Prioritisation Policy of the Antimonopoly Office of the Slovak Republic
The Antimonopoly Office of the Slovak Republic (hereafter also "the Office") is an independent central body of state administration of the Slovak Republic, the task of which is to protect competition and coordinate state aid. The Office intervenes in the cases of cartels, abuse of a dominant position, vertical agreements, it controls mergers that meet notification criteria and assesses the actions of state administration and self-government bodies in the event that by their conduct they restrict competition. It also ensures the protection of competition in the field of state aid. In addition to Slovak law, the Antimonopoly Office of the Slovak Republic also applies the competition law of the European Union. Within the European Competition Network (ECN), it fulfills the tasks that result from the membership of the SR in the European Union.
The Office's competences in the field of antitrust and mergers follow from the Act No. 136/2001 Coll. on Protection of Competition and on Amendments and Supplements to Act of the Slovak National Council No. 347/1990 Coll. on Organisation of Ministries and Other Central Bodies of State Administration of the Slovak Republic as amended as amended (hereafter "the Act on Protection of Competition").
Within its powers, the Antimonopoly Office of the Slovak Republic conducts mainly investigations on a relevant market, in administrative proceedings it decides on the infringements of the Act on Protection of Competition in the matter of agreements restricting competition, abuse of dominant position and restriction of competition by state-administration and local-administratiopn bodies (the Article 39 of the Act on Protection of Competition), performs a control over mergers and at the same time it proposes measures to protect and promote competition.
As all competition authorities in the world, including the European Commission, also the Office strives to use its resources as efficiently as possible in order to focus on addressing meaningful competition issues, which have a significant impact on markets, consumers and economic sectors concerned.
The legislative framework of competition protection has the potential to be significantly affected by the Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market. According to that provision, national competition authorities should be able to set priorities between their proceedings for enforcing the Articles 101 and 102 of the Treaty on the Functioning of the European Union. The aim should be to use resources efficiently and to focus on preventing and eliminating anti-competitive behaviour, which restricts competition in the internal market and on terminating such a behaviour. For this purpose they should be able to reject complaints on the grounds that they are not a priority at the time.
The Office fulfills the following main objectives in the field of competition protection:
- enforcing competition law in its national as well as international dimension, with the application of a regularly reviewed prioritization policy,
- active contributing to the development of legislative and legal framework of competition protection in the SR in coordination with competent European institutions promoting competition protection in the context of cooperation between the Member States of the European Union,
- raising the awareness of competition law and the economic and social consequences of its violation and intensifying communication with the representatives of undertakings, associations and the associations of undertakings,
- developing cooperation with other central state administration bodies in building:
- an effective system for the detection and the administrative punishment of infringements of competition law,
- a business environment stimulating competition,
- initiating and developing cooperation with renowned Slovak universities and institutions focusing on the legal and economic aspects of competition protection.
The enforcement of competition law is realized primarily through a decision-making activity, in which the Office directly intervenes in the individual cases of competition infringements, resp. decides on mergers. Another, but no less important form of the Office's competence is a competition advocacy aimed at prevention in the field of competition protection and raising the awareness of it among the professional and lay public. The Office´s competences are specified in more detail by the Article 22 of the Act on Protection of Competition.
Administrative proceedings, with the exception of merger assessment proceedings, are initiated by the Office on its own initiative. The current legislation creates room for the Office to assess first whether a certain conduct of an undertaking, resp. the complaint is of such a character that it requires the Office´s intervention, and in the next step whether the intervention should be in the form of initiating an administrative proceedings, i. e. usually the most demanding form by time and capacity or it is possible to solve the matter otherwise, e. g. competition advocacy.
In order to fulfill its tasks for the benefit of consumers, it is necessary for the Office to set priorities for its activity, both in long term and in short term. Some competition authorities implement their prioritization policy on the basis of law, others have adopted it in the form of documents that are not legally binding.
The Office has already been applying the prioritization in its practice. The aim of this document is also to evaluate the priorities set in previous periods, the criteria applied, as well as the method of their application.
General rules for the application of the Office's prioritisation policy
1. Where does the Office prioritize?
By applying the prioritization correctly, the Office should spend its human, technical and budgetary resources and capacities efficiently so that the intervention it chooses in an assessed case was effective, economical and properly targeted. It is therefore essential that the Office always thoroughly gets acquainted with all the facts and the circumstances of the assessed case.
