According to Kadri Lepikult, Head of Administrative Proceedings at the Competition Authority, fair competition requires that undertakings act independently in the market and make their decisions autonomously. ‘Pricing decisions must be made independently. Good intentions or voluntary participation do not exempt companies from liability if, in substance, their actions amount to price-fixing, i.e., a cartel,’ Lepikult said.
With the VAT increase taking effect from 1 July, there have been calls to enter into so-called fair trading agreements. However, any agreement concerning prices – whether aimet at increasing, maintaining, reducing or limiting them – even if voluntary or non-binding, may replace such independent decision-making with coordinated conduct and thereby neutralise genuine price competition.
Market allocation is also prohibited, and one form of this may involve labour market allocation through non-poaching agreements, where employers agree not to recruit each other’s employees. Market allocation may also take the form of athlete sharing between clubs. ‘It is important for sports clubs to recognise that they are considered undertakings within the meaning of competition law and are therefore required to comply with its principles,’ Lepikult noted. Agreements that exclude or prevent clubs from freely recruiting players and employees may significantly harm competition, thereby limiting career mobility and development opportunities of athletes and coaches.
The Competition Authority recommends that undertakings act independently and refrain from activities that restrict competition or are otherwise harmful to competition. Above all, they must not agree on market allocation and prices or their formation.
The Competition Authority awaits information about any possible violations of competition laws. Tips can be submitted anonymously via the Authority’s website. If a tip is provided by a party to the transaction, they may be eligible for the leniency programme. Under this programme, undertakings that have participated in competition-restricting agreements and provide the Authority with sufficient information about them may receive full or partial exemption from penalties. More information about the leniency programme can be found here.
The Competition Authority exercises regulatory supervision over competition, electricity, natural gas, district heating, postal services, the public water supply and sewerage systems, the railway, aviation, and ports. It also prevents unfair trading practices in the agricultural products and food supply chain. The Authority operates under the Ministry of Justice and Digital Affairs.