Competition watchdog fines Knauf, Poland's Norgips with €1.6m

The Competition Council has imposed a fine of €1.6 million on Knauf building materials distributor and Poland's Norgips sp.z.o.o, the parent company of Norgips, which is a Knauf Group subsidiary, the council told LETA Wednesday.

The Competition Council found that the two companies have been violating fair competition rules by abusing their dominant market position.

The Competition Council says that from 2009 to 2014 the companies offered a loyalty-promoting discount system to their clients - Latvia’s largest retailers of construction materials - restricting the retailers’ possibility to choose alternative suppliers and preventing rival companies from entering the market.

The Competition Council has fined the two companies with EUR 1.6 million for using their dominant market position to apply the loyalty-promoting discount system.

Knauf has been fined with €965,548, and Norgips sp.z.o.o, the parent of Norgips, has been ordered to pay €655,850 for the violations.

Both companies can appeal the fines in court, but they are still legally obliged to end their competition-crippling practices and stop offering the discounts.

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