Tlačová agentúra SR – approval of the conclusion of a contract being tied to unrelated obligations
During the reported period, the Office assessed and decided on proceedings regarding the Tlačová agentúra SR [News Agency of the Slovak Republic] (hereinafter referred to as "TA SR"), which centered on the refusal to provide a price offer and conditions for the purchase of news and the approval of the conclusion of a contract being tied to the purchase conditions and other unrelated services. When analyzing the combination of the supply and demand for news services, the Office also examined the conditions under which TA SR was operating on the market of domestic, international, economic, sports, video, and TOP news programs provided in the Slovak language within the territory of the Slovak Republic and arrived at the conclusions set forth below.
The Office stated that an important competitive advantage possessed by the company was the fact that the company received funds from a special chapter of the state budget. The reason for this situation is that this company is required by law to carry the full wording of statements made by ministries and central bodies of state administration and report on standpoints of the individual state administration bodies, the government, and the president, as well as on Parliament's sessions and so forth. Funds allocated by the state on an annual basis enable the company to cover any losses incurred in connection with its business activities to which the aforementioned legal obligation does not apply. The aforementioned system of additional financing of the enterprise TA SR eliminates the risk of economic problems for this company and does not pressure it to carry out effective and natural business activities on the market precisely because state funds are used for activities that are not related to the tasks assigned to this company by law. The absence of separate accounts and records of actual expenses related to the mandatory provision of certain news as required by law enables the company to cover its commercial activities by state funds. This "softer" environment established for the enterprise TA SR deforms and distorts the competitive environment and creates room and conditions for this enterprise to act independently with respect to its competitors and third parties.
In this particular case, SITA, a private competing company operating in the markets of domestic, economic and sports news, requested a price offer and conditions for the purchase of the news service in order to supplement its news service with information that the company was unable to obtain from other sources, because it was exclusively offered by enterprise TA SR, which was rejected because the customer was a competing company. The Office confirmed that the SITA company had the indisputable right to this information, being not only a regular customer of news services of the TA SR company on other markets, but also an enterprise on the markets where its direct competitor was operating.
Among other things, the obligation of the enterprise TA SR to ensure and supply verbal and video news to legal entities in the Slovak Republic also resulted from a special law. The fulfillment of this obligation was covered by funds from the state budget, which was the reason why these funds were provided to the dominant player.
Another practice of the aforementioned company consisted of tying the customer's approval of the conclusion of an agreement on the supply, purchase and use of domestic, video, and TOP news to the condition that the other party would also purchase other services, namely other separate types of news services, such as sports, international, and economic news, with respect to which the tied purchase was not justified and, moreover, the private company SITA also operated on the markets of the provision of sports and economic news. The Office arrived at the conclusion that the individual types of news services should be provided separately, while their provision in the so-called packages was only justified as a reaction to demand generated on the basis the customers' interest, needs, and requirements. In this case, the Office came to the conclusion that the aforementioned tying of services eliminated the customers' possibilities to switch over to another competing company and this conduct led to the deformation of competition. The Office described both practices as restrictive practices on the part of the enterprise TA SR, having the character of abuse of a dominant position on the market, which is prohibited by law.