Romania: New regulations on antitrust damages actions
The long-awaited Antitrust Damages Directive, which all Member States should have implemented in their legal systems by 27 December 2016, has finally been transposed into Romanian legislation by the Emergency Government Ordinance No. 39/2017 ("EGO"), in force as of 8 June 2017.
Damage claims for competition law infringements were possible under Romanian law even before the implementation of the EGO, either as follow-on actions within 2 years after a final and binding infringement decision issued by the competition authority, or as standalone actions within a period of 3 years, in line with general provisions in the Civil Code for regular claims for damages. Still, antitrust damage claims have been rarely pursued in practice.
The EGO now makes it easier for victims of anti-competitive practices to obtain damages, removes practical obstacles to compensation and also brings about a number of important changes to the Romanian Competition Law No. 21/1996 (“Competition Law”).
The rule of thumb is that victims are entitled to full compensation for the harm suffered, which covers compensation for actual loss and for loss of profit, plus payment of interest from the time the harm occurred until compensation is paid.
A final infringement decision issued either by the European Commission or the Competition Council constitutes irrefutable proof before Romanian courts that the infringement occurred. A similar decision issued by the competition authorities of other Member States will constitute at least prima facie evidence of the infringement. In other words, claimants do not need to establish an infringement (which has already been established by the infringement decision itself) and therefore need only to demonstrate causation and loss.
Damage claims for competition law infringements will become time-barred after five years. The statute of limitations begins when the claimant knows or should have known about the illegal practice or conduct, the identity of the infringer and that harm has been done to the claimant.
The statute of limitations is suspended during investigative measures undertaken by the Competition Council with regard to the respective infringement, and is resumed one year after the infringement decision has become final or after the proceedings are otherwise terminated.
Should the parties initiate consensual dispute resolution actions, the court proceedings may remain pending for up to 2 years.
All claims for damages, irrespective of value, are to be filed with the Bucharest Tribunal. We expect that having only one competent court will significantly contribute to creating the basis for unitary court practice in Romania.
The EGO provides further details of clear rules on access to and disclosure of evidence, limits on the use of the evidence part of the Competition Council’s file, passing-on of overcharges, joint and several liability of participants in an infringement and the rebuttable presumption that cartels cause harm.
Therefore, even though the Competition Council has fined the company concerned, damages may be awarded without being reduced on account of the Competition Council fine. Any undertaking affected by anti-competitive behaviour is strongly encouraged by the Competition Council to bring the matter before the courts.
The EGO also amended the Competition Law, imposing specific obligations on modern retailers (supermarkets, hypermarkets, discounters and cash & carry stores). These entities must submit to the Competition Council, upon specific request, information on their resale prices for the purposes of analysis, market studies or price comparisons. Failure to observe this obligation, effective as of 8 July 2017, may trigger fines up to RON 50,000 (approx. EUR 11,000).
Moreover, failure to report a merger or implementing a merger prior to clearance by a non-resident undertaking shall be sanctioned based on a new algorithm, removing activities that have no connection to Romania. The turnover criterion is replaced with the sum of the turnover achieved by each of the companies registered in Romania and controlled by the infringing party, the turnover obtained in Romania by each of the non-resident companies controlled by the infringing party and any turnover obtained in Romania by the infringing party and accounted for in its financial statements.