Wednesday, 25 October 2023

Press Release - Fine of 628,450 euros to a children's toy company following a Dispute Settlement Process.

Subject: Settlement Decision on a fine of 628,450 euros to a children's toy company following the ex officio investigation into the children's toy market, excluding those connected to the use of computers.

The Hellenic Competition Commission (HCC) in plenary, unanimously decided (no. 816/2023), according to the simplified dispute settlement procedure of article 29a of law 3959/2011 and according to no. 790/2022 of its decision, to accept the relevant Settlement Proposal submitted by company GIOCHI PREZIOSI HELLAS SA, following a related Statement of Objections, and imposed a reduced fine of 628,450 euros, for the violation of Article 1 of Law 3959 2011 and 101 TFEU, based on the rationale of the Decision.

More specifically, the reason for starting an ex officio investigation was the sampling of specific product codes that show the greatest popularity, as recorded on the online websites of toy retail stores. For the purposes of this research, an on-site inspection (dawn raid) was carried out at the offices of companies operating at all levels (retail-wholesale) of the relevant toy market, among which is GIOCHI PREZIOSI HELLAS SA.

GIOCHI PREZIOSI HELLAS SA., for which evidence was collected, capable of substantiating a violation of art. 1 of Law 3959/2011 and 101 of the TFEU, in the context of a vertical agreement with resellers/retailers, expressed in writing its interest in being included in the settlement process and submitted a relevant request, in accordance with what is provided in par. 16 of the HCC Notice on the dispute settlement process (no. 790/2022 decision).

According to the rationale of the Decision, from the available evidence it appears that the company carried out a single and continuous, in terms of scope, targeting and temporal sequence (and due to the seasonal nature of the product), practice of determining resale prices (RPM), in the context of vertical collusion, in violation of articles 1 par. 1 of Law 3959/2011 and 101 par. 1 TFEU, which lasted from 28.12.2017 to 8.10.2021. Fixing resale prices is, by its very nature, a restriction of competition and is considered by its nature to be capable of having an impact on the relevant market, as it softens competition between resellers by eliminating intra-brand competition, while acting as a disincentive to reduce selling prices for the specific products. From the nature and content of the evidence in the case, it can be concluded that the fixing of resale prices of the products was implemented in practice.

The Plenary of HCC, by virtue of par. 35 of no. 795/2022 of its Decision, decided to accept, in accordance with the reasoning of the Reporter's Opinion (Statement of Objections), the Dispute Settlement Proposal submitted by the above company and to issue a decision according to which:

It finds that the company GIOCHI PREZIOSI HELLAS SA violated Article 1 of Law 3959/2011 and 101 of the TFEU due to its participation in a prohibited vertical agreement outlined in the Statement of Objections, in the context of the Dispute Settlement Procedure.

Orders the aforementioned company to cease, if it has not already done so, and to refrain in the future, from the practice of fixing resale prices, as a single and continuous violation, of articles 1 of Law 3959/2011 and 101 of the TFEU.

It imposes a fine of 628,450 euros for the found violation of Articles 1 of Law 3959/2011 and 101 of the TFEU.

Finally, it is reminded that the decision is issued according to the above-mentioned simplified procedure, following the relevant expression of interest on the part of the company for its inclusion in the settlement procedure and the consequent final declaration of acceptance of the violation found.

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