joint venture operates as an autonomous unit.
The HCC may threaten the participating undertakings with fines if they fail to comply with the conditions and provisions contained in the framework of the remedies.
A prohibition of a concentration implementation prior to its clearance does not prevent the concentration in certain cases:
- in the case of an acquisition of control following a public offer or other stock exchange transaction, provided that the relevant actions are notified in time (i.e., within 30 days on the date of the transaction) and the buyer does not exercise its voting rights related to the acquired titles, except (by special permission of the HCC) to maintain the value of its investment; and
- by special permission of the HCC, to avoid serious damage to one or more of the undertakings participating in the concentration or to a third party.
In addition to the general rules of the administrative law regulating the revocation of legal or illegal administrative acts, the new Law contains special rules concerning decisions approving the implementation of a concentration. One provision allows revocation of an HCC decision based on inaccurate or misleading data. Revocation in cases where the participating undertakings in the concentration violate any condition or accepted remedy is specifically regulated, thereby allowing the HCC to take any measures to dissolve the concentration, restore prior conditions, split the merged enterprises, or order the sale of the acquired shares or assets. This arrangement also applies in the case of concentrations implemented without approval.
Apart from its authority to revoke any decision approving a concentration and to restore conditions in the relevant national market, the HCC may impose fines, the amount of which depends on the type of violation, as follows:
- at least €30,000 and up to 10 per cent of the aggregate turnover in cases of violation of the obligation of an undertaking to notify a concentration subject to prior notification in a timely manner, regardless of whether the failure was unintentional but rather due to mild negligence;
- at least €30,000 and up to 10 per cent of the aggregate turnover for the implementation of a concentration before approval is granted;
- up to 10 per cent of the aggregate turnover of all participating undertakings that do not comply with the undertaken remedies; or
- up to 10 per cent of the aggregate turnover of all participating undertakings for failure to comply with the conditions of the HCC decision contained within the framework of the approved concentration.
In addition, the new Law provides for criminal sanctions, which are cumulative to the fines imposed by the HCC. Article 44 Section 1 provides for a fine ranging from €15,000 to €150,000 to be imposed by a criminal court on anyone who violates the provisions on merger control or does not comply with the relevant decisions of the HCC. The criminal character of an offence is eliminated for culprits or accomplices who notify the HCC, the Prosecutor or any other competent authority of the violation, and submit any evidence of the offence.
Statute of limitations
Article 42 of the new Law provides that any violations of the Law are subject to a five-year statute of limitations, which starts on the date the violation was committed. In the case of a continuous violation or a repeated violation, it starts on the date the offence ceased.
Contrary to EU Regulation No. 1/2003, which only refers clearly to the violation of Articles 101 and 102 TFEU, the above provision, providing for 'any violations of the law', appears to also cover infringements of Greek merger control provisions. Such provision on the limitation period is absent from EU Regulation No.139/2004, but is indirectly found in Regulation No. 2988/74 (Article 1), which remains applicable for any competition infringements other than those falling under Regulation No. 1/2003.
The main question is whether late notification, prior implementation, or both, of a merger would be considered to be a continuous violation. It must be noted that issues regarding a statute of limitations have not been tackled by the HCC in merger cases.
However, the general rule of the administrative law should apply, which does not allow for the revocation of an illegal act after the lapse of a reasonable time; a period of five years is considered to be such.
The statute of limitations is interrupted by any act of the HCC (or the EC) during the investigation of the violation or of the procedures related to the specific violation, including but not limited to written requests of the HCC or another authority to provide information, orders for audits (or dawn raids), assignment of the case to a rapporteur, or servicing of a statement of objections or of a recommendation report. The interruption starts from the date of communication of the relevant act to at least one of the undertakings participating in the violation, and applies to all participants. The deadline for completion of the statute of limitations is suspended during the time that the act or decision of the HCC in relation to the case is pending before the courts. In any case, the statute of limitations is completed upon the lapse of 10 years (i.e., double the basic period of prescription).
