Competition & Antitrust

The two Acts protecting competition in Greece

Competition in the Greek market is protected mainly by two Acts: Act 146/1914 on “Unfair Competition” and the much younger Act 3959/2011 “on the Protection of Free Competition”. While the former is concerned about the way, in which competition is conducted, the latter aims already at ensuring the existence of effective competition. The model of Act 146/1914 has been the German UWG (Gesetz gegen den unlauteren Wettbewerb) of 1909 which was radically amended in 2004. Act 703/1977, the predecessor of Act 3959/2011, was drafted after the articles 85 and 86 EEC and Regulation 17/1962. As quite often the case in other EU member States, the Act on Unfair Competition remains practically unchanged for over a century, while the Act on the Protection of Free Competition has been amended several times in order to become more efficient.

Act 703/1977 was introduced when Greece was about to become a member of the EEC. The motives for this legislative initiative were rather political: the enactment of competition rules “inspired” by the Treaty of Rome was obviously meant to demonstrate the country’s determination to adapt itself to the new economic environment of an open market operating under conditions of free competition. In reality, no competition rules were necessary at that time: the Greek market was introvert and characterized by lack of competitiveness, heavy protectionism and a large number of state measures in most economic sectors distorting competition. This situation had only started to change several years later and only under the influence of the EU Law. The liberalization of monopolistic markets, such as telecommunications and energy, and the opening of the “closed” professions are the best known examples. With few exceptions, Greece has always been unwilling to follow these developments, even at the highest point of the recent economic crisis, when pressure became very compelling.

Which are the basic prohibitions under Greek competition law?

The general applicable provisions prohibiting anti-competitive behaviors and abuse of dominance are, accordingly, articles 1 and 2 of Law 3959/2011 (which replaced previous L. 703/1977).

Their wording actually constituting a literal translation of the equivalent articles 101, 102 TFEU, were initially introduced before Greece joined the EC and have remained unaffected until today. Both articles provide for an indicative list of typical (per se) violations (see below).

What is the objective of the above provisions?

Greek competition law aims to ensure the proper functioning of the market and, in effect, lead to consumer welfare. The well-established criteria for exemption of anti-competitive agreements, as set out in article 1 par. 3 of L. 3959/11 (equivalent to article 101 par. 3 TFEU) confirm the above.

Which undertakings are caught by Greek competition law?

The above provisions apply to all undertakings, i.e. both to private and public entities, as long as there is a business activity (functional criterion). It must also be noted that, in HCC practice, there have been several cases in the past that have involved liberal professions (dentists, lawyers, engineers).

Which are the objectives of the unfair competition legislation and the relevant interests protected?

The objective is to assure that the competitors’ efforts to prevail within the relevant market are based on the principle of “the most efficient offer” and not on other means, which do not comply with this principle. Within this framework, the competitor offering the best price-quality relationship is supposed to gain advantage over the rest of the players, since consumers will prefer these products/services offered. Apart from protecting the consumers’ best interests and allowing the proper functioning of the relevant market, the prohibition of unfair competition practices mainly protects the competitors against whom such unfair practices are targeted.

Which is the Greek legal framework concerning unfair competition and its systematic structure?

The main legislation regarding unfair competition in Greece is Law 146/1914. Considering its “age”, this Law has undergone only minor amendments, the latest and most significant of which was made by Law 3784/2009. Law 146/1914 follows the structure and systematic approach of its German ancestor (UWG, 1909): a general clause (sec.1) prohibits practices in all commercial, industrial and agricultural transactions, undertaken for competition purposes, which are contrary to business morals and ethics. Said section is followed by further sections covering specific unfair competition behaviors (such as misleading advertising, defamation, exploitation of other parties’ goodwill and infringement of third parties’ distinctive marks etc.). The practices prohibited under Law 146/1914 may also fall into the scope of other related Laws, such as the legislation regarding Consumer Protection, Antitrust and Market Regulation. In addition, Greece is a member to and has ratified the International Paris Convention of 1883 (as in force), the WIPO Convention of 1967 and the TRIPS Agreement of 1994.

What is the importance of State Aid rules?

Control of aids granted by States to undertakings is one of two main fields of EU competition policy, the other being the protection of free competition. Competition policy is a basic tool of EU action, aiming to develop those competitive forces that will allow markets to function properly, in order to secure the optimal allocation of available funds, the reduction of regional inequalities and the competitiveness of European enterprises. State Aid policy constitutes a crucial parameter of EU competition policy. By favoring certain undertakings to which they are granted, State Aids cause disorder to the balance achieved among market forces, as they may affect undertakings active in the same sector, in the same or in another member-State. Such State interventions prevent the internal market from developing freely and distort competition, as they usually diminish the incentives of undertakings to improve their efficiency, with further impact on the economic prosperity and unity of the common market.

What is considered as incompatible State Aid?

