TGS Baltic Successfully Represented Eesti Post in Estonian Competition Authority’s Proceedings

02.03.2021 TGS Baltic Successfully Represented Eesti Post in Estonian Competition Authority’s Proceedings

Law Firm TGS Baltic’s competition practice senior associates Katri Paas-Mohando and Triinu Järviste represented Eesti Post in the Competition Authority’s supervision proceedings, which were based on a complaint submitted by direct marketing company Target Master.

Target Master’s complaint was caused by the decision of Target Master’s former client Jysk Linnen’n Furniture OÜ (hereinafter Jysk) to change their service provider. Until March 2020, Target Master provided home delivery of unaddressed advertising to Jysk, whereas Target Market outsourced this service from Eesti Post. However, in 2019, Jysk carried out a procurement procedure for the purchase of direct marketing services. Eesti Post prepared the tender which they submitted to participate in the procurement in cooperation with TGS Baltic to ensure compliance of their activities with legal acts, and Eesti Post’s tender was declared successful.

In their complaint to the Competition Authority, Target Master claimed that Eesti Post’s price formation is discriminatory for the purposes of the prohibition to abuse the dominant position arising from the Estonian Competition Act since a more favourable price applies to one client in comparison to others. Target Master also found that Eesti Post excludes Target Master from the market since the latter cannot profitably offer Jysk a price that is more favourable than the price offered by Eesti Post.

The Competition Authority thoroughly analysed the claims included in the complaint but did not establish any violations in the activity of Eesti Post. The Competition Authority explained in their decision that in the event of published price lists, a dominant undertaking is not under the obligation to strictly adhere to these price lists. In certain cases, prices that differ from price lists and the application of different prices to clients may promote competition. This does not mean that dominant undertakings are completely free in their price formation and they are subject to several restrictions under the Competition Act; however, in the current case, there was no reason to criticise Eesti Post for anything. Therefore, the Competition Authority did not find it necessary to determine the relevant goods market or establish whether Eesti Post is a dominant undertaking at all since, in any case, there was nothing abusive in Eesti Post’s activities.

Senior associate Katri Paas-Mohando who advised Eesti Post in both preparing the tender submitted to Jysk and proceedings of the Competition Authority commented on the decision: “The decision of the Competition Authority is important not only to Eesti Post but also to other undertakings who must consider increased requirements applicable on dominant undertakings. This sends an important message that if an activity is thoroughly analysed, there is room for competition even under the stiff and strict rules which prohibit abuse.”