The European Antitrust Review 2015

Slovakia: Antimonopoly Office

Andrea Wilhelmová

Member of the Antimonopoly Office of the Slovak Republic

The Antimonopoly Office of the Slovak Republic (AMO) is the central state administration body of the Slovak Republic, established for the purpose of protection and promotion of competition and its further development. The AMO’s competences result from the Act No. 136/2001 on Protection of Competition as amended (the Act). Within its competences, it intervenes in cartel cases, abuse of dominant position cases and vertical agreements; controls mergers that meet the notification criteria; and assesses actions of state and local administration authorities if they restrict competition. Besides Slovak competition law, the AMO also applies European law and it fulfils tasks resulting from the membership of the Slovak Republic in the European Union.

The AMO recently implemented a number of measures that should contribute to a more vigorous enforcement of competition policy in Slovakia. The AMO focuses on handling meaningful competition issues with significant impact on consumers intending to fulfil its role well and effectively using its resources and taxpayers’ money. In line with its priorities, it has concentrated on the most harmful anti-competitive practices: horizontal cartels and, in particular, bid-rigging cases. In order to gather relevant evidence to prove the existence of cartel agreements, unannounced inspections of the premises of undertakings have been intensified. Between January 2013 and May 2014, the AMO conducted 14 inspections at 48 undertakings. It opened five administrative proceedings and additional proceedings are in the stage of preparation. During this period, only one case has been stopped. The sectors concerned include retail, banking, informational technologies, geodesy and cartography, construction and so on.

The AMO also searches for the most effective way to solve competition concerns. Experience shows that in many cases the initiation of an administrative proceeding and imposing sanctions is not the best solution. On the contrary, alternative solutions include advocacy activities, the adoption of commitments, or settlement, which may be a faster, more effective and more beneficial remedy for consumers and competition.

As for priority sectors, the AMO recently conducted in-depth analysis in the areas of financial services, the food industry and the heating sector. These sectors are perceived to be highly sensitive from the consumers’ perspective as the possible price fluctuations affect almost all citizens of the Slovak Republic. While the first two largely reflect EU efforts too, repeat complaints in the heating sector signalled systematic deficiencies resulting from structural problems and insufficient regulation. Analysis of the heating sector was completed by issuing a sector study that focused on central heating systems (CHS) in Slovakia. The study summarises problematic features resulting in the dissatisfaction of heating consumers and, consequently, non-systematic disconnection from the system. This may negatively impact the remaining consumers and threaten the existence of potentially effective CHS systems. The aim of the study is to inform the relevant state administration authorities, local authorities and other market participants on the assessment of the situation in the sector from the view of competition policy. The study also includes a draft of measures to solve the situation and highlights the need for a broader discussion on this sector.

The AMO is continuing its analysis into potential competition concerns in the financial services and food industry sectors. Analysis into the financial sector has been partially completed, and a study on the provision of certain financial banking products to the population, small and medium-sized enterprises and local municipalities has been published. The AMO specifically investigated whether the banks tie the provision of selected types of loans with the provision of current accounts in the corresponding bank. Tying may weaken competition by increasing switching costs and reducing price transparency, which may result in reduced mobility of bank customers and increased barriers to entry for new providers of financial services (especially those who are specialised in one product). The analysis has shown that the practice of tying is still common for small and medium enterprises as well as local municipalities. Following the outcomes of the study, the AMO called the banks to:

  • refrain from the practice of tying;
  • transparently provide its clients with all the information necessary for the evaluation of the particular competitors’ offer;
  • decrease information asymmetry between banks and their clients; and
  • minimise the administrative burden on clients to change their monitored financial services provider.

Given the relatively stable high concentration in the market of providing selected banking products and the lower bargaining power of some types of banks’ customers, the AMO will continue to actively monitor and evaluate the development of conditions of providing banking products to these customers.

In the food industry, the AMO focused on the analysis of milk and milk products and launched an extensive survey to assess the current situation in this area in the second half of 2013. The preliminary outcomes of the survey point out the different concentration of a downstream market from the view of milk processors and retailers. While milk processors face a rather concentrated market of big retail chains, these retail chains do not face any buyer power from the buyer side (ie, end consumers). The survey also deals with private labels, which are used by almost all retail chains.

The AMO’s issues in the current period cover legislative changes that will help solve problems arising from the practice, as well as legally confirm changes in recent approach towards the assessment of competition cases and enhance the effectiveness of the competition rules. The amendment passed the legislative process and has already been signed by the president of the Slovak Republic, effective from
1 July 2014. Four Decrees – on merger control, leniency programme, settlement and ‘de minimis’ requirements, which will be part of the Act – have also been submitted to the legislative process.

The most significant changes to the current Act on Protection of Competition concern the introduction of new instruments into Slovak competition policy. Some additional changes relate to the decision-making process.

First, the AMO intends to modify the system of time limits in merger control and to introduce notification using specific forms to simplify and speed up the process. The area of antitrust is also subject to certain amendments: the provisions on commitments and the leniency programme will be amended to increase legal certainty for undertakings. The leniency programme has been revised to reduce the concerns of potential leniency applicants and to increase their motivation to submit a leniency application, thereby intending to increase the number of revealed cartels. The draft amendment provides for possible limitations in case of actions for damages against a successful leniency applicant. It also foresees the possibility to use settlement as an alternative method of case resolution for all types of competition infringements. The amendment introduces a brand new instrument in the Slovak competition practice: a financial reward for natural persons who provide cartel evidence, amounting to 1 per cent of the imposed fine for a cartel (to a maximum of €100,000). The AMO expects that, together with the existing leniency programme, it will contribute to the fight against cartels.

The Amendment to the Act on Protection of Competition is part of the AMO’s overall strategy, the main target of which is to build a modern competition authority that brings clear benefits to consumers.

Member of the Antimonopoly Office of the Slovak Republic

Next Chapter: Slovakia: Overview

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