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11 September 2014
Slovenian media company Pro Plus witnessed the Competition Protection Agency's tough approach in early 2014, when it was fined for investigation obstruction (for further details please see "Dawn raids: how far does the duty to cooperate go?"). According to media reports, and as confirmed by the company, Pro Plus has now been fined almost 10% of its 2013 annual turnover for dominant position abuse in the television advertisement market.
In accordance with the Protection of Restrictions of Competition Act, the agency may impose a fine of up to 10% of a company's annual turnover for infringements of Article 9 of the Competition Act and Article 102 of the Treaty on the Functioning of the European Union, which similarly prohibits abuses of dominant position.
Unlike the European Commission – whose fining policy is defined in its 2006 Fining Guidelines (guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of EU Regulation 1/2003) – the agency has issued no such document and is limited to applicable criminal law as, by their nature, Competition Act infringements constitute minor offences.
The Minor Offences Act states that all mitigating and aggravating circumstances must be considered when a fine is imposed, including:
However, it gives no further details.
Apart from the above-mentioned general principles, no guidance on how a fine should be calculated exists. Therefore, the agency is free to impose a fine of between 1% and 10% of the implicated undertaking's annual turnover, which gives the agency far too much leeway and has caused much legal uncertainty.
The agency's website reveals only one decision imposing a (minor offence) fine in a dominance abuse case, which means that companies cannot rely on the agency's decisional practice to determine the criteria that will be considered in case of a potential minor offence proceeding for dominance abuse.
In order to improve legal certainty, the agency would need to issue a statement or piece of secondary legislation with respect to its fine determination process. For example, the European Commission's 2006 Fining Guidelines could be used as a basis to elaborate on the principles established within the Minor Offences Act.
The agency must also begin regularly publishing its administrative and minor offence decisions. Only by doing so will the agency enable companies and practitioners to get much-needed insight into its decision-making and fine determination process.
For further information on this topic please contact Eva Škufca at Schoenherr by telephone (+386 1 2000 980 or +32 2 743 4040), fax (+386 1 4260 711) or email (email@example.com). The Schoenherr website can be accessed at www.schoenherr.eu.
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