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UP/I 030-02/2008-01/072 Case: CCA Vs

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UP/I 030-02/2008-01/072 Case: CCA Vs Date of decision: 25 March 2010 Class: UP/I 030-02/2008-01/072 Case: CCA vs. daily newspaper publishers Type of case: Assessment of restrictive agreements Type of decision: Decision on prohibited agreements SUMMARY On 25 March 2010 the Croatian Competition Agency (hereinafter: CCA) brought a decision by which it closed an ex officio proceeding initiated against nine daily newspaper publishers. In this decision it was established that the following undetakings: Slobodna Dalmacija d.d., Europapress holding d.o.o., Vjesnik naklada d.o.o., Glas Slavonije d.d., Glas Istre d.o.o., Novi list d.d., Ve černji list d.d., RTD d.o.o. and Datapress d.o.o. (now under bankruptcy) on the basis of an explicit agreement and concerted practices simultaneously on 1 and 2 August 2008 increased the prices of the daily newspapers for the same amount of 1 Kuna and thereby directly fixed the retail price of the daily newspapers. Acting in this way they concluded a prohibited agreement in terms of Article 9 paragraph 1 item 1 of the Competition Act which has as its object the distortion of competition in the relevant daily press publishers market in the territory of the Republic of Croatia from 1 August 2008 to the present day. For all mentioned undertakings the restriction of competition has been established from 1 August 2008 until the present day, except for the Datapress d.o.o. where the infringement started on 2 August 2008 and continued until 2 May 2009. LEGAL AND FACTUAL FRAMEWORK The proceeding of against the undertakings Slobodna Dalmacija d.d., Europapress holding d.o.o., Vjesnik naklada d.o.o., Glas Slavonije d.d., Glas Istre d.o.o., Novi list d.d., Ve černji list d.d., RTD d.o.o., Datapress d.o.o. (under bankruptcy) and Croatian Employers Association – Association of Newspaper Publishers was instituted ex officio following the press coverage about the simultaneous price increase of the dailies. The CCA applied provisions of the Competition Act, as well as the provisions of the General Administrative Procedure Act, which regulates the administrative proceedings before the CCA in the part not regulated by the Croatian Competition Act. Furthermore, the CCA applied the Regulation on the definition of relevant market (“Official Gazette”, No 51/04; hereafter: Relevant Market Regulation) and the Regulation on block exemption granted to certain categories of horizontal agreements (between undertakings operating on the same level of production or distribution chain) (“Official Gazette”, No 158/04; hereafter: Horizontal Agreements Regulation). Pursuant to Article 35 paragraph 3 of the Competition Act the CCA also applied the criteria arising from the rules regulating competition in the European Communities, 1 namely: Commission Notice - Guidelines on the applicability of Article 81 of the EC Treaty to horizontal cooperation agreements, from 6 January 2001 (OJ C 003) and Communication from the Commission — Notice — Guidelines on the application of Article 81(3) of the Treaty from 27 April 2004. THE PARTIES Europapress holding d.o.o. Europapress holding d.o.o. is an undertaking with its seat in Zagreb entered in the Registry of Commercial Court in Zagreb and is registered for publishing and many other activities. Europapress holding d.o.o. is a publisher of the daily „Jutarnji list“. Slobodna Dalmacija d.d. Slobodna Dalmacija d.d. is an undertaking with its seat in Split, entered in the Registry of Commercial Court in Split and is registered for publishing and many other activities. Slobodna Dalmacija d.d. is a publisher of the daily „Slobodna Dalmacija“. Vjesnik-naklada d.o.o. Vjesnik naklada d.o.o. is an undertaking with its seat in Zagreb, entered in the Registry of Commercial Court in Zagreb and is registered for publishing and many other activities. Vjesnik naklada d.o.o. is a publisher of the daily „Vjesnik“. RTD d.o.o. RTD d.o.o. is an undertaking with its seat in Zadar, entered in the Registry of Commercial Court in Zadar and is registered for publishing and many other activities. RTD d.o.o. is a publisher of the daily „Zadarski list“. Glas Istre d.o.o. Glas Istre d.o.o. is an undertaking with its seat in Pula, entered in the Registry of Commercial Court in Pazin and is registered for publishing and many other activities. Glas Istre d.o.o. is a publisher of the daily „Glas Istre“. Novi list d.d. Novi list d.d. is an undertaking with its seat in Rijeka, entered in the Registry of Commercial Court in Rijeka and is registered for publishing and many other activities. Novi list d.d. is a publisher of the daily „Novi list“. 