Hrvatske šume d.o.o. complies with the commitments undertaken regarding the abuse of dominance and a prohibited vertical agreement

The Croatian Competition Agency (CCA) closed the case against the Croatian forestry and woodland management company Hrvatske šume d.o.o. by accepting the implementation of the commitments proposed voluntarily by the undertaking concerned. Concretely, Hrvatske šume undertook to apply equal, clear, and transparent conditions to its buyers – that are at the same time its competitors – when allocating timber assortments quotas in public invitations for the conclusion of framework and annual contracts, which will be monitored by the Office of the Management Board in line with the Compliance Program. In addition, Hrvatske šume undertook to conduct public consultations on the draft Decision on the methods and conditions of sale of timber assortments of Hrvatske šume for each upcoming year on the central state e-Consulting portal for public consultations. Furthermore, Hrvatske šume committed itself to drafting of the Compliance Program – regarding the compliance of its operations with competition rules within three (3) months, i.e., by 6 September 2023 and submit it to the CCA. The Compliance Program was submitted to the CCA on 5 September 2023.

By acting in this manner, Hrvatske šume fulfilled the undertaken commitments listed under the CCA decision, which left no legal grounds for any further actions of the CCA.

The CCA also closed the proceeding against Hrvatske šume and the Croatian Chamber of the Economy – Wood processing Association, by accepting the commitments voluntarily proposed by Hrvatske šume. Thereby Hrvatske šume undertook the commitment not to apply the challenged Article 11.2 of the Letter of Understanding for the conclusion of framework and annual agreements for the purchase of trunks signed on 15 December 2017 and Article 9.2 of the Letter of Understanding for the conclusion of framework and annual agreements for the purchase of cubic timber of 20 April 2018. In addition, it will exempt the Wood Processing Association from the meetings and decision making about the complaints of the customers of Hrvatske šume in the sale of timber assortments. The decision can exclusively be made by the managing body of Hrvatske šume in consultations with the expert staff. Furthermore, the Commission for the monitoring of the sale of timber assortments in public tenders has been established that will decide about the complaints of the bidders.

Finally, within a period of three months (13 September 2023) Hrvatske šume committed itself to introducing a competition compliance training program for managers and employees in contact with competition rules in any segment. This compliance training program includes a Competition Guidebook for the employees, inhouse trainings and for the members of the Commission for the monitoring of the sale of timber assortments and other persons involved in commercial activities with respect to competition rules and relevant mechanisms, the implementation of competition rules in practice, their revision and the appointment of a responsible person in charge of competition compliance matters who would be contacted in case of any competition concerns in the course of their businesses.  By 13 September 2023 Hrvatske šume had to submit to the CCA both the Competition Guidebook and the Training Program, which was complied with by Hrvatske šume on 13 September 2023.

Given the fact that Hrvatske šume implemented the said remedies there has been no legal standing to act against the undertaking in question.

However, should the monitoring procedure with respect to the implementation of the commitments indicate that the undertaking concerned acts contrary to its commitments, such behaviour would constitute an infringement of the Competition Act and the CCA would reopen the case and impose the fine for the infringement concerned.