New law will enforce administrative investigation of cartel agreements

Gas station.
Gas station. Source: Priit Mürk/ERR

The government received a draft law from the Ministry of Justice to tighten competition oversight, transposing this Eurodirective as the last country in the European Union. Cartel and competition violations will be treated as administrative procedures under the new law.

On Friday afternoon, while "AK" was filming the pricing of gas stations, they remarkably became ten cents lower at the same time in all gas stations. Competition supervision must be strengthened precisely to detect anomalies of this its very nature, and not only cartels.

"We are already dealing with anti-competitive agreements and looking into potential violations, but we are doing it through several different procedures. In the future, we will have a single compact toolkit, and I dare to say it will give Estonia better instruments to fight the bad guys. The procedure will become more straightforward for people who willfully violate the rules and more efficient for the competition authorities," Evelin Pärn-Lee, director general of the Estonian Competition Authority.

Similarly, uniform pricing for various products in retail chains, as well as suspected misuse of a monopolistic position in the market, require the competition authority's attention.

Rimi Estonia said that they have nothing to hide about their pricing and are willing to cooperate with the competition authority. They have previous experience from Latvia and Lithuania, where this Eurodirective has already been implemented.

"Rimi does not need to consult with any of its competitors about price. We are quite data-driven, and we have a unique pricing scheme in place. We have fully eliminated the human aspect from pricing; we have nothing to be worried about and are happy to collaborate," Kristel Mets, CEO of Rimi Estonia, said.

The implementation of the Eurodirective in Estonia was delayed for a long time because the Bar Association was opposed to the new format of proceeding. Previously, competition violations were examined as misdemeanors, which might lead to criminal prosecution; but, under the present draft, businesses can be punished as much as 10 percent of their annual revenue in administrative processes.

Following the spring coordination round, the draft bill was fine-tuned. For example, the exchange of information between a company subject to proceedings and its lawyer is fully protected. The competition authority is banned from fishing for information, but it request specific information.

"The competition authority may indeed ask for data, and this data may also include information that gives the competition authority a big-picture view that there may be an infringement, but it is the competition authority that has to do the work and also establish the fault of the company. The company itself does not have to admit guilt," Heddi Lutterus, undersecretary for the Ministry of Justice, said.

The document has already been forwarded to the government. However, due to the filibuster in parliament, it is not clear when it will become law. Estonia will is fined €600 per day from February 4 2021 onwards for failing to implement a directive on time. To date, the fines have totaled €600,000.

"There is no getting out of this obligation. We will find out the final amount when the Court of Justice of the European Union issues its decision," Lutterus said.


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Editor: Marko Tooming, Kristina Kersa

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