Subject: ITRE>Petition 0338/2012 by Georgios Floras (Greek), on the Hellenic Competition Commission’s alleged breach of EU competition law>
1. Summary of petition
The petitioner outlines the way in which the Hellenic Competition Commission (HCC) and Directorate-General for Competition (DGC) handle cases of cartelisation. The petitioner claims that the Directorate-General for Competition (DGC) is accepting letters which are hostile in nature and which have been exchanged between the relevant companies as appropriate evidence indicating that these companies are in competition with one another and consequently cannot be members of a cartel. On this basis, the Hellenic Competition Commission (HCC) is discontinuing proceedings against these companies which normally would have been indicted for operating an illegal cartel. The petitioner draws attention to the fact that the same circumstances applied in the case on cartel activity in the Greek foreign-language book market, which also concerned his bookshop. The petitioner therefore asks the European Parliament to intervene in this case.
Declared admissible on 4 July 2012. Information requested from Commission under Rule 202(6).
3. Commission reply, received on 18 December 2012
According to the petitioner, a member of an alleged cartel will not be further investigated by the Greek Competition Authority if it can bring new evidence in the form of correspondence showing disagreement with other alleged cartelist(s). In support of this, the petitioner makes reference to a case decided by the Greek Competition Authority (see below) and states that this sets an unfortunate precedent, whereby alleged cartelists get away with serious offences.
The Commission has previously replied to the now closed petition 130/2007 from the same petitioner, which also concerned an investigation of the Greek Competition Authority into the wholesale and distribution of foreign language educational books in Greece.
The petitioner, in substantiation of his petition, refers exclusively to one case where he had made an official complaint to the Greek Competition Authority. It should be noted that the Greek Competition Authority consists of two separate bodies: the Directorate General, which is the body responsible for investigations, and the Board, which is the decision-making body. Following its investigation, the Directorate General issues a report, which contains preliminary findings (the equivalent of a Statement of Objections in European Commission proceedings), and is not binding on the Board. An oral hearing subsequently takes place before the Board, which then takes a decision.
The petitioner, who is a retailer of foreign language educational books, alleged in his complaint of 2003 that Apollon S.A., a wholesaler of foreign language educational books, had abused its dominant position in the relevant market by imposing unfair commercial terms on its downstream competitors.
This complaint gave rise to an investigation by the Directorate General of the Greek Competition Authority which was extended to other undertakings active in the relevant wholesale market for foreign language education books, including Efstathiadis Group S.A., which held the second largest market share in the relevant market after Apollon S.A.
Report No 4776/2006 of the Directorate General of the Greek Competition Authority, issued on 27 July 2006, suggested the existence of a concerted practice between Apollon S.A. and Efstathiadis group S.A. with the aim of restricting competition in the relevant market. Furthermore, it was considered that although neither of these two undertakings independently held a dominant position on the relevant market, they collectively held a dominant position – given their high combined market share (on average 25% for Apollon S.A and 19% for Efstathiadis Group S.A.) and the prevailing competitive conditions in the specific markets – which they were considered to have abused.
A new report was subsequently issued (Report No 2343/2008 of 7 April 2008). This report suggested that in view of newly acquired evidence (namely correspondence between Apollon S.A. and Efstathiadis group S.A. for the timeframe in question, as well as factual information about their respective market shares in the years 20032006) that contradicted and outweighed prior evidence), the existence of a concerted practice between the two undertakings could no longer be factually supported to the requisite legal standard. However, the Directorate General continued to maintain its position that there had been an abuse of the collective dominant position of the two biggest undertakings on the market and that this was further supported by newly acquired evidence.
The Board of the Competition Authority subsequently adopted Decision No 452/V/2009, finding that Apollon S.A. and Efstathiadis group S.A. had collectively abused their dominant position in the relevant market contrary to EU and national competition law, and imposed total fines of EUR 4 880 921.52.
Apollon S.A and Efstathiadis group S.A. launched an appeal against Decision No 452/V/2009, but the Athens Administrative Court of Appeals rejected both appeals in judgments No 1473/2011 and 2395/2011, thereby affirming the Competition Authority's decision in its entirety. The petitioner did not exercise his right to appeal Decision No 452/V/2009.
