Competition Commissioner Appointment Null & Void
The Supreme Court has overturned 42.9 million euros in fines on four fuel companies on the basis that the procedure the government used to appoint Competition Protection Commissioner Costakis Christoforou was flawed.
The decision has left the government - and the now ex-Commissioner - clearly nonplussed.
"The whole matter is in the hands of the government, which will inevitably react with the advice of the legal service of the Republic," said Christoforou in comments to CyprusNewsReport.com.
Speaking from the Commission for the Protection of Competition (CPC), Christoforou commented that he cannot do anything about the Court's decision about his position and complies fully with it: "you caught me in my office by accident, I was on my way home," he said.
"The decision is final and conclusive, and since the decision says my appointment is null and void, my position is non-existent. The government has to appoint or re-appoint according to the proper procedure," he said.
The CPC is an independent body responsible for investigating anti-competitive practices such as monopolies or abuses of dominant positions by companies. It works in parallel with the European Commission, and in certain situations, cases can be referred to the EC for rulings.
Critics of the Court's decision say that it has undermined an independent body and the government without dealing with the substantive issue at hand - namely whether the petrol companies abused their market position by fixing retail prices in a cartel-type manner.
"This decision should be taken seriously by the government and Cypriot people, it adversely affects all pending proceedings before the Commission and will adversely affect healthy competition in our country," said DISY MP Averoff Neophytou.
"This is a time when procedures for consumer protection should be shielded, and not leave consumers unprotected," said Neophytou.
The most serious consequence of the decision is that it leaves the Commission leaderless and it will require several years to reconsider cases from scratch and make rulings, said Neophytou.
The government's legal service said it was evaluating the Supreme Court's decision in order to recommend appropriate action. In other reactions, government spokesman Christos Christofides said that each appointment is made after due consideration of qualifications and that the development will hamper the CPC's ability to make decisions in the future..
President Demetris Christofias has been informed and decisions on the matter will be made after he comes back from Australia, said the spokesman.
It's not about qualifications
According to Christoforou, the Court's decision is not about his qualifications, but about the procedure to appoint him.
"Nobody has questioned my qualifications until now," he said.
The former commissioner has a B.A. (Law) (Hons) and did postgraduate studies at the Institute of Advanced Legal Studies in London on the subject of Legislative Drafting and Public International Law. He also has an LLM in European Law and Management from Leicester University. For 12 years he was the Secretary General of the House of Representatives. He was the Director of the Parliamentary Committees Services, Chairman of the Secretaries-General Association and Advisor on the application of the new Election Law of Cyprus.
But according to the Supreme Court, all these qualifications and experience count for nothing, because the procedure in which Christoforou was appointed failed to specify his expertise.
Score for cartels, monopolies?
During its investigations into anti-competitive practices, the CPC has confronted some major players in Cyprus' small market, including the milk industry, petrol and fuel supplier industry, and large mergers by Swissport and Hellenic Mining Co.
As the island struggles to make the transition from a closed, monopolistic market to an open market that is a member of the EU, it faces resistance and legal fights from entrenched business interests that are reluctant to give up their grip on power. The stakes have been made even higher amid difficult economic circumstances.
There is no doubt that the Supreme Court's decision and the petrol companies' fight against the CPC's fines for anti-competitive practices have undermined the institution. But looking at the long term, it is arguable that this is just a low blow...not a total knock-out, and certainly not the end of the battle.