The Competition Commission imposed a fine of more than 620,000 euros on the children’s toy company Giochi Preziosi, after the company proposed a dispute settlement procedure.
The fine from the Competition Commission amounts to 628,450 euros, because a violation was found in the resale prices of the company’s children’s toys, as it itself imposed them on the stores, thus affecting competition.
The announcement of the Competition Commission on the fine in detail:
The Plenary Session of the Competition Commission (EA), with its 816/2023 unanimous decision, during the simplified Dispute Settlement procedure of article 29a of Law 3959/2011 and in accordance with no. 790/2022 of its decision, accepted the relevant Dispute Settlement Proposal submitted by the company JIOKI PRETZIOZI HELLAS ANONYMOS ETERIA EMPORIAS PENNIDIAS following a relevant Recommendation and imposed a reduced fine for the violation of Article 1 of Law 3959 found, based on the rationale of the Decision /2011 and 101 SLEE, in the amount of 628,450 euros.
In more detail, the reason for the initiation of an ex officio investigation was the sampling of specific codes (products) which show the greatest traffic (popularity), as recorded on the online websites of toy retail stores. For the purposes of the said investigation, an on-site inspection was carried out at the offices of companies active in all levels of the relevant toy market, among which is GIOKI PREZIOZI HELLAS ANONYMOS TOY TRADING COMPANY.
The JIOKI company involved in the process, 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 investigating the possibility of its inclusion in the DTT and filed a relevant request, in accordance with what is provided in par. 16 of the Notice on the procedure dispute settlement.
According to the rationale of the Decision, from the available evidence it follows that the company carried out a single and continuous, in terms of scope, targeting and time sequence and due to the seasonal nature of the product, a practice of determining resale prices, in the context of a vertical partnership, in purchase of children’s games, excluding those related to the use of computers and systems, 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 inter-price competition, while acting as a disincentive to reduce selling prices for the specific product. From the nature and content of the evidence in the case file, it can be concluded that the fixing of resale prices of the products was implemented in practice.
The Plenary of the EA, by virtue of par. 35 of no. 795/2022 of its Decision, decided to accept, in accordance with the reasoning of the Reporter’s Report, the Dispute Settlement Proposal submitted by the above company and to issue a decision according to which:
It finds that the company GIOKI PRETZIOZI HELLAS ANONYMOS ETERIA EMPORIAS PECHNIDION violated Article 1 of Law 3959/2011 and 101 of the TFEU due to its participation in a prohibited vertical partnership by virtue of the practices briefly described in the Recommendation, in the context of the Dispute Settlement Procedure.
Obliges the aforementioned company to cease, if it has not already done so, and to refrain in the future from the established practice of determining resale prices, as above 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 recalled 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 procedure and the consequent definitive declaration of acceptance of the violation found.
#Mammoth #fine #Competition #Commission #childrens #toy #company
**Interview with Dr. Maria Rossi, Competition Law Expert**
**Interviewer:** Thank you for joining us today, Dr. Rossi. We have just seen the Competition Commission impose a fine of over 620,000 euros on the toy company Giochi Preziosi for violating resale price regulations. Can you explain the implications of this decision?
**Dr. Rossi:** Absolutely, and thank you for having me. This decision highlights a significant issue regarding vertical agreements in the retail sector, particularly with how manufacturers dictate resale prices. By imposing these prices on stores, Giochi Preziosi not only stifled competition among retailers but also potentially limited consumer choices and led to higher prices across the market.
**Interviewer:** What can you tell us about the nature of these violations?
**Dr. Rossi:** The investigation revealed that Giochi Preziosi engaged in a practice where they dictated resale prices for their toys. This contravenes Article 1 of Law 3959/2011 and Article 101 of the TFEU, which prohibit agreements that restrict competition. Resale price maintenance is a classic example of a practice that restricts market dynamics, disallowing retailers to set their own prices based on market conditions.
**Interviewer:** The company opted for a dispute settlement procedure. How does that process work, and why might companies choose it?
**Dr. Rossi:** A dispute settlement procedure allows companies to seek some leniency in fines and resolve legal challenges without lengthy litigation. In this case, Giochi Preziosi’s participation in the process suggests their willingness to acknowledge the violation in exchange for a reduced penalty. This often results in quicker resolutions and can be beneficial for both parties involved, although it does not absolve the company of wrongdoing.
**Interviewer:** The fine of 628,450 euros was reduced due to the dispute settlement. How typical is this in competition cases?
**Dr. Rossi:** It’s quite common for companies to receive reduced fines if they cooperate with authorities and acknowledge their violations. This system encourages self-reporting and compliance, as the ultimate goal is to foster a competitive marketplace. However, the fines, even if reduced, serve as a reminder to companies about the importance of adhering to competition laws.
**Interviewer:** what can other companies learn from this case?
**Dr. Rossi:** The key takeaway is the importance of understanding and complying with competition laws. Companies need to ensure their pricing strategies do not infringe upon these regulations. Implementing robust compliance programs and regularly training staff on legal obligations can help prevent future violations and the associated financial and reputational damage.
**Interviewer:** Thank you for shedding light on this important issue, Dr. Rossi. It’s always valuable to hear expert insights on how organizations can navigate complex legal landscapes.
**Dr. Rossi:** Thank you for having me. It’s been a pleasure to discuss this topic.
