Croatia: from the enforcer
Questions and answers
How long is the head of agency’s term of office?
The Croatian Competition Agency (CCA) is headed by the five members of the Competition Council, one of which is the president and one the vice president. The term of office for the president and for all the members of the Council is five years.
When is he or she due for reappointment?
In February 2020 the mandate of the vice president and in April 2020, the mandate of the current president were renewed for the term of five years. The mandate of other three Council members expires in January 2024.
Which posts within the organisation are political appointments?
None. The president and members of the Council are appointed and relieved from duty by the Croatian Parliament on the proposal of the government from lawyers and economists, who are members of the Bar or have certifications for accountancy or a master’s (or both), or other doctorate and postgraduate studies.
What is the agency’s annual budget?
The annual budget for 20120 is 16.3 million kuna.
How many staff are employed by the agency?
The current number of staff is 51. The CCA staff consists mostly of lawyers and economists, though 20 per cent of the staff is administrative. Since 2018, the CCA has new competence in unfair trading practices in business-to-business food supply chain. For that purpose new section was formed and new staff was employed.
To whom does the head of the agency report?
The CCA reports only to the Croatian Parliament. It submits an annual report on its work to Parliament.
Do any industry-specific regulators have competition powers?
In Croatia there are sector-specific regulators:
- the Croatian Regulatory Authority for Network Industries;
- the Croatian Energy Regulatory Agency;
- the Croatian Financial Services Supervisory Agency;
- the Council for Electronic Media; and
- the Croatian National Bank.
The CCA has competence for competition cases for all sectors.
If so, how do these relate to your role?
Sector-specific regulators cooperate with the CCA in matters concerning competition in specific sectors. The cooperation is carried out within the framework of special cooperation agreements concluded with all sector-specific regulators.
Do politicians have any right to overrule or disregard the decisions of the authority?
No. The independence of the CCA is prescribed in the Competition Act, which states that no one can influence the decisions of the CCA.
Does the law allow non-competition aims to be considered when taking decisions?
Which body hears appeals against the agency’s decisions? Is there any form of judicial review beyond that mentioned above? If so, which body conducts this?
Decisions of the CCA are final and can only be reviewed judicially by the High Administrative Court of Croatia. The injured party can bring a claim before the High Administrative Court within 30 days from the receipt of the decision of the CCA.
There is no other level of judicial review on the national level. In the one instance judicial review system, the High Administrative Court of Croatia is the only court competent for judicial review of the CCA’s decisions regarding the merits and the level of fines imposed by the CCA for infringements of competition rules. This proceeding at the court is an urgent proceeding.
Has the authority ever blocked a proposed merger?
Yes. There was one case of a prohibited merger in the banking sector in 2001.
Has the authority ever imposed conditions on a proposed merger?
Yes, many times. There are several merger decisions where the CCA conditionally allowed a merger on the condition that certain structural and behavioural remedies be implemented within a determined period of time.
Has the authority conducted a Phase II investigation in any of its merger filings?
Yes, in several merger cases. Phase II investigations for the assessment of the compatibility of a notified concentration are conducted when the CCA, based on the evidence submitted together with the notification of a proposed merger or on the basis of other available information, finds that the implementation of the merger in question could significantly impede effective competition in the relevant market.
Has the authority ever pursued a company based outside your jurisdiction for a cartel offence?
Yes, there is one ongoing case.
Do you operate a leniency programme? Whom should potential applicants contact?
Yes. The leniency programme was introduced in 2010 in the Competition Act. Details and conditions on how to obtain immunities from fines or a reduction of fines is regulated in the separate Regulation on the Criteria for Immunity from Fines or Reduction of Fine. The general contact for leniency can be found on the website of the CCA.
Is there a criminal enforcement track? If so, who is responsible for it?
The Criminal Code provides that bid-rigging is a criminal offence where criminal sanctions apply. The criminal sanction that can be imposed for a bid-rigging case is six months to five years imprisonment and in the case of significant financial gain or cause of substantial damage this sanction can be increased from one to 10 years of imprisonment. However, this is under the competence of the state attorney. The CCA can only impose administrative fines for all other infringements of the Competition Act.
Are there any plans to reform the competition law?
