Wednesday, 15 December 2021 10:00

Press Release - HCC Decision on the imposition of a fine

Subject: HCC Decision on the imposition of a fine on ELTEPE SA (currently ENDIALE SA) for violation of articles 2 of Greek Law 3959/2011 and 102 TFEU

Executive Summary

With its Decision No. 741/2021, the Hellenic Competition Commission (HCC) imposed upon the company ELTEPE SA (currently ENDIALE SA) a fine totalling EUR 111.600 for infringing Articles 2 of Greek Law 3959/2011 (the Greek Competition Act) and 102 TFEU in the Greek market for waste oils management. 

The case was initiated following complaints by the companies GREEN OIL AEVE, ESK OIL AEVE, as well as the Association of Collectors of Waste Oils alleging infringements of the Greek Competition Act and the TFEU in the Greek markets for waste oils management (which includes the collection, treatment and remediation/recycling of waste lubricant oils) by the companies ELTEPE SA, CYCLON HELLAS (now LPC SA), ELTEPE Kinopraxia as well as a natural person.  

Procedure

The company GREEN OIL and the Association of Collectors of Waste Oils submitted two complaints to the HCC alleging that the companies ELTEPE SA, CYCLON HELLAS, ELTEPE Kinopraxia (all companies part of the same Group) as well as a natural person, had infringed articles 1 and 2 of the Greek Competition Act (then Law 703/1977) as well as article 2a of that Act, which prohibited the abuse of economic dependence. Subsequently, a similar complaint was submitted by the company ESK OIL.

An SO was addressed to the companies mentioned above in January 2021. The Board of the HCC convened on 5 May 2021 to hear the case (full hearing before the Grand Chamber).

Facts

The structure of the market for waste oils management in Greece has undergone distinct “phases”, depending on the applicable legal framework in any given period. More specifically, prior to 2004, ie before the establishment of a System for Alternative Administration of Waste Lubricant Oils Collection in Greece, the market had two distinct levels of economic activity: a) the collection of waste lubricant oils, and b) the remediation/ recycling of such oils. Subsequently, after 2004, when ELTEPE’s Alternative Administration of Waste Lubricants Oils Collection System started operating, an additional layer of economic activity was introduced, that of the organisation and operation of waste lubricants oils management systems. The third phase starts in 2013, at which point ELTEPE’s Alternative Administration System stopped acting as “intermediary”, which buys and sells waste oils, but only carries out the qualitative and quantitative control of such waste oils in the Greek market, operating like an "ecosystem" as it operates as a platform that connects the economic activities of different companies in order to provide services to different groups of users.

All the undertakings involved in the present case are active in the Greek markets for waste oils management (which includes different stages/ sub-markets concerning the collection, treatment and remediation/recycling of waste lubricant oils). More specifically:

  • ESK OIL AEVE and the Association of Collectors of Waste Oils (complainants), as well as ELTEPE Kinopraxia, are active in the collection of waste lubricant oils;
  • ELTEPE SA has operated, since 2004, the only authorized waste oils management system active in Greece (Alternative Administration of Waste Lubricants Oils Collection System). It is noted that other systems have requested to be authorized by the Greek authorities throughout the years, but their requests have been rejected;
  • GREEN OIL AEVE (complainant) as well as CYCLON SA are active in the remediation/ recycling of such oils.

The complainants essentially allege that ELTEPE SA abused its dominant (de facto monopolistic) position in the market for waste oils management, through several different practices, in order to exclude other market players from that market, as well as from the relevant upstream (remediation/ recycling of such oils) and downstream (collection of such oils) markets. The complainants stress that other companies belonging to the same Group as ELTEPE SA were active in the upstream and downstream markets, respectively.

     

Legal Assessment

According to the SO, ELTEPE SA infringed Article 2 of the Greek Competition Act as well as of Article 102 TFEU as the agreements concluded during the period from 1.1.2004 up until 15.1.2013 between ELTEPE SA and companies active in the collection as well as the remediation/ recycling of waste lubricant oils, contained exclusivity clauses, resulting to an abuse of ELTEPE SA’s dominant position in the relevant market. According to the HCC, ELTEPE’s anti-competitive practices resulted in horizontal foreclosure of its competitors in the market for the organisation and operation of waste lubricants oils management systems, in which the complainant holds a dominant position. In particular, these exclusivity clauses aimed at directing every source of supply to ELTEPE, and as a result foreclosed potential competition from other possible Alternative Administration of Waste Lubricants Oils Collection Systems, which would not have access to sources of supply for their activity.

It should be noted that the HCC specifically considered the possibility of justifying, following a proportionality assessment, the company's behavior as not constituting an abuse, the company claiming reasons of environmental protection, also in view of the principles of sustainable development and of the methodology set out in the HCC’s recent Technical Report on Sustainability and Competition published in January 2021. However, the HCC concluded that ELTEPE did not provide any evidence of a possible objective justification that could establish that the said exclusivity clauses were necessary in order to increase the effectiveness of the overall management of waste lubricant oils as regards environmental protection and sustainable development.

In addition, the HCC found that, during the period from 2.8.2004 up until 1.8.2008, ELTEPE SA infringed (the now abolished) Article 2a of Law 703/1977, which prohibited the abuse of economic dependence. Finally, the HCC found that other practices alleged by the complainants (such as refusal to supply to GREEN OIL AEVE and imposition of unfair prices to companies active in the collection of waste oils) have not been established and the relevant arguments were therefore dismissed as unfounded. 

 

HCC Decision

With its Decision No. 741/2021, the Plenary Session of the HCC unanimously found that the company ELTEPE SA infringed Articles 2 of the Greek Competition Act and 102 TFEU, given that agreements it concluded during the period from 1.1.2004 up until 15.1.2013 with companies active in the collection as well as the remediation/ recycling of waste lubricant oils, contained exclusivity clauses, resulting to an abuse of ELTEPE SA’s dominant position in the relevant market.  For the reasons set out above, the HCC imposed a fine of EUR 111.600 upon ELTEPE SA. 

In addition, the HCC found that, during the period from 2.8.2004 up until 1.8.2008, ELTEPE SA infringed (the now abolished) Article 2a of Law 703/1977, which prohibited the abuse of economic dependence, without imposing a fine for this infringement. The HCC also required that ELTEPE SA omits similar practices in the future and threatened the company with a fine, in case the HCC decides in the future that the above-mentioned infringements continue or are repeated. 

The HCC dismissed the complaints of GREEN OIL AEVE, ESK OIL AEVE and the Association of Collectors of Waste Oils as to their remainder.

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