The Commission for Protection of Competition (hereinafter the “Commission”) has the exclusive competence for the harmonious operation of the market, within the provisions of competition law, away from any anticompetitive distortions, aiming to boost economic growth and social welfare.
The Protection of Competition Law 13(I)/2022 in conjunction with the Control of Concentrations of Enterprises Law 83(Ι)/2014, place the rules and principles which aim the maintenance of effective competition within the market of Cyprus. The laws entrust the Commission with the obligation for the fulfillment of this aim that is to create the conditions for the consumers to be offered higher quality of goods and services at competitive prices. In that way, enterprises’ productivity and investments are increased as well as the creation of such conditions for research, innovation and technological progress.
The Commission for Protection of Competition was established in 1990 with the enactment of the Protection of Competition of Law 207(I)/89. The law in question was abolished with the enactment of the Protection of Competition of Law 2008 (Law number 13 (I) /2008) that was amended by the Law 41(Ι)/2014.
As of 23rd of February 2022, the new Protection of Competition Law of 2022 (Law no. 13 (I) / 2022) entered into force, repealing the previous ones.
The Protection of Competition Law 2022, inter alia, designates the Commission as the independent competent competition authority of the Republic.
The Commission applies Sections 3 and 6 of Law 2022, in regard to the prohibition of restrictive practices at national level. Section 3 prohibits agreements among undertakings, decisions of associations of undertakings and any concerted practice which have as an object or effect, the obstruction, restriction or distortion of competition within the Republic of Cyprus. Section 6(1) prohibits the abuse of the dominant position held by one or more undertakings in the entire or in part of the relative product market. Section 6(2) prohibits any abuse by one or more undertakings, of a relationship of economic dependence where an undertaking stands compared to that or those undertakings, which can be either a client, supplier, producer, representative, distributor or commercial collaborator, even as far as a specific kind of products or services is concerned, and when there is no equal alternative solution.
In addition, European competition law and in particular Regulation (EU) no. 1/2003, entrusts the Commission to apply Articles 101 and 102 TFEU in specific cases.
Pursuant to the Law, the Commission has the exclusive competence to:
(a) investigate and take decisions on the infringement of sections 3 and/or 6 of the Law,
(b) decide whether all the conditions of section 4 of the Law are met so that an agreement, decision and concerted practice which falls within section 3(1) of the Law is valid,
(c) decide whether the concerted practice for which an Order has been requested pursuant to section 5(1) of the Law, falls within the category of the concerted practices provided for in the Order and thus section 3 of the Law does not apply,
(d) decide whether the concerted practice for which there is an invocation of the Community Regulation, pursuant to section 5(2) of the Law, falls within the category of the concerted practices provided for in the Community Regulation,
(e) decide whether an agreement or undertaking does not meet the requirements of the provisions of Section 7 (1),
(f) investigate and take decisions on the infringement of the provisions of Article 101 TFEU and / or Article 102 TFEU, or as otherwise provided by Regulation (EC) No 1/2003,
(g) decide whether all the conditions of Articles 101(3) TFEU are met so that an agreement, decision and concerted practice which falls under Article 101 TFEU is valid,
(h) impose administrative fines and administrative sanctions, as defined by the Law and / or in the Regulations issued under the Law,
(i) decide on interim measures under the provision of Section 34,
(j) withdraw the application of the Exemption Regulation issued by the European Commission in relation to a specific cartel, when the market is the Cypriot market, applying the provisions of Article 29 of Regulation (EC) No 1/2003,
(k) issue informal guidance to public bodies about its competences and powers without this being binding in a later decision,
(l) issue notifications regarding the protection of personal data and inform about the responsibilities regarding the collection and processing of personal data,
(m) issue informal guidance to public bodies about its competences and powers without this being binding in a later decision,
(n) take a decision on commitments in accordance with the provisions of Section 30,
(o) conduct investigation in a specific sector of the economy or in specific types of agreements pursuant to Section 31,
(p) set, by a decision, the criteria for examination of cases in priority, for infringements of sections 3 and/or 6 and/or Articles 101 TFEU and/or Article 102 TFEU pursuant to section 27 of this Law and to examine cases based on these priority criteria,
(q) any other competence provided by the provisions of the Law or the Regulations issued under the Law or national and / or Union legislation.
