Hefty fine imposed on committee for failure to act diligently

The Athens Administrative Court of First Instance has imposed a hefty fine on the Competition Committee for failing to act diligently in examining a complaint concerning a well-known coffee brand in Greece (Decision 11967/2009).
In 2002 the Competition Committee received a complaint relating to the Nescafé brand and the alleged unfair practices of the Nestlé Group. The matter remained pending until 2006. The committee justified the delay by stating that it had requested sworn affidavits from key witnesses, and that their refusal to testify had delayed the entire process.
The Administrative Court of First Instance subsequently reviewed the decision of committee, in which the latter had:
  • held that Nestlé Hellas SA was liable for various violations under the national legislation (Law 703/1977) and EU law (Article 82 of the EC Treaty); and
  • imposed a fine of over €30 million on Nestlé.
The court found that the imposition of a fine and other penalties six-and-a-half years after the filing of the complaint was unacceptable.
The court further held that the delay had resulted in the reduction or freezing of the market shares of various coffee brand owners that were competitors of Nestlé. In contrast, during the six-and-a-half-year period, Nestlé had increased its market share by almost 40%, although this percentage fluctuated. The court also stated that the committee's failure to act within a reasonable time had caused losses and damage to the complainant. Therefore, the court imposed a total fine of €100,000 on the committee for failing to act within a reasonable time.
The decision provides valuable guidance as to the potential liability of independent administrative authorities in Greece and their duty to act diligently.
Eleni Lappa, Drakopoulos Law Firm, Athens

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