According to section 3(1) of the Protection of Competition Law of 2022 (Law 13(I)/2022), all agreements between undertakings, all decisions by associations of undertakings and any concerted practices which have as their object or effect the prevention, restriction or distortion of competition within the Republic, shall be prohibited, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investments;
(c) share markets, geographically or otherwise, sources of supply;
(d) apply dissimilar conditions to equivalent transactions thereby placing certain undertakings at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Nevertheless, according to section 4(1) of the Law, agreements, decisions and concerted practices caught by section 3(1) of the Law, shall be permissible and not be prohibited, no prior to a decision, if they satisfy the conditions set below:
(a) it contributes, with the reasonable participation of the consumers, in the resulting benefit, in the development of production or distribution of goods or in the promotion of technical or financial development;
(b) it does not impose on the undertakings concerned, restrictions unless they are absolutely necessary for the achievement of the above mentioned purposes; and
(c) it does not afford the undertakings, to which the agreement relates, the possibility to eliminate competition from a substantial part of the market product concerned.
Where the Commission decides that an agreement, decision and/or concerted practice does not fulfill the conditions set in section 4(1), above, then the agreement, decision and/or concerted practice is illegal and void on the basis of section 3 of the Law.
Pursuant to section 5(1) of the Law, the Council of Ministers, following a previous reasoned opinion of the CPC, may issue an Order, published in the official gazette of the Republic, exempting the application of section 3 of the law to specific categories of practices.
Moreover, according to subsection 2 of the above section, practices for which the national legislation is applied and not the community law on competition, then the Regulation issued pursuant to Article 101(3) of the TFEU is applied proportionately, as long as it does not come in conflict with an Order issued on the basis of section 5(1) of the Law. In such case the practices are legal and valid according to the Community Regulation that regulated the category of practices on the basis of EU competition law. In case it does not fall within the category of agreements provided for by the Community Regulation, then the practice falls under section 3 of the Law and is subject to prohibition and invalidity.
The burden of proof rests on the undertakings or association of undertakings invocating section 4 and 5 of the Law
Copyright © Republic of Cyprus 2023,
Commission for the protection of Competition
Designed and Developed by the Department of IT Services