CPC Decision: 42/2019 – National competition authority imposes administrative fine for abuse of dominant position

4 Dec 2019 |

Decision dated 27th August 2019 and published in the Official Gazette of the Republic of Cyprus on 22nd November 2019. The Commission for the Protection of Competition (“the Commission”), in light of an official complaint filed by Theatre One against the Cyprus Theatre Organisation (“THOC”), has imposed an administrative fine on THOC in the amount of €342.221,35 on the grounds of violation of section 6(1) of the Protection of Competition Law no. 13(I)/ 2008, as amended in 2014 (“the Law”). Theatre One, in their complaint submitted against THOC alleged that THOC: “...taking advantage of its dominant position, controls the finances of the theatres as it judges and decides on the portion of subsidies for theatres, irrespective of market-determined criteria, but with criteria which it sets unilaterally and without control…” (quote). In the present case, the Commission emphasised that THOC is responsible for approving and distributing subsidies to the theatres within the Republic of Cyprus, with which THOC itself is a competitor in the market for the production and presentation of theatrical performances and also noted that how through its dual role as responsible for the supply/ distribution of subsidies, whilst simultaneously, with its active presence in the relevant market for the production and presentation of theatrical performances, it essentially distorts competition, abusing its dominant position in the relevant market. This is primarily due to the fact that THOC itself is in a strong position to select the degree of financial stance of its direct competitors in the respective market without itself being subject to any substantial control over its own theatrical performances. The Commission noted in particular that while THOC distributes subsidies to theatres per performances, on the basis of certain criteria set out by the “Thymeli” Scheme, THOC itself receives funding without any corresponding control. In fact, the funding it receives is not per performance but, as revealed by the facts examined before it, is for its entire operation. Moreover, it has been pointed out that THOC’s power to distribute subsidies to other independent theatres enables it to obtain further information about its competitors which it would not otherwise have. In light of the above, the Commission unanimously decided that there has been a clear violation of section 6(1) of the Law by THOC for abuse of dominant position in the relevant market as a result of its dual capacity as responsible for the implementation of the “Thymeli” Scheme and as an active player in the market for the production and presentation of theatrical performances in the Republic of Cyprus. Decision Taking into account the severity of the infringement, its duration, as well as any mitigating factors presented before it, the Commission unanimously decided: To impose an administrative fine in the amount of €342.221,35 for breach of section 6(1) of the Law, regarding the abuse of its dominant position in the relevant market as a result of its dual capacity; and To call upon THOC, the obligation to pay the administrative fine above-mentioned, within 1 (one) month from the date of notification of the Decision. To oblige THOC to immediately cease the infringement and to order it to avoid the repetition of such practices in the future. Commentary In view of the above Decision, we anticipate that THOC may challenge this Decision and resort to Recourse in the near future. You can find the full text of the Commission’s decision at the link below: http://www.competition.gov.cy/competition/competition.nsf/All/F2EA77DA713000E5C22584BA00279A2B/$file/Απόφαση%20ΕΠΑ%2042_2019.pdf Evyenia Epaminondou Prountzos & Prountzos LLC
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