A number of other judicial proceedings, which are linked to the decision of the Competition Authority in this case, have been brought by the petitioner.
In 2008, the petitioner filed a damages action against the Competition Authority before the Athens Administrative Court of First Instance claiming to have sustained pecuniary and non-pecuniary damage resulting from the delay in the proceedings before the Competition Authority (requesting approximately EUR 2 208 000) and the fact that the claim he had made in his complaint to the Competition Authority (abuse of dominant position exclusively by Apollon S.A.) was not per se upheld by the Competition Authority in its final decision. In its judgment (No 19851/2010), the Athens Administrative Court of First Instance rejected the action. Subsequently, in August 2010, the petitioner launched a second damages action against the Competition Authority (requesting approximately EUR 1.6 million in compensation) for the delay in the proceedings before the Competition Authority. This action is still pending. In the same proceedings, the petitioner filed for interim measures against the Competition Authority requesting an interim award of EUR 300 000, which was rejected by judgment No 5556/2010 of the Athens Administrative Court of First Instance. He then pursued a second interim measures action against the Competition Authority for an interim award of EUR 500 000, which was rejected by judgment No 4838/2011 of the Athens Administrative Court of First Instance.
The Prosecuting Attorney of First Instance rejected (by Decision No 436/2011) the petitioner's complaint filed before the Court on 5 April 2011 against the President of the Competition Authority and members of the Directorate General's case team for criminal misconduct concerning the handling of the above-mentioned competition proceedings, and in particular, alleged willful misconduct behind the withdrawal of the allegation of the existence of a concerted practice in the Directorate General's updated Report No 2343/2008. The Prosecuting Attorney found that, due to the newly adduced evidence, the entire scope of the case had been reassessed and the prerequisites for the finding of a concerted practice were no longer fulfilled. Thus, it was perfectly lawful for the Directorate General to amend its previous Report, which was no longer consistent with the facts of the case. The Prosecutor concluded that there had been no misconduct by members of the Competition Authority with regard to any part of the latter's decision.
Subsequently, the petitioner filed an appeal against the Prosecuting Attorney’s decision, which was rejected by the Prosecuting Attorney of Appeals (decision No 603/2011).
In addition, the petitioner filed a libel action against the members of the Competition Authority who testified during the criminal proceedings, which was also rejected at first instance (an appeal is still pending).
The petitioner was broadly successful in the case at issue, given that his complaint resulted in the two largest market players being found to have collectively abused their market position and being fined a total of EUR 4 880 921.52. Indeed, the investigation of the Competition Authority went further than his complaint, which only accused the largest market player of having abused its dominant position, and extended to examining also a concerted practice between Apollon S.A. and Efstathiadis group S.A.
In terms of the suggestion of the existence of a concerted practice between Apollon S.A. and Efstathiadis group S.A., which was included in the initial Report No 4776/2006 (in an extension of the allegations made by the petitioner) and was dropped in the subsequent Report No 2343/2008, it is the responsibility of all competition authorities to weigh the evidence at their disposal in order to pursue a specific investigation. Competition cases typically require extensive and complex analysis in order to reach a well-informed decision that meets the requisite standard of proof for finding an infringement and can stand up in courts. If a competition authority concludes that there is insufficient evidence to meet the standard of proof, it is reasonable and proper that the investigation be closed. The Commission encourages national competition authorities to set their priorities so that they focus their scarce resources on the most serious infringements of competition law, and discard at an early stage cases in which it appears likely that an infringement cannot be found. It is a welcome development that the Greek Competition Authority has been given the right to set its priorities by virtue of Law 3959/2011 on the Protection of Free Competition.
Finally, due process with regard to decisions of the Greek Competition Authority is ensured through the possibilities which exist for legal redress under national law. These have been exhaustively pursued by the companies which were fined for their anti-competitive conduct, as well as by the petitioner who has pursued, and continues to pursue, multiple legal actions.
It would be useful to pass this information to the petitioner, bearing in mind however that, against this background, it is not up to the Commission to intervene in this particular case.
