The CPC, having evaluated all the evidence before it, unanimously decided that an infringement of section 6(1)(b) of the Law was constituted by POC.
The subject of the case laid on the complaint dated 31st of August 2012 filed by Lanitis Bros Ltd regarding the possible infringements by POC of sections 6(1)(b) and 6(1)(c) of the Law and article 102 of the Treaty For the Functioning of the European Union.
The CPC, with its decision dated 12 April 2013, unanimously concluded that POC, which holds a dominant position in the relevant market of the supply of raw cow milk, impliedly refused transactions with the complainant by imposing restrictions to the supply of raw cow milk, to the detriment of the consumers, by affecting consumers΄ choice and limiting access to Lanitis fresh pasteurized milk, in breach of section 6(1)(b) of the Law. In relation to the alleged application of section 6(1)(c) of the Law, the CPC unanimously concluded that the requirements of that section are not fully fulfilled. As far as the application of article 102 of the Treaty For the Functioning of the European Union is concerned, the CPC having taken into account all the facts concerning this case, concluded that there is no evidence that POC affects the intra-community trade in any substantial way in areas or against customers who may be the target of competitors from other Member States in the supply of raw cow milk, and that dairy goods from raw cow milk are produced only within the Republic of Cyprus.
The CPC, in light of the written submissions of POC and having taken into account the importance and duration, the nature and seriousness of the infringement,as well as any mitigating or aggravating conditions, unanimously decided, according to the procedures of sections 24(a)(i) and 42(1) of the Law, on the amount of the administrative fine.
The CPC, in examining the amount of the fine, further noted the following:
a) Raw cow milk is essential for the operation of the complainant.
b) POC holds a dominant position in the wholesale market of raw cow milk, and was obliged to respond to its special responsibility, by acting in a way that would not distort competition in the downstream market of the production of dairy goods from raw cow milk. POC΄s restriction of supply to Lanitis makes the infringement of the Law more severe, since POC is active in the downstream market through its subsidiary company, Papouis Dairies Ltd.
c) Taking into consideration the production quota, the sensitivity of fresh cow's milk, the fact that it is impractical to import it from another country and the dominant position of POC the Commission concludes there are no viable alternatives to the complainant. d) Despite the short duration of the infringement of one month, the actions of POC, as evidenced by articles in the Press, resulted in milk shortage with an immediate impact on the market and the consumers in general.
e) The company under investigation has not been convicted in the past for similar violations of the Law.
f) The POC, having appeared before the Commission in a number of cases, was or should have been aware of its obligations in respect of competition Law enforcement.
In exceptional cases, the Commission may take into consideration the undertaking's inability to pay a fine. A reduction is granted only on the basis of objective evidence that an imposition of a fine would jeopardize the economic viability of the undertaking concerned.
The Commission took into account the position of POC in relation to a reduction of the fine and specifically the impact of the recent economic developments on POC, and requested evidence of its declarations, which the POC sent.
The Commission, in exercising its discretion, took into account the impact of the recent economic crisis in the banking sector in Cyprus and the effect it had on POC, based on data sent, but also the fact that, based on case law, the Commission is not obliged to consider any negative effects on a business in setting a fine. The Commission imposed the fine after having evaluated the evidence supplied by the POC along with all the other factors mentioned above.
The Commission, taking into account all the above, and acting on the basis of Section 24 (a) (i) of the Law, in respect to the infringement of Section 6 (1) (b) of the Law, unanimously decided to impose an administrative fine on the Pancyprian Organisation of Cattlefarmers (POC) Public Ltd of two hundred seventy-six thousand and eight hundred thirty-two Euro (€276.832).