The Chairman of the Office Confirmed the Decision on Anti-competitive Conduct of the Undertaking GARLAND

2022-10-24
The Chairman of the Office for the Protection of Competition (hereinafter referred to as "the Office"), Petr Mlsna, rejected the appeal of the undertaking GARLAND distributor, s.r.o., (hereinafter referred to as "GARLAND") against the first instance decision according to which the undertaking had entered into illegal vertical agreements on resale price fixing with its customers. However, the Chairman of the Office slightly reduced the fine imposed to a final amount of CZK 95 461 000.

"By its conduct, GARLAND intentionally suppressed competition at the horizontal level between retailers selling its goods. They were therefore prevented from offering those goods to end consumers at prices lower than those set by GARLAND, “the Chairman Petr Mlsna said regarding this case.

The Chairman of the Office decided that the undertaking GARLAND had committed an infringement of the Competition Act by concluding and implementing prohibited agreements with its customers on direct fixing of minimum resale prices in the period from at least 18 June 2013 to 30 May 2019, i.e. for almost 6 years. The aim of these agreements was to exclude competition between GARLAND's distributors in the markets for garden technology, garden equipment and tools for home (hobby) use in the Czech Republic.

GARLAND itself initiated the conclusion of price agreements, insisted on their compliance and enforced them under the threat of sanctions, which consisted, for example, by blocking the customer's account in the ordering system. The enforcement of the price agreements by GARLAND also led customers to checking the non-compliance of other customers (their competitors) with the set retail prices and asking GARLAND for remedies, i.e. for ensuring unified (higher) retail prices.

The Office prohibited the performance of these agreements and, in addition to the fine, ordered GARLAND to inform all its customers of the prohibition and invalidity of the agreements.

In the appeal proceedings, the Chairman of the Office rejected the vast majority of the objections raised by the party to the proceedings concerning, for example, the existence of the infringement; the evidence that vertical agreements were concluded; the definition of the relevant market and the market share of the party; the application of the institute of continuation of the infringement or the excessive amount of the fine. He only accepted the objection relating to the incorrect temporal definition of the infringement, stating that the last proven partial attack had already occurred on 30 May 2019 and there was nothing further in the file to indicate that it had lasted until the date of the opening of the administrative proceedings, i.e. 6 June 2019. In view of this modification of the length of the infringement, the Chairman of the Office reduced the fine from the original CZK 96,751,000 to a final amount of CZK 95,461,000.

Press Unit of the Office for the Protection of Competition
22/152 – R0003/2022

 

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