The Chairman of the Office for the Protection of Competition
(“the Office”), Mr. Petr Rafaj, dismissed the appeal of the company REWE
Zentralfinanz eG against the first instance decision issued in January 2013 by
which the fine 23.89 million CZK was imposed on this undertaking for not
fulfilling commitments agreed in a REWE/Plus Discount merger case.
In 2008, the
Office assessed the concentration of undertakings REWE and PLUS-DISCOUNT. In
course of the administrative proceeding, the Office found out that this
transaction which merged retail chains Billa and Penny Market with PLUS stores
could distort competition in several local markets. In response to these
findings, REWE proposed the commitments in the form of the sale of four stores
in the regions concerned. After the assessment of the proposed commitments, the
Office concluded that they are sufficient to eliminate the competitions
concerns and cleared the merger, subject to the proposed commitments.
The sale of
four stores should have taken part within one year after the decision had been
issued, however REWE several times applied for a postponement of the deadline
for the implementation of commitments and their reassessment. The Office
partially adjusted the commitments, however neither these were implemented. At
the end of 2010, the administrative proceeding for non-compliance with the
imposed commitments was initiated.
In course of
the administrative proceeding, the Office thoroughly investigated the
activities of REWE related to its efforts to fulfil the commitments. In January
2013, the Office issued first instance decision in which it concluded that REWE
had not made sufficient efforts to their implementation. The obligation laid
down in the decision on REWE/PLUS-DISCOUNT merger was therefore not fulfilled.
The Office imposed for aforementioned infringement of competition law the
administrative fine of 24 million CZK. In calculating the fine, the Office took
into account the turnover of the undertaking in regions concerned.
REWE filed an
appeal against the decision to the Chairman of the Office. The party sought to
disprove conclusions made in the first instance, especially the conclusion
about its insufficient efforts aimed to fulfilling the commitments, not approaching
all potential buyers of stores concerned and also the incorrect legal
assessment carried out by the Office and the disproportionate amount of the
fine. The Chairman of the Office rejected these objections and stated that REWE
must have been aware of not fulfilling the commitments imposed by the decision
of the Office and thus seriously infringed competition law.
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