Reduced Fine for Aroma Candle Distributor, and, for the First Time, the Office Took the Compliance Program into Account

2022-09-22
The Office for the Protection of Competition (hereinafter referred to as “the Office“) imposed a fine of CZK 17,649,000 on the undertaking Z - TRADE s. r. o. for entering into prohibited agreements on direct resale price fixing. The fine was reduced by the Office because a party to the proceedings applied for a settlement. For the first time ever, when setting the amount of the fine, the Office also considered the fact that an undertaking had implemented a compliance programme. The party to the proceedings did not file an appeal and the decision has already come into force.
 
Z - TRADE s.r.o. (hereinafter referred to as “Z-TRADE”) infringed both the Czech Act on the Protection of Competition and the EU competition law by distorting competition in the supply of candles and “aroma products” of luxury brands (e.g. Yankee Candle, WoodWick and Millefiori Milano). The Office proved that Z-TRADE set fixed minimum retail prices to its customers for sales to final consumers between 20 December 2013 and 24 September 2020. It made the start and continuation of business with its customers conditional on compliance with the prices set by it, checked such compliance and personally, in writing or by telephone invited the customers to increase prices to a level set by it. It threatened sellers who wanted to sell below the set prices with sanctions in the form of termination of supply or cooperation, which it applied in several cases.
As a result of Z-TRADE's conduct, competition between individual retailers of the goods supplied by Z-TRADE was restricted. These retailers were restricted in their ability to offer customers goods at a lower price than that set by Z-TRADE. For at least seven years, the price level of the goods in question was thus increased to the detriment of the end consumer.
The party to the proceedings admitted to its illegal conduct in the settlement procedure, for which the fine was reduced by 20%. The further reduction of the fine was applied due to the fact that the Office, for the first time ever, considered the fact that the undertaking had implemented a compliance programme (a programme to prevent infringement of the law or ethical standards by employees and the undertaking as a whole).
In the future, the Office reserves the possibility to apply a certain reduction of the fine if the party to the proceedings has a properly set up and functioning compliance programme or commits to its implementation. However, only undertakings who have applied for a leniency programme or settlement and whose management was not involved in the anticompetitive conduct will be eligible for such reduction.
 
Press Unit of the Office for the Protection of Competition
22/0138 – S0365/2020
 

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