Competition

Which are the main atributions of Competition Council in the field of anti-trust?

   Competition Council:

·         conducts investigations, upon its own initiative or upon a complaint, intimation or notification, regarding the enforcement of arts. 5, 6, 12 and 15 of the law;

·         issues decisions, according to the law, regarding the violations of arts. 5, 6, 9, 12 and 15 of the law, found after investigation by the competition inspectors;

·   issues decisions to grant individual exemptions for agreements, decisions taken by associations of undertakings or concerted practices which qualify under art.  5 par. (2) of the law;

·         certifies, upon request by involved parties, that there are no grounds for its intervention regarding a particular practice;

·         issues decisions in cases of economic concentration;

·         conducts investigations aimed at a better understanding of the market;

·         issues binding opinions for drafts of normative acts that may have an anticompetitive impact and makes proposals to modify those acts that have such an effect;

·         notifies the Government on cases of intervention in the enforcement of competition law by central and local public administrative bodies;

·         makes recommendations to the Government and to the local public administrative bodies to adopt measures that benefit market and competition development;

·         adopts regulations and guidelines to enforce the provisions of Competition Law no.21/1996 (republished);

·         represents Romania and promotes the exchange of information and experience with international organisations and agencies in the field, and cooperates with international and EU competition agencies;

·         sets and approves the mission, the general strategy and the agenda of the competition authority.

How can one notify the Competition Council in case of an alleged infringement of Competition Law?

The interested natural or legal persons affected by an alleged infringement of Competition Law may lodge a complaint with the Competition Council in accordance with the provisions of the „Regulation on the application of art.5 and 6 of the Competition Law no.21/1996, with further amendments and completions, regarding the anticompetitive practices in case of complaints”, published in the Official Gazette of Romania, Part I no. 430 from 13/05/2004.

What is the legal framework for anti-trust in Romania?

Competition Law no. 21/1996 – entered into force on February 1^st 1997. The law was modified and completed several times in order to comply with the acquis;

Secondary legislation – consisting in regulations and implementing guidelines adopted by the Competition Council.

Which acts and deeds fall within the scope of the competition law?

Competition Law applies to any acts and deeds that have as an object or may have as an effect the restraint, prevention or distortion of competition, committed by: undertakings or associations of undertakings (natural persons or legal entities – of Romanian or foreign citizenship, respectively of Romanian or foreign nationality) or by central or local public administrative bodies.

Competition Law prohibits:

·         anticompetitive practices:

-          anticompetitive agreements;

-          abuse of dominant position;

·         economic concentrations that lead to the creation or consolidation of a dominant position;

·         any actions of central or local administrative public bodies that have as an object or may have as an effect the restriction, prevention or distortion of competition, especially by:

-          making decisions which limit the freedom of trade or the undertakings’ autonomy;

-          setting discriminatory business conditions to undertakings

Which anticompetitive agreements are

prohibited by Competition Law no. 21/1996?

Article 5 par. (1) of the law  prohibits:

- agreements concluded between undertakings

- decisions issued by associations of undertakings,

- concerted practices

that have as an object or effect the restraint, prevention or distortion of competition on the Romanian market or a part of it.

The most harmful anticompetitive agreements are the cartels - secret  agreements concluded between competitors, aimed at price fixing,  limitation of production, market allocation, customers allocation etc.

What is the Leniency policy?

Leniency policy is a set of rules (conditions and criteria) adopted by the Competition Council. Leniency policy is aimed at encouraging the undertakings involved in anticompetitive agreements in the form of cartels to cooperate with the antitrust authority, for discovering and finding supporting evidence in cartel cases.

The first undertaking informing Competition Council on the existence of a cartel will benefit from immunity from the fine, or reduction of the overall fine.

What is the abuse of dominant position?

Art. 6 of the law prohibits any abuse of a dominant position held by one or more undertakings on the Romanian market or on a substantial part of it, by resorting to anticompetitive deeds, which have as an object or may have as an effect the distortion of commerce or the prejudice of consumers.

The most frequent forms of abuse of dominant position consist in: imposing prices or tariffs, refusing to deal with certain undertakings, limiting production etc.

What is the economic concentration?

Art.12 of the law prohibits any economic concentration that, having as an effect the creation or consolidation of a dominant position, lead to or is likely to lead to a significant restriction, prevention or distortion of competition on the Romanian market or on a part of it.