The Treaty on the Functioning of the European Union (TFEU) sets, in its article 107 (1)¹, the general rule that State Aids are in principle incompatible with the internal market. While the above provision does not contain a definition of State Aid, it does provide those elements, upon which the European Commission and the Court of Justice of the EU (CJEU)² were based to identify State Aid. This definition is very wide: “The notion of state aid essentially covers all economic advantages granted directly or indirectly through State resources in any form whatsoever which distort or threaten to distort competition and affect trade among member-States by favoring certain undertakings or the production of certain goods”³. Such aid is in principle prohibited and should not be awarded by the State before being notified to and approved by the Commission.

What is a monopoly?

A monopoly is a market in which a single undertaking holds 100 percent of the market share. In this sense, a monopoly is an extreme form of market dominance. The notion of dominance has been defined by the CJEU as a position of economic strength which enables the undertaking to behave in an appreciable extent independently of its competitors, customers and ultimately of its consumers (Case 27/76, United Brands v. Commission). It follows, therefore, that while the concept of dominance implies the existence of competitive forces of some degree, a pure monopolist is effectively unconstrained in limiting its output, setting its prices above the competitive level, or reducing the quality of its products.

Monopolies can be either natural or statutory. A natural monopoly emerges in a market which cannot sustain the operations of more than one undertakings on a lasting basis. A statutory monopoly, on the other hand, is conferred on a firm by means of State action. In markets where neither of these two conditions is satisfied, and in the absence of other forms of barriers to entry, the emergence of monopolies is rather unlikely, and is limited to situations where a single firm enjoys a first-mover advantage in a new market or where an undertaking is so much more efficient than its competitors that the latter are forced to exit the market. In both situations however, the monopoly’s position is likely to be short-lived, as the prospect of high profits is bound to eventually attract new entries.

What are compensation actions under Greek Competition law in general?

The Law 4529/2018 (Government Gazette A’ 56/23-3-2018) [hereafter “The Law”] on Private Enforcement of competition law transposes into Greek legal order the directive 2014/104/ EU concerning compensation actions for competition law infringements. Such actions existed well before the adoption of the directive, but the latter lays dawn a comprehensive set of legal rules aiming at facilitating the effective exercise of the rights of the victims.

Which practices are covered and which individual parties are protected?

The field of application of the Law is quite wide: it covers not only anticompetitive agreements (horizontal or vertical) but also abuses of dominance, but clearly not infringements related to concentrations control, such as the fact to implement a concentration, without having obtained the necessary clearance of the Hellenic Competition Commission (HCC) or the European Commission (the so-called “jumping the gun”) [see article 2 paragraph 1 in combination with article 3 paragraph 1 of the Law].

Not only the direct victims of an anticompetitive collusion or practice (e.g. the undertakings who have dealt directly with one or several members of a cartel or a dominant firm who has abused of its position), but also the indirect ones (remoted buyers) are protected [see article 11 paragraph 1 of the Law]. In order to facilitate the position of remoted buyers, the Law establishes some presumptions to their favor: the indirect buyer is presumed having suffered of the anticompetitive overcharge, if he proves the existence of the infringement,
the overcharge suffered by the direct buyer and the fact that he purchased goods or services related to the infringement [see article 11 paragraph 4 of the Law].

Recent Regulation (EU) 2018/302¹ addresses unjustified online sales discrimination based on customers' nationality, place of residence or place of establishment within the internal market. It applies to all traders2, including online marketplaces, operating within the Union, in connection to transactions relating to the sales of goods or the provision of services within the Union.

In particular, some customers are not able to buy goods and services online from traders located in a different Member State at the same conditions as locals, because of their nationality, residence or establishment. Online retailers may prevent customers to access and purchase goods or services cross-border by imposing restrictions to consumers on the basis of their nationality, place of residence or location by virtue of restrictions such as blocking access to websites across borders / re-routing customers to local websites if the customer has not given prior consent; making it impossible to complete an online order, purchase goods or download content when accessing a website from abroad; denying delivery across border; applying different prices and conditions depending on nationality, residence or location of the customer (through geo-localizing methods); refusing to accept cross-border payment, etc. Hence, practices hindering access to websites from other Member States (geo-discrimination), are prohibited on the basis of the Regulation.

Unjustified geo-blocking consists in discrimination between EU customers based on market segmentation along national borders, in order to increase profits to the detriment of consumers and the single market prerogative. Geo-blocking and other geographically-based restrictions limit the possibility for consumers and businesses to benefit from the advantages of online commerce and cross-border sales.

The Regulation aims to give consumers wider and easier access to products and services cross-border in the framework of the EU digital single market strategy and counter market fragmentation. Thus, on the basis of the Regulation, consumers in a member state buying products abroad, online, will, in principle, have the right to be treated like local consumers and take advantage of best prices, sales, offers and conditions.