Strictly speaking, legally the statute of limitations is an institution of civil law, and refers to claims against a person. The term is not compatible with the public law terminology, where the authorities do not exercise any right but perform their duties in accordance with the law. Therefore, in terms of administrative law, we should rather refer to a peremptory deadline, following the lapse of which the HCC is deprived of its authority to act and enforce the specific provisions of the law.
The enforceable decisions of the HCC are subject to appeal (application for annulment) directly to the Athens Appellate Administrative Court. In merger cases, an appeal would normally challenge a decision of the HCC that either prohibited a merger or fined the undertaking for an alleged violation of merger control provisions (e.g., late notification). However, there has been one case where a third party successfully challenged the approval of a merger in court.
The Court examines both the legality and the substance of a decision, which may be annulled in full or in part. This includes a reduction of fines (if any), which is not uncommon. In contrast, the annulment of decisions is not as common: in many cases, this is due to technicalities, because of the HCC's inability to adhere strictly to the administrative procedural rules.
An appeal does not suspend payment of a fine, or the enforcement of other conditions or remedies imposed by the opposed decision. The Court may, however, suspend enforcement, in full or in part, conditionally or unconditionally, in extreme cases (e.g., in an unfounded decision or due to the inability of the undertakings to pay the fine). Regarding a provision strongly contested as being unconstitutionally limiting, the Court has the authority to reduce the fine by up to 80 per cent.
The decision of the Appellate Court is subject to appeal (cassation) before the Supreme Administrative Court for legal reasons only (i.e., incorrect application of the law, assuming as correct the factual basis accepted or the dictum not being supported by reasoned arguments). Exceptionally, the law also allows the suspension of a contested decision of the Appellate Court by the Supreme Administrative Court.
In the event that a decision of the HCC is totally annulled, a case may be re-examined by the HCC, which will rejudge the case based on the conditions prevailing in the market at the time of this re-examination. A new or supplementary notification will be required if the conditions of the market have changed or the data submitted needs to be updated (Article 8, Section 13). This is a new provision introduced by the current Law that increases the discretionary authority of the HCC, as the decision of the Court is based on different facts from those that will form the basis for the re-examination of the notification for a second time.
iii Significant cases
Recent HCC decisions on concentrations – overview of mergers and acquisitions
The past year was characterised by significant M&A activity across several diverse sectors of the economy, despite the implications of covid-19 and the fact that Greece still has a long way to go until recovery as a result of the financial crisis.
By virtue of decision 700/2020, the HCC unconditionally approved the acquisition of joint control of Alpha Satellite TV SA, Alpha Radiofoniki SA and Alpha Radiofoniki Kronos SA, through holding company Nevine Holdings Limited, by Motor Oil Hellas SA, Alpha Media Group Limited and Dimitrios Kontominas. The HCC found that the concentration fell under both the Greek competition law, Law 3959/2011, and Law 3592/2007, which regulates concentrations in the mass media sector. However, the acquisition would lead to a market share less than 35 per cent, which is the threshold of Law 3592/2007, below which the concentration normally does not create competition concerns.
In line with previous years, consolidation in the supermarkets and retail sector continued also in 2020, although at a slower pace.
The HCC unconditionally cleared the acquisition of the Galaxias-Dimitra supermarket chain,22 active mostly in certain islands, by SYNKA Crete, without identifying any competition concerns.
In addition, the HCC decided23 to modify commitments undertaken by MASOUTIS in the context of its acquisition of the supermarket chain PROMITHEYTIKI24 by changing the stores that MASOUTIS should divest in the island of Andros, due to objective inability of MASOUTIS (despite the company's best efforts) to divest the stores that it had initially committed to.
Also in the context of examining compliance with the remedies imposed by a previous HCC decision (No. 658/2018), which cleared the acquisition of sole control over HELLENIC SEAWAYS SA by ATTICA GROUP, the HCC decided25 that the company ATTICA GROUP did not comply with the remedies imposed regarding certain routes and further ordered specific remedies, such as the increase of the weekly route frequency to a remote island and the introduction of a new route not currently offered by a ferry company, imposing a relatively small fine for this non-compliance.