The concept of economic concentration includes the following categories of operations: mergers, acquisitions and concentrative joint ventures.

The economic concentrations that exceed a certain threshold provided for in the law must be notified to Competition Council.

 State Aid 

Which are the main attributions of the

Competition Council in the field of  State aid?

  Competition Council:

·         issues decisions according to the law on State aid, following the assessment of notifications regarding intentions to grant a new State aid or to modify an existing State aid;

·         supervises the effective enforcement of its decisions;

·         notifies the courts according to the provisions of the Law;

·         notifies the authority initiating a normative act, establishing State aid measures, which were not-notified or prohibited through a Competition Council decision, and at the same time, informs the grantor and the beneficiary with regard to the intimation sent to the initiating authority;

·         draws up the Annual State aid Inventory;

·         monitors the existing State aids;

·         supervises the financial relations between the public authorities and public undertakings, and ensures the observance of transparency within the undertakings entrusted with special or exclusive rights or which were entrusted to perform a service of general economic interest;

·         elaborates an annual report on the State aids granted in Romania.

Why do  undertakings need to be aware of the rules in the field of State aid?

The undertakings – beneficiaries of State aids – are those who suffer the consequences in case of violations of the rules regarding the obligation to notify a State aid, because they are forced to pay back the amounts received illegally, plus the related interest rates.

How can one notify the Competition Council in case of the granting of an alleged illegal State aid?

The interested natural or legal persons affected by the granting of an alleged illegal State aid may lodge a complaint with the Competition Council in accordance with the provisions of the „Regulation on the form, content and other details provided in the complaint regarding an alleged illegal aid” - published in the Official Gazette of Romania, Part I no. 897 from 01/10/2004.

What is the legal framework for State aid in Romania?

Law on State aid no.143/1999 – entered into force on January 1^st 2000. The law was modified and completed several times in order to comply with the acquis;

Secondary legislation – consisting in regulations and implementing guidelines adopted by the Competition Council.

Which State aids do not fall within the scope of the law?

·                       aids  granted for agriculture and fishery;

·                       aids that do not meet a certain threshold provided for in the law (State aids granted to an undertaking over a three-year period in a total amount of 400.000 RON).

Which State aids are considered to be compatible with a normal competitive environment?

·         aid having a social character or granted to individual consumers, provided that such aid is granted without discrimination related to the origin of the products or services concerned;

·         aid aimed at eliminating the effects caused by natural disasters or exceptional occurrences.

·         State aids in this category must be notified to the Competition Council.

 Which State aids are prohibited de jure?

·         export aid or any aid that is conditioned, in law or in fact, on  export performance in so far as such an aid may affect the correct application of international agreements to which Romania is a party;

·         aid granted to undertakings for the compensation of operating losses, granted directly or through tax write-offs;

·         aid measures whose application create discrimination in favor of domestic goods against similar goods produced in countries that participate in international agreements to which Romania is a party, and which prohibites such discriminations.

Who is the initiator of a State aid?

The State aid initiator is an authority empowered to initiate normative or administrative draft acts that involve State aid granting.

Who must notify a state aid?

Any intention to grant a new State aid or to modify an existing aid must be notified to the Competition Council by the grantor and by the initiator of the aid.

Which State aids may be authorized by the Competition Council under certain conditions?

·         aid for research and development;

·         aid for small and medium-sized enterprises;

·         aid for environmental protection;

·         aid for the training of employees and for the creation of new jobs;

·         aid for rescue and restructuring firms in difficulty; the aid to maintain jobs shall be considered as restructuring aid;

·         aid for regional development;

·         general aid to promote exports, through actions such as: national weeks, international fairs, showrooms etc., provided that all interested undertakings may benefit from them;

·         aid for the promotion of culture and for the conservation of cultural heritage;

·         aid for large investment projects;

·         any other aid granted in accordance with the regulations and guidelines on State aid issued by the Competition Council, respecting the legislation in force.

What is an illegal State aid?

The illegal aid is a State aid granted without being authorized by the Competition Council or granted after notification, but before the Competition Council issued a decision within the legal time limits.

What is a prohibited State aid?

The prohibited aid is the aid which was granted in spite of a prohibition decision issued by the Competition Council.