4. Commission reply (REV), received on 28 February 2014
The Petitioner made a complaint to the Greek Competition Authority (HCC) in 2001. He alleged that Apollon SA (Apollon), a wholesaler of foreign language educational books, was abusing its dominant position on the wholesale market for the trading and distribution of foreign language educational books. Further to the complaint, the HCC investigated additional aspects and issued objections to cover: (1) an alleged abuse by Apollon and another company, Efstathiadis Group SA (Efstathiadis), held to be collectively dominant; (2) an alleged concerted practice by the same two companies; and (3) alleged vertical restraints, namely exclusive distribution agreements concluded by Apollon and Efstathiadis with publishing companies Burlington, Pearson, Hillside and Boukouvalas.
As a result of these proceedings, the HCC found that Apollon and Efstathiadis were collectively dominant and guilty of an abuse (Decision no. 452/V/2009; point (1) above)). Total fines in the order of nearly €5 million were imposed. The vertical elements (point (3) above) were split off into separate proceedings and resulted in a separate decision finding an infringement with total fines imposed of approximately €6 621 million (Decision no. 455/V/2009). These decisions were upheld by the competent review courts and have become final.
The Petition takes objection to the fact that the allegations of a concerted practice that the NCA had included in a first statement of objections (point 2 above) were dropped. The Petitioner notably submits that the HCC would have too lightly accepted elements put forward by the parties as exculpatory evidence. He suspects that the documentation in question might have been fabricated. Based on this aspect of the case, the Petitioner formulates a concern that the NCA might be too lenient in accepting exculpatory evidence more widely and/or that this sets an unfortunate precedent, whereby alleged cartelists get away with serious offences.
The Commission has made comments on this Petition on 12 December 2012 and at the meeting of the Petitions Committee on 5 December 2013. Reference is made to these comments.
The Commission's observations
The allegations made in the Petition are solely about one decision of the HCC, which was upheld by the Greek Courts as being well-founded. The Petitioner was a successful complainant as his complaint led to an investigation that ended with decisions of the HCC finding infringements of competition law and imposing fines. The target of the initial complaint, Apollon – together with Efstathiadis – was held to be collectively dominant and guilty of an abuse. The Petitioner takes objection to the fact that additional allegations of a concerted practice between the same parties were dropped and notably that the Greek NCA would have too lightly accepted elements put forward by the parties as exculpatory evidence in this context.
It is however not the role of the Commission to re-assess the evidence in proceedings before national competition authorities. That is the responsibility of the national courts. As set out in the previous Commission communication on the Petition, the Greek Courts have duly reviewed the decision referred to by the Petitioner. Moreover, the Prosecuting Attorney of First Instance, which was also seized by the Petitioner, concluded that it was lawful for the Authority to drop this aspect. An appeal brought by the Petitioner against the decision of the Prosecuting Attorney of First Instance has been rejected by the Prosecuting Attorney of Appeals.
In a broader perspective, there are no indications that the HCC takes a too lenient approach to exculpatory evidence. Competition authorities in general have the burden of proving an infringement of Article 101(1) and 102 TFEU (Article 2 of Regulation 1/2003). To this end, they have to assess the evidence before them in its totality and take a decision on whether the body of evidence at hand supports their case. If there is insufficient evidence to support a particular allegation, it is right and proper that this allegation is dropped.
The HCC has been an active enforcer of the EU competition rules for many years. Moreover, since 2009 the competition enforcement system in Greece has been enhanced, through the comprehensive revision of the Greek competition law both that year and subsequently in 2011 and the bolstering in staffing of the HCC.
The Petitioner has brought judgment 2903/2013 of the Administrative Court of Appeal of Athens to the attention of the Petitions Committee. In this judgment, the Athens Court awarded the Petitioner non-material damages of €350 000 plus interest on the grounds that the HCC's investigation into the above mentioned complaint made by the Petitioner took too long. This judgment solely concerns the length of the HCC's proceedings in this case and is currently under appeal to the Supreme Administrative Court of Greece. The Commission notes that, after the procedure in the case at hand was completed, the handling of complaints by the HCC has been significantly changed by Law 3959/2011 on the Protection of Free Competition.