From the point of view of activities performed, the Office applies the prioritization in:
- the Office´s decision-making activities, including the control over the complying with the Office´s decisions,
- market investigations and survey and the preparation of sector studies,
- activities in the field of competition advocacy, including trainings in the field of competition, issuing guidelines and methodological guidelines.
2. Why does the Office prioritize?The source for the Office´s activities is the relevant budget chapter of the Office within the state budget. As its activities are provided from public resources, the Office must responsibly approach the redistribution of its personnel, technical and financial resources. The aim is to allocate them to activities that will ensure an intervention in those cases, where the most significant restrictions of competition occur, with all the associated consequences for market participants.
3. How does the Office prioritize?Prioritization is based on regularly updated prioritization criteria, the aim of which is to establish an efficient and transparent procedure for the selection and the evaluation of cases, in which the Office will apply the prioritization.
At the same time, the Office monitors also the prioritization policy of other competition authorities in the Member States of the European Union, including the prioritization policy of the European Commission. Similarly set and applied prioritization of the Office and other competition authorities will enable their better cooperation and the use of common resources, whether, for example, in monitoring a particular sector of the economy, or in exchanging information and documentation, or sharing capacities.
Prioritization criteriaThe evaluation of a case as a priority with the conclusion that the Office will deal with the matter, respectively it will continue to resolve the matter, is based in particular on the following principal criteria:
1. GravityIn terms of gravity, the Office distinguishes cases according to type gravity into:
- very serious offences, namely: horizontal agreements on prices, market allocation or the restriction of production, bid rigging, agreeements on prices for further resale, the abuse of a dominant position in particular of an exclusion character, the implementation of a merger that would be probably prohibited without previous merger notification to the Office or the implementation of a merger which is inconsistent with a legally binding decision issued by the Office, the failure to comply with the conditions of a merger imposed by the Office;
- serious offences, namely: the abuse of a dominant position of an exploitative nature, horizontal agreements other than those mentioned in the previous paragraph, for instance a commitment by the parties to the agreement on different conditions related to an identical or comparable performance that will be applied to individual undertakings, which will or may disadvantage these undertakings in competition, or conditions stipulating that the conclusion of contracts will require the parties to accept further commitments that are not related to the subject of these contracts in terms of their nature or according to customary commercial practices, vertical agreements containing the so called hard-core restrictions (e. g. agreements on market allocation), the implementation of a merger, which would probably not be prohibited without a merger notification; the restriction of competition by local self-administration authorities during the performance of self-administration and transferred performance of state administration and special interest bodies during the transferred performance of state administration (hereafter „the Article 39“) of a greater importance;
- less serious offences, namely: vertical agreements not containing the so called hard-core restrictions, competition restriction under the Article 39 of a minor importance and other less serious competition distortions.
An equally important aspect in the assessment of the gravity is also a factual gravity, where the Office assesses:
- the nature of impact of competition infringement, with priority cases being those, which are expected to have an actual or unavoidable impact on a market,
- the geographical extent of area affected by the practice,
- the duration of offence and the duration of infringement,
- the number of consumers affected,
- the impact on disadvantaged and vulnerable consumers, for example in cases of limited market access,
- direct or indirect impact on a consumer, whereby the indirect impact may represent the loss of a consumer and business confidence in the proper functioning of markets,
- the type of a product, where, in terms of cases, the Office may prioritize, for example, everyday consumer products over luxury products,
- the undertaking's share on a relevant market,
- recidivism consisting of the repetition of anti-competitive conduct of the same factual nature,
- the abuse of an emergency situation in relation to the spread of COVID-19, namely by abusing a dominant position or by concluding a prohibited agreement restricting competition with an impact (including also potential) on consumers or other market participants.
2. Importance of a market investigatedThe market affected by an anti-competitive practice is another factor taken into account while evaluating priority cases and in which the Office examines:
- the nature of an industry, while the priority of a case has been increasing in recently liberalized and network industries or in markets, where the Office has repeatedly detected the negative development of competition intensity, structure changes threatening a competition, the high degree of a merger or existing barriers to entry on such markets,
- the probable total amount of a damage caused to by affected market participants, if it is possible to identify or estimate such a damage in a given case,
- the existence of actions brought in private law disputes for damages in connection with the anti-competitive conduct of defendant undertakings.