2 Glas Slavonije d.d. Glas Slavonije d.d. is an undertaking with its seat in Osijek, entered in the Registry of Commercial Court in Osijek and is registered for publishing and many other activities. Glas Slavonije d.d. is a publisher of the daily „Glas Slavonije“. Ve černji list d.d. Ve černji list d.d. is an undertaking with its seat in Zagreb, entered in the Registry of Commercial Court in Zagreb and is registered for publishing and many other activities. Ve černji list d.d. is a publisher of the daily „Ve černji list“. Datapress d.o.o . (under bankruptcy) Datapress d.o.o . (under bankruptcy) is an undertaking with its seat in Zagreb, entered in the Registry of Commercial Court in Zagreb and is registered for publishing and many other activities. Datapress d.o.o. (under bankruptcy) was a publisher of the daily „Slavonski dom“at the time of the conclusion of the prohibited agreement. Croatian Employers Association- Association of Newspaper Publishers Croatian Employers Association- Association of Newspaper Publishers is a voluntary and independent employers' association which protects and promotes the rights and interests of its members, especially as regards business terms, relations with government bodies, trade unions, businesses, labour and social authorities, collective negotiations and conclusion of collective agreements, labour disputes and other matters important for economic and social position of employers. Croatian Employers Association- Association of Newspaper Publishers has nineteen members. Seven of them are parties to the proceeding concerned: Europapress holding d.o.o., Slobodna Dalmacija d.d., Glas Istre d.o.o., Novi list d.d., Glas Slavonije d.d., Ve černji list d.d. and Datapress d.o.o. (under bankruptcy). Although the proceeding was also initiated against the Croatian Employers Association- Association of Newspaper Publishers because of the announcements in the media about the simultaneous price increase of the dailies made by the president of the Croatian Employers Association- Association of Newspaper Publishers, it has been established in the proceeding that the association concerned does not fulfil the criteria under the Article 3 of the Competition Act i.e. cannot be considered an undertakings given that it does not participate in and in the trade of goods and services and does not perform an economic activity. RELEVANT MARKET The CCA defined the relevant market according to Article 7 of the Competition Act and Articles 5 and 6 of the Regulation on the definition of relevant market. 3 According to Article 4 of the Regulation on the definition of relevant market, the definition of relevant market shall be considered as identifying its production (relevant product market) and geographic dimension (relevant geographic market). In the proceedings CCA has taken into account the specific nature of the daily newspapers market. Such a market is also called a two-sided market. One side is the daily press publishers’ market and the other side is the daily press advertising. Although the agreement between the undertakings concerned primarily produces effects in the relevant daily press publishers’ market in the territory of the Republic of Croatia, for the purpose of the analysis, the CCA has taken into account both sides of the market, including the daily newspapers advertising as a significant source of revenue for the publishers. The relevant geographic market is the territory of the Republic of Croatia. PROCEDURAL ASPECTS In the course of the administrative proceeding, the CCA collected data from the parties to the proceeding and other participants in the relevant market. In the course of the proceeding the parties were able to submit written statements to the CCA. At the end of the proceeding the right to be heard was conferred to the parties in the oral hearing. After the oral hearing was held and a comprehensive economic and legal analysis carried out the CCA closed the proceeding and took its decision. COMPETITION ANALYSIS In the present proceedings it has been undoubtedly established that nine daily press publishers (only Datapress d.o.o. increased the price on 2August 2008, all others on 1 August 2008) simultaneously increased the retail price of their daily papers by one Kuna regardless of their actual revenues and structure of costs, which supports the conclusion that daily press publishers concluded a prohibited agreement. The economic analyses proved that the participants of the cartel have significantly different cost structure and source of revenue whereby the price increase on the same day and for the same amount of 1 Kuna is in no way economically justified. In addition, the other fact which supports the conclusion that the daily press publishers concluded a prohibited agreement is that all publishers did it after the announcements of a price increase had been made in the media by the president of the Croatian Employers Association- Association of newspaper publishers. Furthermore, the CCA requested the minutes from the meeting of the mentioned Association from 1 January until 1 August 2008 but the Association failed to provide the minutes from the meeting which was held on 4 July 2008.
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