The objectives of the two Acts are divergent: The primary goal of Act 146/1914 is to protect competitors. The protection of consumers and the general economic interest against unfair trade practices is an indirect goal pursued through the protection of competitors. On the contrary, Act 3959/2011, following its EU model, aims at protecting competitors and consumers as well as market structure and, in so doing, competition as such.
In view of their different objectives it is not surprising that the assessment criteria of the two Acts are also different: Act 146/1914 introduces ethical criteria not directly related to the impact of the entrepreneurial conduct in question on competition, while the criteria of Act 3959/2011 are (with the exception of the per se prohibitions) based on the assessment of the conduct’s effects on competition using the tools of economic analysis.
A further difference between the two Acts relates to their enforcement institutions: While civil courts are entrusted with the enforcement of Act 146/1914, the enforcement of Act 3959/2011 is primarily assigned to the Hellenic Competition Commission (HCC), an independent administrative authority. Although Act 3959/2011 relies more on public enforcement, art. 35 para. 2 grants civil courts jurisdiction not only on follow-on claims but also on claims seeking damages as well as cease and desist orders for the infringement of articles 1 and 2 Act 3959/2011.
A special case of unfair trade practice lying between the two Acts is that of art. 18a Act 146/1914 prohibiting the abuse of the state of economic dependence. The provision was formerly a part of Act 703/1977 (as art. 2a) but has been rightly transferred to Act 146/1914 as it deals rather with bilateral disputes than with conduct with a substantial impact on competition.
Competition law amidst Economic Crisis
Act 3959/2011 adopted Greek competition rules to Regulation 1/2003. Thus, restrictive agreements are no more notifiable but subject to self-assessment of the parties, the obligation to notify smaller scale concentrations has been abolished, a five-year limitation period for the imposition of penalties for infringements of the Competition Act has been introduced, while it has been expressly provided that the Block Exemption Regulations are to be applied by analogy in cases of agreements which are unlikely to affect EU trade. In addition, sanctions for non-compliance have become stricter with natural persons liable for compliance with the competition rules facing administrative fines and criminal sanctions (criminal fines and, in case of participation in cartels, imprisonment of at least two years). Indeed, Act 3959/2011 seems to provide HCC all modern tools to deal with restrictions of competition efficiently. It is quite ironic that Regulation 1/2003, which narrows the scope and the importance of national competition laws, has at the same time contributed to the improvement of the Greek competition law and its enforcement Authority.
Nevertheless, changes of the economic environment have shown that a certain degree of independence of member states’ legislation from the EU model may in some cases be necessary. Such a case appeared in Greece. Since the preparation of Act 3959/2011 the financial crisis has deepened. Most sectors of the economy have been hit by lack of liquidity. As (almost) always in times of financial difficulty, there have been voices advocating a more lenient application of competition law. The experience gained by the “National Industrial Recovery Act”, introduced in the US in 1933 as a means to overcome the crisis of 1929 by encouraging pricing agreements competition, proved that the need to protect free competition in no lesser in times of crisis. The question is whether this conclusion applies to the same extent to restrictive practices and concentrations.
The acquisition of majority shareholdings in the Greek banks by the Hellenic Financial Stability Fund, necessary in order to ensure the banks’ recapitalization, has raised questions on the application of competition law which have not been dealt with by the HCC in a satisfactory way. More important is the evaluation of mergers between undertakings in difficulty (directly or indirectly) required by banks as a prerequisite for their further financing. Such market conditions, quite often in today’s practice, cannot be taken into account in mergers expected to significantly impede competition, as the assessment criteria within the merger control may only be competitive. A solution could be given by political decisions authorizing mergers prohibited by the CC but justified by an overriding public and social interest. Art. 4c par. 3 Act 703/1977 (the equivalent of sec. 42 of the German GWB) providing for such a solution has been abolished by Act 3959/2011 for reasons which are not quite clear. The Greek legislator’s intention to adapt the national competition rules to the EU model this time went further than necessary. By abolishing the possibility of authorizing mergers by ministerial decisions, the legislator deprived Greek competition law enforcement of a useful tool, which could offer balanced answers to questions arising from the economic crisis.
