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The CC Fines for Prohibited Agreement in Contracts between Anchor Tenant and Owner of Shopping Malls



On 8 April 2011 the Competition Council (CC) adopted a decision establishing the existence of a prohibited agreement between retail chain (Rimi group) and lessor of selling space in shopping malls Marno J Ltd. The agreement consisted in a prohibition to lease selling spaces to other undertakings without the permission of Rimi group and in restricting the ability of competing specialised food shops to commence economic activity in particular shopping malls.

Thus, for the agreement on action (inaction), due to which the entry of a potential market participant into a relevant market is made difficult, the enterprises were fined € 232 113. The CC also imposed a legal obligation to terminate the infringement by excluding the restricting paragraph from the contracts with Marno J Ltd. as well as with other lessors of selling places.

During the investigation the CC concluded that contracts between Rimi group and Marno J Ltd. not only affected potential tenants, but also restricted the rights of the lessor to manage its business independently. By keeping the specialised foods shops out of shopping malls, their development is hindered. Moreover, by hindering the ability of producers to create effective alternative distribution channels (specialised shops), their dependence from the large retail chains is strengthened.

Rimi group with its retail chain RIMI Latvia Ltd. and low cost retail chain Supernetto Ltd. is one of two biggest retail chains in Latvia and together with its competitor Maxima Latvija Ltd. possesses over 60% of market shares.