Significant amendments to Romanian Competition Law

On 5 August 2010 Emergency Ordinance No. 75/2010 entered into force, bringing Romanian law into line with European competition legislation. This has introduced extensive changes to the previous legislation and will have an impact on businesses operating in Romania.

Key Changes

Romanian competition law (the “Law”) now closely mirrors European competition law. The following amendments are particularly noteworthy:

1. Substantive amendments

• Express provision for the application and enforcement by the Romanian authorities of the European antitrust provisions, if trade between Member States may be affected.

• The anti-competitive agreements, decisions and concerted practices which satisfy the conditions (efficiencies) provided by the Law, will fall directly outside the scope of the anti-cartel prohibition, and now no prior notification to the Romanian Competition Council (the “RCC”) is necessary.

• As regards the block exemptions regime, which applies for certain categories of agreements (such as vertical agreements, technology transfer agreements, specialization agreements, joint research and development agreements, etc.), the relevant European regulations are now directly applicable, instead of the previous Romanian regulations.

• The thresholds for agreements of minor importance have been amended:

(i) an aggregate market share of up to 10% in the case of agreements between competitors; and
(ii) a market share for each of the parties of up to 15% in the case of agreements between non-competitors.
As a rule, the anti-cartel provisions will not apply to such agreements.

2. Procedural amendments

• To provide greater flexibility and legal certainty, early notification of an M&A deal is now possible, where the parties can demonstrate their good faith intention to conclude an agreement or to make a public bid.

• Correspondence between a business and its legal advisors regarding the preparation of the defence or other preparatory documents cannot be used as evidence during the investigation procedure.

• Additional provisions on measures which can be taken by the RCC during an investigation procedure have been introduced: the conditions for accepting commitments proposed by the party (parties), and for imposing behavioural or structural remedies, and a more detailed procedure for adopting interim measures.

• If parties want to suspend the enforcement of a decision of the RCC, they now have to pay a guarantee of 30% of the fine set out in the challenged decision.

3. Amendments relating to sanctions

• Not only any agreements, decisions and concerted practices prohibited by the Romanian antitrust provisions, but also those prohibited by the European antitrust provisions, shall be automatically void.

• Provision for a minimum fine where the undertakings concerned:

(i) supply incorrect, incomplete or misleading information or refuse to submit to inspections – 0.1% of the total turnover achieved by the offender in the preceding business year;
(ii) infringe the Romanian and European antitrust provisions, or they fail to properly notify an M&A deal – 0.5% of the total turnover achieved by the offender in the preceding business year.

• A person who participates in the setting up of a cartel may now also be prohibited from holding a position, exercising a profession, or carrying out an activity, similar to the one used for infringing the law.

• It is clearly stated that where the RCC finds that an M&A deal has already been implemented and is declared incompatible with the normal competitive environment, the RCC may require its dissolution or the disposal of all the shares or assets acquired, so as to restore the situation prevailing prior to the implementation of the M&A deal.

Important things to keep in mind

• Parties now have to assess for themselves whether their agreement falls under the anti-cartel prohibition, and, if so, whether it satisfies the conditions (efficiencies) provided by the Law.

• Parties should be aware that the RCC will be more willing to uphold the European antitrust provisions, as highlighted by a recent decision of the RCC (Decision 39 of 07.09.2010).

Accompanying secondary legislation

Please note that there are several pieces of secondary legislation, supplementing the primary legislation, which entered into force recently. Further information will be provided in a forthcoming Law-Now article.