For every infringement of sections 3 and/or 6 of the Law and of Articles 101 and/or 102 TFEU, the Commission has the authority to impose the following measures:
(a) to impose an administrative fine, according to the gravity and duration of the infringement, pursuant to Section 47,
(b) require that the undertakings or association of undertakings bring the infringement to an end within a set time of period and avoid repetition in the future. Where the infringement has been brought to an end before the decision of the Commission, the Commission may condemn the undertakings with a declaratory decision,
(c) to impose terms and conducts and /or structural remedies, according to the infringement, necessary to bring the infringement to an end:
It is understood that, when choosing between two (2) equally effective measures, the Commission selects the least burdensome measure for the undertaking or association of undertakings, respecting the principle of proportionality.
According to Section 47, if the Commission determines any violation of sections 3 and / or 6 of the Law and Articles 101 and / or 102 of the TFEU, it has the authority to impose administrative fines up to ten per cent (10%) of the turnover of the undertaking, or up to a sum of ten per cent (10%) of the turnover of each undertaking which is a member of group of companies, based on the turnover of the previous financial year of the decision.
In case that the undertakings or associations of undertakings concerned not to comply with the Commission’s decision to terminate the infringement, to avoid a recurrence in the future, or to impose conditions and measures of conduct and / or structural nature, the Commission may impose an administrative fine up to five per cent (5%) of the average daily turnover of the previous financial year of the decision for each day during which the infringement continues.
Administrative fines are also imposed for providing false, incomplete, inaccurate or misleading information or refusing to cooperate with companies, business associations and individuals.
For purposes of imposing administrative fines, the concept of undertakings applies to holding companies and to the legal and/or financial successors of companies. In case that the infringement committed by the association is linked to the activities of its members, the Commission may impose an administrative fine of up to ten percent (10%) of the turnover of each undertaking which is a member of the infringing association of undertakings and active in the market affected by the infringement.
Additionally, in accordance with the provisions of the Interchange Fee for card-based payment transaction Law 75(I)/2018, the Competition Commission is the competent authority for ensuring the implementation of Sections 6, 8, 9, 10 (1) to (3), 11 and 12 of the Regulation (EU) 2015/571 on interchange fees for card-based payment transactions.
Interchange fees are usually applied between the card-acquiring payment service providers and the card-issuing payment service providers belonging to a certain payment card scheme. Interchange fees constitute the main part of the fees charged to merchants by acquiring payment service providers for every card-based payment transaction. Merchants in turn, incorporate those costs, like all their other costs, in the total price of goods and services. Competition between payment card schemes to convince payment service providers to issue their cards, leads to higher rather than lower interchange fees on the market, in contrast with the usual price-disciplining effect of competition in a market economy. In addition to a consistent application of the competition rules to interchange fees, regulating such fees would improve the functioning of the internal market and contribute to reducing transaction costs for consumers.
The Regulation undertakes harmonization of maximum interchange fees, creating transparency, thus allowing merchants to be fully aware of the percentage rates applicable when processing card-based payment transactions, and strengthen competition in the market, thereby providing consumers with a greater variety of choice between different payments cards and service providers.
The Regulation is part of a greater effort to impose measures regarding the promotion of a digital single market, making payments safer and cheaper and opens the way for new innovative payment technologies.
The articles of the Regulation for which the Competition Commission is the competent authority are as follows:
· Article 6 – licensing and prohibition of territorial limitation,
· Article 8 – co-badging and choice of payment brand or payment application,
· Article 9 – unblending (separation of information regarding the level of merchant fees),
· Article 10(1) to (3) – ‘Honour All Cards’ rule,
· Article 11 – steering rules, and
· Article 12 - Information to the payee on individual card-based payment transactions.