Romania: Twenty years of competition law enforcement in Romania
The Romanian Competition Council (“RCC”) recently published an anniversary report which spotlights the RCC’s major achievements since its establishment as the relevant competition authority in Romania. This report sheds light on the significant impact of the RCC’s contributions to the economic growth and welfare of both business and citizens.
In 20 years of activity, the RCC has generated over EUR 1 billion of savings for Romanian citizens, according to a study issued by the Academy of Economic Studies, which assessed the impact of Romanian competition policy on ten key industries in the national economy: bank services, mandatory motor vehicle insurance, private pension fund management, cement production and marketing, mobile telecommunication, pharmaceuticals and healthcare services, electricity generation and distribution, fuel distribution, retail and liberal professions. More than half of this amount is attributed to the telecommunications sector, where the RCC's interventions by means of specialised investigations and proposals for adjusting the legal framework ensured a competitive market.
In the fuel marketing sector, two cartel cases were concluded with strong sanctions as well as market monitoring rules which led to the development of a set of measures and actions to stimulate competition and generated savings of EUR 145 million.
Since 1997, the RCC has initiated 345 investigations (51.8% of which were opened ex-officio), of which 69.2% involved anticompetitive practices such as anticompetitive agreements and abuse of dominant position and 15.36% involved mergers regarding which the competition authority was not notified.
Over these two decades of activity, the RCC has levied fines amounting to EUR 574.8 million. Its two landmark cases are the highest fine in terms of percentage, i.e. 9.2% of turnover (approx. EUR 1 million) levied against the Body of Expert and Licensed Accountants of Romania for fixing costs for accounting services, and the highest fine in terms of value, i.e. EUR 200 million, levied against six oil companies, namely OMV Petrom SA, OMV Petrom Marketing SRL, Lukoil România SRL, Rompetrol, Downstream SRL, Mol Petroleum Products SRL and ENI Romania, for anti-competitive agreements and concerted practices. Other noteworthy cases are the National Company Romanian Post – fine of EUR 24 million for abuse of a dominant position; Orange and Vodafone – fine of EUR 63 million for abuse of a dominant position; Bayer and wholesalers – fine of EUR 12 million for anticompetitive vertical restraints; Metro, Rewe, Mega Image, Interex and suppliers – fine of EUR 35 million for price fixing.
Even if the RCC is still regarded as a young authority compared to other European NCAs, it is very active and influential, especially considering the deterrent effect of its actions. The control activities performed by the RCC and the fines levied in this context have increased drastically during the last few years. On the one hand, this is a consequence of the fact that the Romanian market has developed significantly, reaching a higher level of complexity and competitiveness. On the other hand, the RCC aims to live up to current European market trends and the monitoring strategies of the European Commission.
The results of the RCC’s actions have started not only to be more visible, but also to directly influence the actions of undertakings in various fields. Until lately, acknowledgement of and compliance with competition regulations have been rather exclusive topics with which only multinational corporations seemed to concern themselves, but competition issues are now significant topics for all Romanian companies.
The RCC has selected five strategic objectives for 2017–2020:
- to increase the enforcement of competition regulations, especially in key economic sectors;
- to mobilize RCC’s expertise in the state aid field in order to uphold public policy and proper use of public funds;
- to expand the competition frontier, especially towards start-up or novel sectors such as digital industries;
- to increase the transparency and predictability of its processes and activity, especially with regard to the timeframe of investigations, and to implement standardized and expedited procedures;
- to improve the RCC’s performance, enhancing the culture of competition.
These goals are worthy and necessary, but they will not be achieved easily. Successful competition advocacy and enforcement of competition regulations need to be backed up by appropriate measures to strengthen the Romanian economy.
Still, considering the positive evolution over the past two decades, Romania seems to be making up for lost time and, undoubtedly, the best is yet to come!