On 5 March 2020,26 the HCC approved the acquisition of 99 per cent of D MARINAS HELLAS (the company which owns the famous Marina Zeas in Piraeus) from VENILA Investments, a subsidiary of the multinational fund CVC. The concentration, which concerned the market for the offering of port services from tourist marinas and ports, did not create any competition concerns.
The HCC approved, by virtue of decision No. 706/2020, the change from joint to sole control by Andromeda Seafood SL of Perseus ABEE, a company active in the market for fresh fish from Mediterranean fish farms, without identifying any competition concerns.
The HCC approved the acquisition of joint control of the company Pearl Ltd by OCEAN Logistics Ltd (belonging to the COSCO group) and A Panagopoulos without identifying any competition concerns. 27 The target company is active in the market for cargo transit and container transportation by sea and rail.
Claims – NPLs
The HCC approved28 the acquisition of claims and NPL manager Eurobank FPS SA by the Italian company doValue S.p.A., without identifying competition concerns. It should be noted that this concentration is one of many that are expected in the context of the generalised trend of the transfer of the management of loan and NPL portfolios (or the transfer of the portfolios themselves) by the Greek systemic banks to third-party companies and institutions.
Cold cuts – processed meat
After a long time in distress and shareholder disputes, the Greek company CRETA FARM, active in the market of processed meat and cold cuts was acquired by the Bulgarian Bella Bulgaria AD through its Greek subsidiary Impala Hellas. The relevant acquisition was cleared by the HCC without any competition concerns.
The HCC unconditionally approved the acquisition of Alpha Agricultural Products by Adama Agriculture BV, a company active in the supply and distribution of agrochemical products.29
The HCC approved the acquisition of Skroutz SA, owner of the very popular Skroutz online comparative marketplace platform, by the fund CVC through its indirect subsidiary SAIGA S.a.r.l.30
The HCC approved the acquisition of certain assets and liabilities of Sidiremporiki Makedonias SA by BITROS Metallourgiki AEBE; a concentration which concerns the market for the processing and marketing of steel products.31
By virtue of decision No. 718/2020, the HCC approved the acquisition of joint control over certain assets and liabilities of Euromedica SA, owner of certain clinic and private healthcare units, by FARALLON Capital LLC and Piraeus Bank SA without identifying any competition concerns.
The new structure of the HCC has generally been successful by being more efficient and expeditious, demonstrating a better knowledge of the competition conditions and taking advantage of its interaction with the Directorate General of the European Commission. It can be seen that the refinements introduced by the new competition law are gradually improving the overall operation of the HCC. It now remains to be seen how the new Directive 2019/1 will be transposed into Greek law and whether it will contribute even more to the efficiency of the HCC's operation.
1 Emmanuel Dryllerakis and Cleomenis Yannikas are senior partners at Dryllerakis & Associates.
2 The Competition Act (Law 3959/2011).
3 HCC decision No. 525/VI/2011.
4 HCC decision No. 616/2015.
5 Article 25, Paragraph 2(a) of Law 3959/2011.
6 HCC decision No. 526/VI/2011.
7 HCC decision No. 408/V/2008 regarding bank interchange fees (DIAS system).
8 See, e.g., HCC decision No. 538/VII/2012 of the HCC (regarding pay-TV platform NOVA).
9 HCC decision No. 642/2017.
10 HCC decision No. 703/2020.
11 HCC decision No. 721/2020.
12 HCC decision No. 715/2020.
13 HCC Press Release of 25 November 2020.
14 Press Release of 30 December 2020.
15 HCC decision No. 687/2019.
16 Press Release of 21 December 2020.
17 Press Release of 7 August 2020.
18 Press Release of 6 November 2020.
19 Press Release of 8 January 2021.
20 Press Release of 14 January 2021.
21 See also the Opinion of the HCC on press distribution in Greece dated 14 January 2020.
22 HCC decision No. 701/2020.
23 HCC decision No. 713/2020.
24 HCC decision No. 665/2018.
25 HCC decision No. 702/2020.
26 HCC decision No. 705/2020.
27 HCC decision No. 707/2020.
28 HCC decision No. 709/2020
29 HCC decision No. 712/2020.
30 HCC decision No. 714/2020.
31 HCC decision No. 716/2020.