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Estonian Competition Authority

Press Release: The Supreme Court upheld the Competition Authority’s injunction with regard to OÜ Lehepunkt

The Supreme Court decided not to review the appeal of OÜ Lehepunkt (hereinafter: Lehepunkt), as the result of which the Competition Authority’s injunction comes into force. By introducing various service fees Lehepunkt affected competition between publishers in a negative way, as an unjustified competitive advantage was provided for large publishing groups, while the independent publishers who had to pay the same high price were put at a competitive disadvantage.

On 29 April 2009 the Competition Authority issued an injunction to Lehepunkt, according to which the company has violated the Competition Act as the enterprise that enjoys the dominant position on the wholesale magazine market in Estonia. According to the law, an undertaking with the dominant market position is prohibited from offering or applying dissimilar conditions to the business partners on the basis of equivalent agreements, thus putting some of them at a competitive disadvantage. The injunction prescribed to Lehepunkt to cease introducing and applying various service fees that are not justified by actual expenses depending on the amount of services purchased by a publisher and/or the group to which such publisher belongs.

The wholesale service provided by Lehepunkt to magazine publishers is a service package aimed at delivery of issues of magazines from the publishers to retail outlets. The Competition Authority found that while offering a wholesale service for magazines Lehepunkt has applied lower service fees to the publishers that belong to the two leading publishing groups of Estonia (Ekspress Grupp and Eesti Meedia) than to other publishers, who do not belong to the said major groups. Having analyzed whether Lehepunkt is actually saving on expenses by providing services to large publishing groups, which, in turn, justifies application of the lower prices, the Competition Authority concluded that there are no significant cost savings. Costs of providing services in connection with magazines do not noticeably dependent on what publisher issues a particular magazine; therefore providing service at lower prices to the publishers that belong to large publishing groups is not objectively justified.

Lehepunkt appealed against the injunction of the Competition Authority to the Tallinn Administrative Court, which dismissed the complaint. The Tallinn Circuit Court also left the company's appeal unsatisfied. On 12 September 2012 the Supreme Court decided not to review Lehepunkt’s appeal in cassation. Therefore within 90 days from the moment the decision of Tallinn Circuit Court comes into force, Lehepunkt shall comply with the injunction.

The injunction of the Competition Authority is available at: http://www.konkurentsiamet.ee/public/Otsused/2009/o2009_020e.pdf

Information provided by:

Maarja Uulits
Head of External and Public Relations Department
Competition Authority
Phone: 667 2400
Email: maarja dot uulits at konkurentsiamet dot ee