Undertakings, being small or large, may affect the position of consumers directly (i.e. by, in their relationship with the consumers, taking advantage of the fact that consumers may purchase a specific goods or services only from one or smaller number of vendors) or indirectly (i.e. by concluding, with their competitors or business partners – suppliers, producers, sellers, the agreements that restrict or reduce the ability of free market participation).
With their actions undertakings may hurt the consumers in both instances. As a result of the undertakings' actions that are contrary to competition rules, market may be affected by various anomalies, asymmetry of information and abusive practices, which may all result in the worse position of the consumers. Typically, negative effects of such behaviour are higher market price for goods or services (higher than it would have been if the competition would indeed be free) or worse conditions of purchase of individual product or order of individual service (i.e. shorter guarantee periods, reduced quality of the products, absence of innovative/new products, etc.).
Abuse of dominant position
The undertaking, which hold a dominant position (by rule this means that it holds a market share higher than 40 %), may restrict natural conditions of competition by unilateral actions (without regard to competitors or consumers), i.e. by preventing access to the market to its competitors or by arbitrarily setting the price, without being threatened by competition from other comparable undertakings.
Typical signs of the existence of a dominant position of a specific subject (and abuse of such position) are for example:
- sudden and substantial changes of business conditions to the detriment of consumers (an undertaking acts as if it would not have been worried that consumers will stop purchasing its products or order its services);
- sudden and unjustified price increase for the goods and services (an undertaking sets the price for the goods and services above the unreasonable level);
- discrimination of consumersby the place of their purchase or by other criteria (sometimes the discrimination may be justified, however undertakings often discriminate consumers with the aim to exploit the elasticity of demand between different groups of consumers);
- although consumers abroad have access to a variety of different products and services that are interchangeable, consumers in Slovenia have access to smaller number of interchangeable products and service;;
- when a new product is launched abroad, such product becomes accessible to Slovenian consumers only after a certain period of time (when the product has already been available to consumers in comparable countries) (an undertaking inhibits or prevents entry of a new competitor on the market).
Restrictive agreements
Free market participation may also be restricted by various agreements between undertakings and/or groups of undertakings. Such agreements may be of horizontal nature (so called cartel agreements) or of vertical nature (agreements between undertakings active at different levels of value chains – an agreement between the producer and distributor; agreement between distributor and retailer; etc.):
Cartel
Horizontal restrictive agreements (entered into by and between competitors) are also called cartel agreements. These are actions of two or more undertakings, the aim of which is coordination of their behaviour on the market or influencing the competitive process by fixing or coordination of purchase or sale prices or other conditions of doing business. Cartel agreement is also an agreement between two or more undertakings that they will not sell their products to a specific undertaking (so called collective boycott).
If competitors enter into an agreement how they will act on the market, if they agree on the production quantities, if they exchange information on anticipated marketing activities and similar, the consequence of such actions usually is worse position of consumers (from the perspective of accessibility of a specific goods or services, which enables members of a cartel to maintain a specific price level; from the perspective of price level maintenance that would decrease in competitive market; from the perspective of other business conditions in relation to which cartel members would normally compete for the clients; from the perspective of lesser innovativeness, since cartel members are not motivated to invest in the development of new products as cartel arrangement provides a certain level of security and knowledge that competitors will not enter the market with better products; etc.).
Vertical agreements
Vertical agreements are agreements between undertakings active at the different levels of value chains (producer – distributer; distributer – retailer; etc.). By these unlawful agreements an undertaking imposes limitations on its contractual partner that the later may not sell its products to other undertakings, whereas in doing so it may for example restrict its competitors from accessing the resources necessary for competitor's products. Unlawful vertical agreements also represent a tool by which undertakings restrict their buyers (distributers or retailer) in cross border sales, which leads to geographical price discrimination (for example the product is more expensive in Slovenia than in countries with higher living standard). Furthermore, the undertakings can successfully maintain a specific pricing policy by means of unlawful vertical agreements (for example by way of resale price maintenance mechanisms). All these actions may in one way or another be reflected in higher prices of products or services or in worse conditions under which consumers may purchase these products or services and as a consequence of that consumers are ultimately harmed.
All of the above may be summarized so that typical signs of the existence of restrictive (horizontal or vertical) agreements are for example:
- same prices for goods or services at different competing undertakings (this may be a sign of explicit agreement between the undertakings that they shall maintain a specific price level; same prices may also be a sign of tacit collusion between the undertakings; same prices may also be the result of combination of various restrictive agreements – whereas each of these behaviours is prohibited);
- Price for a product or service in Slovenia significantly deviates from the price in another country,especially if the price is disproportionate to the living standard in a specific country (for example the products is far more expensive in Slovenia than in Germany);
- specific product may not be ordered at a foreign online platform if the consumer (purchaser) is from Slovenia;
- offerors of products or services may refuse the order of a product or service without any justifiable reason.
Up until now the detection, discovery and sanctioning of the above infringements was mostly in the hands of the competent regulatory bodies, such as Slovenian Competition Protection Agency and European Commission. With the adoption of the Collective Actions Act, the detection, discovery and repayment of damages was also put in the hands of consumers, which exercise their rights in uniform and collective proceedings through a representative organisation, such as institute KOLEKTIV 99.
In case you are of the opinion that that you have been harmed by the above listed or similar behaviour, which is the consequence of competition law infringements, and you believe that it is likely that other consumers have also been harmed by the same or similar behaviour, you may get in contact with us with the proposal to pursue your rights with a collective action.
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