07/07/2008 13:30
The Competition Commission has three key cases (touching on some of the most important sectors of the economy) to close by the end of this month, prior to an overhaul of its operating framework.
The commission has 52 cases pending, involving abuse of dominant market position, cartel practises, price fixing etc, but those which stand out are the cases regarding BP and Shell’s suspected cartel practices regarding the price of unleaded gasoline, charges made by interbank systems, and dubious practices adopted in the branch of washing detergents.
During the next few weeks the commission is expected to have issued its decisions on the first two cases and to have completed its overview and recommendation for the third, which also involves consumer goods in general. The decision may well prompt the Development Ministry to take additional measures to protect consumers.
Given the rise in fuel prices over the last few months, the decision on the Greek subsidiaries of BP and Shell, two of the world’s biggest oil companies, is eagerly anticipated. In its proposal, the ministry’s General Directorate for Competition suggested that BP and Shell had followed a common discount policy through which they maintained a steady front against competition in prices of unleaded gasoline, the most popular form of fuel on retail sale at gas stations.
The original recommendation had actually called for the imposition of a massive fine in excess of 100 million euros on the two companies. A second recommendation, made during a review of the case along with others following the Mevgal dairy firm scandal, did not refer to a specific amount for the fine, as has been the case with all recommendations made since, but did condemn the two firms.
The BP-Shell case has a long history in the Competition Commission. The first recommendation was completed in 2005 and constituted the outcome of an investigation that had lasted for more than two years.
By the end of July a decision should also have been delivered in the case focusing on the commission which banks charge consumers when the latter use interbank systems such as Diasdebit, DiasATM or Diastransfer. After many months of investigation, the recommendations issued involve more than 20 banks. According to these recommendations, the size of the charges was determined as the result of agreements, rather than being based on the relevant costs.
The case began to be investigated at the start of this year and banks proposed to the independent authority that they undertake specific commitments. It is therefore up to the Competition Commission to decide whether to accept these commitments as adequate or not.
Another interesting case at the present time involves washing detergents and the practices adopted by multinational companies active in the branch. The recommendation of the commission will be closely scrutinized at a time when Greeks consider high prices to be their No 1 problem.
Sources suggest that the General Directorate for Competition believes that the suspicious patterns that have been identified, and which may constitute price fixing across a wide range of products in the branch, could be attributed to the relationship forged between industrial-importing companies and major supermarket chains in the country.
Change of operation
Before the end of this summer the Development Ministry is expected to make public its final decisions regarding the reform of the operating framework of the Competition Commission. The objective of the changes is to accelerate the handling of those cases that remain pending as well as those that will arise in the future.
Several proposals have already been examined but the working group that has undertaken the relevant task is in constant contact with the European Commission’s Directorate General on Competition, whose operating model the Greek ministry wishes to apply for the country’s Competition Commission. This means that all the people in the commission’s plenary will be employed full-time, with only a few exceptions, and be actively involved in research.
The ministry also wants to staff the commission with an additional 50 people, as well as hiring attorneys so that it can deal with the wave of legal actions brought against the commission.
The commission has 52 cases pending, involving abuse of dominant market position, cartel practises, price fixing etc, but those which stand out are the cases regarding BP and Shell’s suspected cartel practices regarding the price of unleaded gasoline, charges made by interbank systems, and dubious practices adopted in the branch of washing detergents.
During the next few weeks the commission is expected to have issued its decisions on the first two cases and to have completed its overview and recommendation for the third, which also involves consumer goods in general. The decision may well prompt the Development Ministry to take additional measures to protect consumers.
Given the rise in fuel prices over the last few months, the decision on the Greek subsidiaries of BP and Shell, two of the world’s biggest oil companies, is eagerly anticipated. In its proposal, the ministry’s General Directorate for Competition suggested that BP and Shell had followed a common discount policy through which they maintained a steady front against competition in prices of unleaded gasoline, the most popular form of fuel on retail sale at gas stations.
The original recommendation had actually called for the imposition of a massive fine in excess of 100 million euros on the two companies. A second recommendation, made during a review of the case along with others following the Mevgal dairy firm scandal, did not refer to a specific amount for the fine, as has been the case with all recommendations made since, but did condemn the two firms.
The BP-Shell case has a long history in the Competition Commission. The first recommendation was completed in 2005 and constituted the outcome of an investigation that had lasted for more than two years.
By the end of July a decision should also have been delivered in the case focusing on the commission which banks charge consumers when the latter use interbank systems such as Diasdebit, DiasATM or Diastransfer. After many months of investigation, the recommendations issued involve more than 20 banks. According to these recommendations, the size of the charges was determined as the result of agreements, rather than being based on the relevant costs.
The case began to be investigated at the start of this year and banks proposed to the independent authority that they undertake specific commitments. It is therefore up to the Competition Commission to decide whether to accept these commitments as adequate or not.
Another interesting case at the present time involves washing detergents and the practices adopted by multinational companies active in the branch. The recommendation of the commission will be closely scrutinized at a time when Greeks consider high prices to be their No 1 problem.
Sources suggest that the General Directorate for Competition believes that the suspicious patterns that have been identified, and which may constitute price fixing across a wide range of products in the branch, could be attributed to the relationship forged between industrial-importing companies and major supermarket chains in the country.
Change of operation
Before the end of this summer the Development Ministry is expected to make public its final decisions regarding the reform of the operating framework of the Competition Commission. The objective of the changes is to accelerate the handling of those cases that remain pending as well as those that will arise in the future.
Several proposals have already been examined but the working group that has undertaken the relevant task is in constant contact with the European Commission’s Directorate General on Competition, whose operating model the Greek ministry wishes to apply for the country’s Competition Commission. This means that all the people in the commission’s plenary will be employed full-time, with only a few exceptions, and be actively involved in research.
The ministry also wants to staff the commission with an additional 50 people, as well as hiring attorneys so that it can deal with the wave of legal actions brought against the commission.
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