Cyprus: Commission for the Protection of Competition

The Cyprus Commission for the Protection of Competition (CPC) is the competent authority for applying competition rules in the Republic of Cyprus. In this regard, there are two applicable laws relating to antitrust enforcement and mergers and acquisitions control:

• the Protection of Competition Laws of 2008 No. 13(I)/2008, as amended by Law No. 41(I)/2014; and
• the Control of Concentrations between Undertakings Law of 2014, No. 83(I)/2014.

The CPC is an independent administrative authority. It consists of the Chairperson and four members who are appointed by the Council of Ministers based on a proposal of the Minister of Energy, Commerce, Industry and Tourism. The term of office of the Chairperson and the members is five years and can be renewed once. The current members of the Commission were appointed in 2013; however, one of them was appointed recently in replacement of a member who resigned in 2016. The Commission serves on a full-time basis and is assisted by its Service. The members of the staff of the Service are members of the Public Service and are appointed as per the Public Service Law and procedures.

The CPC is an administrative body, bound by administrative law and as such all decisions of the Commission can be appealed to the Administrative Court (established on 1 January 2016 – previously reviewed by the Supreme Court of Cyprus).

The period of reference taken into account for this contribution is between June 2015 and May 2016, although two cases will be cited that were issued in April and May 2015 but could not be published in the previous edition due to confidential issues.

Specifically, in April 2015, the Commission decided to impose fines of €20 million and €700,000 on Daimler AG (Mercedes-Benz car and car parts manufacturer) and Cyprus Import Corporation Ltd (distributor and seller of Mercedes-Benz cars and car parts in Cyprus), respectively, for infringements of section 3(1)(b) of the Laws on the Protection of Competition of 2008 and 2014 and article 101(1)(b) of the Treaty for the Functioning of the European Union (TFEU), as a result of the vertical agreement signed between them for the application in the Cypriot market of the selective distribution system of original parts of Mercedes-Benz cars with the trademark of the car manufacturer. More specifically, the CPC found that the way the selective distribution was applied in the isolated island market of Cyprus led to restriction of competition to the detriment of consumers.

Subsequently, in May 2015, the Commission decided to impose fines of €2.9 million and €2.25 million on the Cyprus Telecommunications Authority (the telecoms incumbent which also operates a pay-TV service) and Forthnet SA (a company that operated both on the wholesale and retail supply of its pay-TV channels), respectively, for infringements of sections 3(1)(a), 3(1)(b) and 3(1)(c) of the Laws on the Protection of Competition of 2008 and 2014 and article 101(1)(a), (b) and (c) TFEU, as a result of agreements that had (i) as their object the indirect fixing of prices and the exchange of sensitive information regarding the undertakings’ future policy, (ii) as their effect the limitation of production, markets, technical development or investments, and (iii) as their object the sharing of markets and/or sources of supply.

Furthermore, the Commission decided to impose a fine of €39,667.34 on Lalizas SA, a company operating in the market of marine equipment and equipment for yachts, amateur and professional fishing boats, water sports boats and ferry boats (tourist and others), for the infringement of section 3(1)(a) and 3(1)(c) of the Laws on the Protection of Competition of 2008 and 2014 and article 101(1)(a) and (c) TFEU, as a result of the fixing of resale prices and the limitation of reciprocal supplies between distributors that were members of its franchise network.

In addition, the Commission decided to impose a fine of €750,000 on Hermes Airports Ltd (the operator of Larnaka and Paphos airports – hereafter ‘Hermes’) for the infringement of section 6(1)(a) of the Laws on the Protection of Competition of 2008 and 2014 and article 102(a) TFEU. Specifically, the Commission decided that Hermes abused its dominant position by imposing arbitrary trading conditions both in the tender documents drafted for the conclusion of airport car rental space contracts with car rental companies and for the conclusion of the off-airport car rental space contract with the complainant company, Demstar Rentals (2008) Ltd. The Commission also ordered Hermes to proceed with a new tender procedure, as soon as possible, and at the latest, three months before the expiry of the current contracts, for the establishment of at least seven car rental providers in the airport terminals.

The CPC has also examined, within the period of June 2015 to May 2016, 17 notifications of concentrations between undertakings, issuing clearance decisions to those examined so far in Phase I. The CPC, after the Control of Concentrations of Undertakings Law of 2014 came into force, only examines concentrations in which at least two of the parties are active in Cyprus.

The CPC, in an effort to enhance its advocacy role and promote competition culture and compliance with competition rules in Cyprus, co-organised on 30 October 2015 with the University of Cyprus (UCY) a conference on the protection of competition in Cyprus and Europe, with Mr Bruno Lassere, member of the French Supreme Administrative Court, and President since July 2004 of the French Competition Authority, being the keynote speaker and sharing his experiences for the development of competition policies. The conference was organised within the framework of the Advocacy Policy with the purpose of the development and consolidation of a ‘competition culture’ in the minds of economic players and consumers and the realisation by society in general of the great benefits of competition as well as contributing to the promotion of a competitive market environment.

The CPC has also been involved in the procedures at national level in relation to the Damages Directive (Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the member states and of the European Union). The CPC is hopeful that the application of the Directive will lead to greater public awareness of the competition rules and an increased interest in their application.

The CPC continues to cooperate closely with regulators and, in particular with the Regulator for Telecommunications and Postal Services and the Energy Regulator, and provides reasoned opinions to public bodies, such as government departments and the House of Representatives, on issues of its competence and on new or older legislation or other activities.

The CPC is committed to the public enforcement of competition rules to prevent and deter infringements for the benefit of the economy and consumers. Being an administrative body, the CPC must investigate all complaints submitted despite the limited resources available to the CPC.

As a matter of policy priorities for the coming period, the CPC points out the need to:

• continue enhancing its advocacy role and promote competition culture and compliance with competition rules in Cyprus;
• continue its market monitoring for any impediments or restrictions of competition in crucial sectors of the economy; and
•  strive to evolve and develop according to the requirements and demands of the economy and its role as the national competition authority, notwithstanding its limited resources.