CARTELS: AMO issued a decision on two cartel agreements concluded by issuers of meal and benefit vouchers.

25.02.2016
The Antimonopoly Office of the Slovak Republic issued a decision on two cartel agreements concluded by issuers of meal and benefit vouchers

CARTELS: on February 11, 2016 the Antimonopoly Office of the Slovak Republic, Division of Cartels (hereinafter only „the Office“) issued a decision by which it imposed the fine on five undertakings acting in the market of issuing, distribution and sale of meal and benefit vouchers, including providing related services in the total amount of EUR 2 962 044,00, namely for two cartel agreements.

It came out from the documents and information available to the Office that the undertakings acting in the relevant market restricted competition by committing two anticompetitive conducts:

- cartel agreement grounded in market allocation and
- cartel agreement grounded in limitation of maximum amount of meal vouchers accepted in retail chains.
During the years 2009 till 2014 the undertakings implemented common business strategy on customers (employers both in public and private sectors) grounded in:

- non-competing for competitors´ customers, namely by the fact that the aforementioned undertakings:

• did not address competitors´ customers or if they address them they applied such price offer that the competition for customer really did not happen (so-called “standard offer”),
• did not offer zero fees to competitors´ customers,
• did not offer benefits and bonuses to competitors´ customers,
• coordinated their conduct in public procurements, public tenders and similar tenders,

- application of system of so-called “balanced compensation of losses” (balance), which meant permitted acquisition of competitor´s client in case of losing own client, so as the balance between these undertakings is balanced.

The intention of implementing a common business strategy was to maintain a stable level of market shares in the relevant market.

Implemented mechanism significantly disturbed competition for customers among these undertakings and their motivation to compete. Due to implementation of common business strategy the market conditions did not result from competition, but from their cartel agreement. Undertakings were not motivated to decrease commissions (so called entry commission – commission for purchase of vouchers) to customers and thus win new customers from other undertakings concerned, since consequently they would take their customers within the system of “compensation of losses”. Finally, the cartel agreement resulted in maintenance of higher commissions applied to customers as it would be if such a mechanism among undertakings has not existed and effective competition would have been applied among them

During the years 2011 till 2014 the undertakings realized personal meetings (especially in the association uniting them) and e-mail communication with the aim to determine and install the maximum number of meal vouchers accepted by the retail chains within one purchase from a single issuer.

In the effort to limit maximum amount of meal vouchers accepted in retail chains the five undertakings acting in the given market mutually restricted themselves in concluding contracts on accepting meal vouchers with retail chains (acceptance points) following the unification of their terms of trade in these contracts. Since the negotiations with the retail chains failed the limitation has not been realized in practice.

The intention of their conduct was to increase the profitability of the output commissions (it means remuneration for the reimbursement of the nominal value of meal vouchers in cash) since issuers enforced higher commission in average relating to  restaurants than relating to retail chains, what has resulted from higher bargaining power of retail chains.

The Office assessed the conduct of undertakings as agreement restricting competition and/or concerted practices grounded in direct or indirect price fixing or other business conditions, in market allocation and collusive behaviour in public procurement, public tender or other similar tender relating to public procurement, public tender or other tender which are prohibited pursuant to the article 4 of the Act on Protection of Competition and pursuant to Article 101, par. 1 of Treaty on the Functioning of the European Union.

In this term the Office states that collusion in public procurement or in public tender is considered as one of the most serious infringement of competition rules (so-called hardcore cartels). Regarding the significant negative impacts of such agreements restricting competition the Office´s priority is to reveal the agreements and sanctions their participants.

Decision of the Antimonopoly Office is not valid. Since it is a first-instance decision which could be appealed by the undertaking concerned, the Office does not provide any details on this decision.
Last update:25.02.2016