Complaints (under Croatian competition law also referred to as “initiatives”), through which different market players may inform the Croatian Competition Agency (CCA) of suspected infringements of competition laws, have been introduced in the Croatian Competition Act back in 2010 and are not a novelty. Complaints have proved to be a useful tool that brought certain competition law violations to the attention of the CCA and helped detect and correct discrepancies in the market.
This said, more than ten years since their introduction, a significant number of the filed complaints get dismissed, in some cases, even without the CCA conducting a preliminary market investigation. In a larger number of instances, the CCA concludes a preliminary market investigation only to establish that the statutory conditions for initiating the procedure to determine an infringement have not been met. An example of this would be a situation in which a complaint is made against an undertaking suspected of abusing its dominant position in the market, only for the CCA to determine that the relevant undertaking is, in fact, not dominant, and hence no procedure is to be initiated (investigation continued) into the activities of the undertaking. On the other hand, there have been situations where the CCA dismissed the complaint without undertaking the market investigation because the facts presented in the complaint evidently showed that there is no competition law infringement (such as, for example, where an agreement was made between the affiliates constituting a single economic unit). Even more obvious examples of such complaint dismissals were situations where violations described in the complaint did not raise competition law concerns, although they may have been a violation of some other law.
The latter case may be a result of market participants not being familiar with competition laws and interpreting the provisions of the Croatian Competition Act in an overly broad manner. After all, the Croatian Competition Act sets only the underlying rules that are then further elaborated in implementing regulations and interpreted through guidelines and the practice of the CCA and courts. Consequently, it is not unlikely for non-practitioners to erroneously consider that a certain issue amounts to a competition law violation, even though a person more familiar with competition law rules and practices would know that this is not the case.
At times, there is another side to this story, and certain undertakings have been known to use complaints as a manner of forcing the hand of the other side in business negotiations, or as a retaliation against the business partner that has terminated a business relationship with them (even though they might be aware that the situation described in their complaint would not really raise any competition law concerns). If an undertaking is looking to use competition law tools as somewhat of a leverage, a complaint filed with the CCA (where the CCA would undertake the investigation and, if needed, initiate a procedure against the other undertaking) is certainly a much more cost-effective way of going about this than filing a stand-alone damages claim before the court (where the cost of such litigation would be all on the complaining undertaking).
The types of “misuses” described above of the complaint tool may, to an extent, be reduced by the continuous education of market players and the general public on competition law rules and practices. However, the fact remains that those who wish to use this tool to apply pressure on their business partners will consequently continue to increase the caseload of the CCA which needs to spend time scrutinizing such complaints (in more or less detail – depending on the facts of the case). On the other hand, even the complaints that address violations that do not amount to competition law violations help develop local competition practice and serve as guidance for future cases, and, as such, may be considered useful to the broader local audience (albeit being inconvenient for the undertaking against which the complaint was made).
By Iva Basaric, Partner, Babic & Partners