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ROMANIA: An Introduction to Competition Law

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Romania: An Introduction to Competition Law 

In Romania, private consumption remains the main factor for stimulating economic growth. As per the European Commission forecasts, the growth of the gross domestic product (GDP) was at the level of 3.9% in 2019, and is to remain robust, at 3.8% in 2020 and 3.5% in 2021.

Against this background, merger clearance has seen a significant increase in 2019 (of approximatively 31%), with the Romanian Competition Council (RCC) having approved a total of seventy-five mergers and being expected to maintain a similar pace for 2020.

The transactions notified to the RCC were not generally found to raise competition concerns. In the case of OMV Petrom's takeover of eight fuel distribution stations from Art Petrol, the merger was approved subject to OMV Petrom Marketing's commitments to sell four of the fuel distribution stations, together with their corresponding assets, and not to take over control of another fuel distribution station for the following ten years. This is, however, the only merger approved subject to the undertaking of commitments.

The RCC has maintained the reinforcement of swift and efficient merger procedures to the benefit of businesses as one of its top priorities for 2019. At the same time, the average duration of the clearance process has seen a constant decrease, in order to align Romania with the practice of other national competition authorities.

The RCC has also continued its enforcement activity against anti-competitive practices. Over recent years, in investigations or sector inquiries, the authority targeted sectors with a significant impact on consumers, such as the retail trade and the financial services, pharma, telecom, e-commerce and energy sectors. Another focus was on bid rigging and corruption and the manner in which such activities may directly breach competition law.

In 2019 the authority had important interventions on the market, with fourteen investigations finalised, which led to the application of fines in a total amount of EUR20.3 million.

Half of the investigations finalised in 2019 concerned abuse of dominant position cases. The RCC fined Roche Romania for its conduct on the oncological products market, consisting in the adoption of a commercial strategy aimed at eliminating competition within tenders and at delaying entry on the market of similar products. Other relevant abuse of dominance cases concerned the behaviour of Distrigaz Sud Rețele and Gaz Sud on the natural gas distribution market, and consisting of establishing and levying excessive, economically unjustified tariffs.

In terms of cartel investigations, the RCC continued its fight against bid rigging practices, given the public funds involved and the interest of the authority to ensure that they are spent for the benefit of citizens, as final consumers. The most significant enforcement actions concerned illegal behaviour of participants in tenders for the purchase of road signs and in security services tenders. In both cases, the anti-competitive practices consisted in exchange of sensitive information, which led to the co-ordination of offers within the tenders.

Along with the finalisation of an important number of cases, the authority has also set the background for its next enforcement activities in terms of investigations: in 2019 the RCC launched nine other investigations concerning potential antitrust breaches, and at the end of 2019 had a total of thirty-two pending investigations. For this purpose, the RCC carried out nine unannounced inspections at forty-four premises and working points.

An important evolution was the increased use in 2019 of the whistleblowing platform, an instrument made available by the RCC, through which potential competition breaches can be reported, while maintaining anonymity. 2019 was also characterised by an increased application for the settlement procedure, which generated 30% of the fines applied by the RCC for anti-competitive conduct.

In terms of antitrust litigation, 2019 was characterised by a high number of court decisions upholding the sanctions and fines applied by the RCC. This shows that it is essential for companies to intervene with economic and legal arguments from an early stage of an antitrust investigation, in order to remove the concerns of the RCC prior to its finalisation and thus escape a fine, which tends to be confirmed aftewards in front of the courts of law.

In 2019, the RCC has finalised nine sector inquiries or market studies, targeting sectors such as cement, fuel, salt for snow removal and public lighting. Most of these sector inquiries or market studies were completed with recommendations issued by the authority to eliminate market failures. At the same time, however, some of the assessments carried out identified suspicions regarding potential anti-competitive conduct and therefore led to the initiation of actual investigations into infringements of competition law (for example, on the cement market).

In the course of 2019, the RCC issued a draft guide for compliance with the competition rules by sector associations. The purpose of the guide is to raise awareness of compliance with the rules in the field of competition and provide practical advice in this regard. The need for guidance resulted from the increased number of cases in which the RCC had found anti-competitive practices that were conceived or developed within associations. Industries such as tourism, insurance or financial services have been recently faced with investigations and even sanctions applied for the anti-competitive behaviour of associations.

The RCC also conducted important projects focused on directly benefiting businesses and consumers. In 2019, the authority lauched the fuel price monitor, a platform aimed at allowing consumers to find out the prices charged by the main car fuel distribution networks. Also, together with the National Consumer Protection Authority, the RCC organised "The Competition and Consumer Day", with participation of European Commission representatives.

On the legislative front, in 2019 the RCC issued a first version of the draft law aimed at transposing the ECN+ Directive into national legislation. This is set to bring important changes in terms of the application of fines or parent liability in case of breaches of competition law. 2020 is expected to bring further clarifications and possible changes to the manner in which the RCC shall transpose the provisions of this Directive.

Private antitrust enforcement is not yet substantial in Romania. It tended to focus more on regulated sectors, such as telecom, media and energy, where clear rules of behaviour have been established on the basis of regulations. Private damages were not yet awarded, but some of the recent investigations imposing fines triggered significant interest and it may be expected that some private damages cases might be logged in the future. The RCC has many times promoted private damages rules as a useful instrument for consumers. In our view, to warrant the success of private damages claims, the RCC should focus in its own enforcement decisions on indicating and quantifying damages.