Tuesday, 30 July 2019

Decision 690/2019

Decision on the ex officio imposition of interim measures, pursuant to Article 25 par. 5 of the Greek Competition Act 3959/2011, on the company ELMIN BAUXITES S.A. which is active in the market for the production and sale of bauxite, following complaints put forth by the company MYTILINEOS S.A.

Decision 690/2019
File (PDF) Decision 690/2019
Date of Publication of Decision July 30th, 2019
Issue Number of Government Bulletin 3993/Β/04.11.2019
Relevant Market Production and Sale of Bauxite
Proceedings Abuse of Dominant Position
Legal Framework Article 25 par. 5 of the Greek Competition Act 3959/2011
Decision Imposition of Interim Measures
Complainant MYTILINEOS S.A.



Summary of Decision

The Hellenic Competition Commission, following an ex officio investigation, decided the following in an open vote:

1. By majority, with two descending opinions, that the conditions for imposing interim measures, pursuant to article 25(5) of the Greek Competition Act 3959/2011, have been satisfied and in particular that:

ELMIN BAUXITES S.A. is likely to have abused its dominant position in violation of Article 2 of the Greek Competition Act 3959/2011 and Article 102 TFEU, in the form of:

a) the unjustified refusal to sell, with the intention of imposing unreasonable terms, 

b) the indirect imposition of unreasonable terms of sale and

c) the restriction of production at customers’ loss.

Specifically, ELMIN’s sudden and significant reduction in the bauxite quantity it supplies to MYTILINEOS has caused a restriction in the availability of bauxite products and their derivatives in the market, to the extent where suppliers/product companies are at risk of a possible exclusion/exit from these markets. This could lead to the inhibition of interbrand competition and a possible reduction of supply and/or increase in prices, causing harm to the final customers.

2. The data suggests that there is a serious threat of irreparable harm being caused to the public interest. In particular:

a) there is a shortage of alternative solutions for MYTILINEOS with regards to the procurement of bauxite for supplementing the missing quantities

b) there is a shortage of alternative suppliers for companies that trade in bauxite derivatives, putting them at risk of exclusion from these markets

c) the sudden and inadequately justified reduction of bauxite quantities supplied by ELMIN to MYTILINEOS renders the immediate replacement of the missing quantities impossible

d) due to the uncertainty regarding the acquisition of the necessary bauxite quantities at the stage of negotiations and the agreement to supply MYTILINEOS with reduced quantities, the activity of MYTILINEOS is put at risk and so is the steady supply of the derivative market.

e) MYTILINEOS’ dysfunctional factory, in particular the successive disruptions in its operation have given rise to the risk of accidents occurring, which could lead to a reduction of the factory’s productive capacity. In addition, the unorthodox method of production followed by MYTILINEOS in order to combat the reduced quantity of bauxite supplied by ELMIN, could lead to a failure to undergo vital inspections, which could entail the production of zero utilizable product, causing irreparable damage to the public interest.

3. Unanimously, that the following ex officio interim measures must be imposed by the Hellenic Competition Commission:

ELMIN must immediately supply MYTILINEOS with the required quantities of standard quality bauxite for 2019, and must do so respectively for the quantities for 2018, in order to combat the potential systemic inefficiencies in the relevant markets. Specifically, bearing in mind that the total quantity of bauxite sold in 2018 by ELMIN was 770,000MT,  ELMIN must supply MYTILINEOS with the quantity that corresponds to the difference between the two years (770,000MT-550,000MT=220,000MT), in proportion to the months remaining until the termination of the agreement signed on 22/03/2019 between the two parties, i.e. to supply an extra 18.333MT of standard quality bauxite per month at the contractually agreed price and for the duration of 5 months until the termination of the contract on 31/12/2019. The total quantity that must be delivered is 18.333MT x 5 months = 91.665MT. ELMIN must, within 10 days from the publication of the decision on interim measures, make the appropriate amendments to the agreement signed on 22/03/2019, and must share evidence of the aforementioned actions within 10 days of their completion to the Commission. ELMIN shall begin negotiations with MYTILINEOS in order to agree on a deal for the procurement of bauxite. The deal shall be capable of ensuring the viability of MYTILINEOS and of the derivative market for the period after the termination of the current, amended as stated above, agreement. The negotiations, for which relevant protocols shall be observed, shall commence within 20 days of the publication of the decision on interim measures and be concluded within two months of their commencement. ELMIN must share evidence of its actions together with the adhered-to protocols within 10 days from the conclusion of the negotiations.

In the event of failure to comply with the above, the Hellenic Competition Commission reserves its right to impose on ELMIN a fine of eight thousand Euros (€8,000) per day of non-compliance, which is imposed by the Commission upon a decision confirming the company’s non-compliance.

Judicial Means Decision has been appealed
Decisions by the Court of Appeal of Athens (Administrative Division)  
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