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Summary of the Competition Council Plenum Decision no. APD – 17/17-35 din 16.07.2020

           
29.07.2020   1723 Views    

On June 29, 2017, Plenum of the Competition Council, following the examination of the complaint filed by the CTC "Alfa" JSC, initiated the investigation regarding the signs of violation of the provisions of art. 11 para. (2) let. e) of the Competition Law no. 183 of 11.07.2012, by the „Starnet Soluții" LLC and the enterprises that are part of the same group of enterprises regarding the practice of a predatory price for the CATV (Cable Television) analog television subscription in order to eliminate the competitors.

During the investigation, it was determined that the "Starnet Soluții" LLC sells the CATV subscription starting with June, 2014, based on an agreement concluded with the "TV-BOX" LLC. At the same time, it was established that these 2 enterprises form a group of enterprises.

Following the market analysis, it was found that the group "Starnet Soluții" LLC / "TV-BOX" LLC in terms of vertically integrated activity was in the period 2014-2018 in a dominant position on the market of Internet access services in the Chisinau city - the primary market. Due to its dominance on the first market, the group exercised its market power on the secondary market - the market of audiovisual broadcasting services through CATV and IPTV technologies in the area where the group developed its cable TV network.

As for the action regarding the marketing of the CATV subscription at a price of 30 lei per month, following the analysis of the information accumulated during the investigation, it was found that the group pricing policy applied for the CATV subscription did not allow him to cover the average variable costs incurred for a period of approximately 2 years and 9 months, between the third quarter of 2014 - and the first quarter of 2017.

Thus, regarding this particular segment of activity - the provision of the CATV subscription, it was determined that the group "Starnet Soluții" LLC / "TV-BOX" LLC practiced a predatory pricing, deliberately bearing losses in order to consolidate its position on the market of Internet access services, but with effects on the activity of CTC "Alfa" JSC. The plaintiff was deprived of the opportunity to compete effectively in order to protect the existing subscriber base and to acquire potential subscribers to its services in the area where "Starnet Soluții" LLC / "TV-BOX" LLC provide its CATV services, thus, not being able to practice an equally low tariff. The pricing policy applied by "Starnet Soluții" LLC / "TV-BOX" LLC was an element of a competition restriction, which led to a reduction in the plaintiff's market share, with the subsequent risk of eliminating it from the market, thus, being committed an abuse of a dominant position, an action prohibited by the Competition Law no. 183 of 11.07.2012.

At the same time, the Plenum of the Competition Council retained as aggravating circumstance, according to art. 73 para. (2) let. c) of the Competition Law no. 183 of 11.07.2012, the fact of non-cooperation and unfounded delay of the investigation by "Starnet Soluții" LLC / "TV-BOX" LLC through the actions of non-presentation of the requested information and / or actions of presentation of information that misled the Competition Council for about 2 years.

By Decision no. APD-17/17-35 of 16.07.2020 the Plenum of the Competition Council found the violation of the provisions of art. 11 para. (1) and (2) let. e) of the Competition Law no. 183 of 11.07.2012 by the group of enterprises "Starnet Soluții" LLC / "TV-BOX" LLC and applied a fine to the enterprise "Starnet Soluții" LLC in the amount of 2 053 701.62 lei and to the enterprise "TV-BOX" LLC in the amount of 169,239.35 lei.

The decision can be appealed, within 30 calendar days from its receipt, at the Chisinau Court, Riscani headquarters, specialized in administrative litigation (mun. Chisinau, 3 Kiev street).

 

 

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