The competition watchdog (CPC) has fined two companies with a €20.7 million fine for restricting the distribution of genuine Mercedes-Benz parts in the Cypriot market, it was announced on Friday.
In its April 23 decision, the CPC fined Mercedes- Benz owner Daimler AG and Cyprus Import Corporation (CIC), the local dealership, €20mln and €700,000 respectively after it found them in violation of competition laws.
The fine followed an investigation into a complaint lodged in 2011 by spare parts importers Kapodistrias and Kyros Auto Service.
Kapodistrias and Kyros used to import genuine Mercedes parts from overseas suppliers but were unable to do so after Daimler applied a selective distribution system for its parts.
After the decision “sale of genuine parts by the official network is allowed only to members of the network, i.e. CIC, in the Cypriot market, and authorised distributors and repair shops, as well as car owners through independent garages.”
“The CPC also noted that CIC, just before the implementation of the selective distribution system, held exceptionally high … market shares.”
After the system was applied, CIC acquired monopoly status, the CPC said.
The CPC concluded that CIC knew, as the general distributor, that it would be the only member of the system of selective distribution in the Cypriot market, and despite being able to, it had not appointed other authorised dealers, but chose to remain the sole distributor in the market.
“In addition, the commission unanimously judged that Daimler failed to ensure the proper implementation of the selective distribution system in the Cypriot market, and its actions and or omissions, based on the agreement with CIC, led to the limited availability of genuine parts bearing the logo of the manufacturer of Mercedes-Benz vehicles,” the CPC said. “The system of selective distribution could have been implemented in the Cypriot market without any restriction or control of production of supply.”