3. Probability of a successThe Office often learns of the infringements of the Act on Protection of Competition only over some time, namely on the basis of complaints or its own sector inquiries. The evidence showing such infringements are kept secret by the infringers, stored at hard-to-reach accessible places, technically and physically, and, in the event of fear of detection of their anti-competitive behaviour they may destroy such an evidence. It comes out that when setting priorities it is necessary that the Office takes into account also:
- the availability of relevant information and evidence, resp. the possibility of securing them by the Office,
- the existing decision-making practice of courts in the matter of standard of evidence and the sufficiency of documentation obtained by the Office for the issuance of a decision.
- in terms of the Office´s current aims and visions in the given period,
- in terms of the need to build the credibility of the Office in relation to the public, or due to strengthening competition enforcement rules, or
- it is a precedent case that can prevent the infringements of competition rules in the future due to its deterrent or educational effect, and thus it may be important also as an "interpretative rule" in the case of a newly adopted legislation amendment.
Office´s interventionAs a part of evaluating a priority, it is necessary to consider the method of subsequent solution of identified competition problems, and thus to consider whether a certain competition problem should be solved by an administrative proceedings or a competition advocacy. Likewise, the Office will consider the degree of the need for general prevention with regard to the effect of its anticipated pro-competition intervention in the interest of a remedy of a widerly occuring competition problems.
The above-mentioned assessment is performed by the Office on the basis of the following criteria:
- the effectiveness of way of solution,
- the causes of competition problem with the evaluation of whether the competition problem is the result of systemic errors in a sector (regulation setting, legal regulation, etc.) or of individual anti-competitive behaviour of selected undertakings,
- the frequency of occurance of competition problems in a particular sector or a field.
Short-term prioritiesIn addition to the long-term principles of prioritization, the Office also sets short-term priorities for a period of approximately two or three years, both in terms of practices and sectors. This does not mean that the Office will not intervene also in the cases of detection of other practices, respectively in other sectors of the economy.
In terms of practices, the Office considers the following to be a priority:
- cartels: cartel agreements between undertakings are ranked among the most serious infringements of competition rules, which bring benefit exclusively to their participants, while, according to OECD studies, they can cause the increase of prices by up to 50 % and their importance increases in cases, when there comes to areal market partitioning and an agreement on the prices of goods and services, resp. on other conditions between the substantial part of market participants in the form of long-term schemes,
- bid rigging in public procurement: the practice of bid rigging is particularly harmful in a public procurement process, as it undoubtedly has a detrimental effect on public funds spending efficiency and, as the most of anti-competitive practices, it can have a lot of forms, and thus it can be indicated by a large number of observable external expressions1,
- unnotified mergers: the Office monitors the economic combining of undertakings resulting in the lasting change of control and thus also market structure, while some unnotified mergers may pose the significant risk of irreparable damages to merger-affected markets, which the Office seeks to prevent by detecting them and severely penalizing them.
- Internet sale/e-commerce and digital platforms
- automotive/the manufacture and the sale of motor vehicles
- information technologies and systems
ConclusionThe criteria contained in this document must be seen in the context of circumstances and phenomena in each individual case, with the comprehensive assessment of all economic and legal connections. In each individual case, the Office will evaluate also other additional factors that will be proved as relevant. The Office will also reconsider the published priorities on the basis of justified and practical experience. This document cannot be understood as a guide for the potential infringers of the Act on Protection of Competition while considering the risk of punishing, both intended and in practice already applied anti-competitive practices in selected sectors or situations.
With the interest to maintain and strengthen the necessary degree of transparency in the prioritization process, the Office will establish a prioritization commission. The Office seeks to exclude the possibility of existence of space of an employee, dealing with a complaint or a case, to subjectively evaluate the case and to decide based exclusively on its own discretion or the purposeful use of prioritization policy for the benefit of the entity concerned, either by stopping the assessment of a complaint received or the Office´s own initiative, resp. stopping an initiated investigation or failing to initiate an administrative proceedings in the matter. The prioritization commission will carry out an ex ante control and the evaluation of relevant facts and determine whether this is a priority or a non-priority case. In modifying the rules of assessment activities of the prioritisation commission, the Office will, among other things, come out also from the settings and the experience of competition authorities of other states.
The fact, that the Office comes to a conclusion that it will further not deal with a certain matter, does not mean that it will not deal with it in the future if it takes into account a new development or new circumstances in the given case.
- Cartel agreements in a public procurement,
- Indications of an anti-competitive behaviour in a public procurement process,
- A guideline for “bid rigging“ in a public procurement,
- A methodological guideline on the procedure for setting fines in the cases of abuse of dominant position and agreements restricting competition (points 10 and 19 in the context of other provisions).
Prioritisation Policy (pdf, 206.05 kB)