Council of AMO SR upheld a more than one million fine imposed on undertaking CHEMES, a.s. Humenné for abusing a dominant position

At the same time, the undertaking was ordered to refrain from the given behaviour and to eliminate the illegal situation.

The Council of the Antimonopoly Office of the Slovak Republic by a decision of No. 2022/DOZ/POK/R/51 dated 19/12/2022 upheld the first-instance decision of the Antimonopoly Office of the Slovak Republic, the Division of Abuse of Dominant Position and Vertical Agreements, of No. 2021/DOZ/POK/2/52 dated 29/09/2021 and dismissed the appeal of a participant to the proceeding CHEMES, a.s. Humenné (hereafter "CHEMES").

In the administrative proceeding, the abuse of dominant position of the undertaking CHEMES was assessed, and it was grounded on the fact that during the period from 01/08/2017 to the date of the first-instance decision issuance, i. e. till 29/09/2021 it was obliging companies, which were doing business activity in an industrial park Chemes, to purchase compressed air, cold, nitrogen, gas and electricity from it, and at the same time it was preventing them from producing these goods themselves or purchasing them from third parties. The undertaking CHEMES is the only supplier on several relevant markets defined by the Office, i. e. it is not exposed to competitive pressure and can thus behave independently of other entities, including its customers. Since some customers, which are primarily large manufacturing companies, cannot relocate their business activity from the industrial park Chemes to another in a reasonable time without significant financial costs, their economic attachment to the undertaking CHEMES occurs, which allows it to use its economic power even where a competitive environment could have existed. The customers of CHEMES could have secured an alternative source in the case of electricity, gas, cold, compressed air and nitrogen, as the supply markets for these energies have the potential to be competitive markets, but precisely as the result of the application of unreasonable business conditions by the undertaking CHEMES, it is also the only possible energy supplier in these markets.

The behaviour stated above represents the direct or indirect application of unreasonable business conditions and is the abuse of dominant position according to the Article 102 Letter a) of the Treaty on the Functioning of the European Union and the abuse of dominant position according to the Article 5 Paragraph 3 Letter a) of the Act No. 187/2021 Coll. on Protection of Competition and on Amendments to Certain Acts (hereafter "the Act on the Protection of Competition") on the market for the operation of the industrial park Chemes and on the markets for heat production and distribution, condensate collection, electricity distribution, production and supply of demineralized water, production and supply of decarbonized water, production and supply of softened water, supply of drinking water, waste water removal and gas distribution, which according to the Article 102 of the Treaty on the Functioning of the European Union and according to the Article 5 Paragraph 1 of the Act on the Protection of Competition is prohibited.

At the same time, on the undertaking CHEMES were imposed the obligation to refrain from the given behaviour and to eliminate the illegal situation within 90 days from the date of entry into force of the decision and also a fine in the amount of EUR 1 181 849.

The decision came into force and became enforceable on 27 December 2022.

The party to the proceeding may seek the review of the decision by a court.