Yes, at the moment current Competition Act is being amended to transpose ECN+ Directive and some other proposed changes concern mostly procedural issues.
When did the last review of the law occur?
The last review of Competition Act occurred in 2013 with the accession of Croatia to the EU. The main amendments referred to the new competence of the CCA to apply articles 101 and 102 of the TFEU.
Do you have a separate economics team? If so please give details.
Yes. The Office of the Chief Economist has been in force since 2011 and comprises two persons, a chief economist and one senior adviser. Other economists continue to work in different departments of the CCA, including the abuse of dominant position, prohibited agreements and mergers departments.
Is there a criminal enforcement track? If so, who is responsible for it?
Yes. The Criminal Code provides that bid-rigging is a criminal offence to which criminal sanctions apply. The criminal sanction that can be imposed for the bid-rigging case is six months to five years imprisonment and in the case of significant financial gain or cause of substantial damage this sanction can be increased from one to 10 years of imprisonment. However, this is under the competence of the state attorney. The CCA can only impose administrative fines for all other infringements of the Competition Act. However, in practice, there have not yet been any criminal cases of bid-rigging.
Has the authority conducted a dawn raid?
Yes. The CCA has conducted several dawn raids.
Has the authority imposed penalties on officers or directors of companies for offences committed by the company?
No. According to the Competition Act, only legal persons or undertakings can be fined.
What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?
Article 22 of the Competition Act defines two thresholds that need to be cumulatively fulfilled for the obligatory notification of concentration.
In order to assess the compatibility of a concentration, the parties to the concentration are obliged to notify any proposed concentration to the CCA if the following criteria are cumulatively met:
- the total turnover (consolidated aggregate annual turnover) of all the undertakings or parties to the concentration, realised by the sale of goods or services in the global market, amounts to at least 1 billion kuna in the financial year preceding the concentration and in compliance with financial statements, where at least one of the parties to the concentration has its seat or subsidiary in the Republic of Croatia; and
- the total turnover of each of at least two parties to the concentration realised in the national market of the Republic of Croatia, amounts to at least 100 million kuna in the financial year preceding the concentration and in compliance with financial statements.
Are there any restrictions on minority investments?
What discounts are available to companies that cooperate with cartel investigations?
The first company that reports a cartel to the CCA, submits relevant evidence disclosing a cartel or providing evidence to prove a cartel, and fully cooperates with the CCA, can obtain full immunity from the fine. The second leniency applicant to approach the CCA may be eligible for up to a 50 per cent fine reduction if it provides the CCA with evidence that represents significant added value with respect to the evidence already in the CCA’s possession and which substantially contributes to the closure of the proceeding concerned. The third applicant to approach the CCA with significant evidence can obtain a 30 per cent fine reduction, the next one a 20 per cent fine reduction, and so on.
Croatia: from the enforcer's competition economists
Address: Savska cesta 41/XIV, 10 000 Zagreb, Croatia
Tel: +385 1 6176 448
Fax: +385 1 6176 450
President of the Competition Council
Email: [email protected]
Questions and answers
How many economists do you employ?
The Croatian Competition Agency (CCA) employs 19 economists. Each one holds a university degree in economics, of which five hold master’s degrees in economics. Out of the four, two have started a doctorate study.
Do you have a separate economics unit, or ‘bureau’?
Within the CCA’s internal organisation is a separate economic unit, the Office of the Chief Economist.
The Office of the Chief Economist is entrusted with preforming the most complex economic analyses in cases handled by the CCA, especially in proceedings involving the establishing of abuses of dominant position of undertakings on the market and the review of concentrations among undertakings on the market. It also reviews the work and economic analysis completed in other departments of the CCA in order to ensure a high-level of quality in respect of economic analysis and the improvement of overall economics work done in the departments, necessary for the preparation of cases and submission of cases to the Competition Council’s sessions.
Do you have a chief economist?
Yes, Mr Ivan Ante Ivanda, who holds a master’s in economic science and is a PhD student in economic science.
To whom does the chief economist report?
The chief economist reports to the Competition Council as a decision-making body of the CCA.
How many economists have a PhD in industrial economics?
Three economists are currently PhD students in economics.
Does the agency include a specialist economist on every case team? If not, why not?
On every case team there is at least one specialist economist. However, in more complex cases, there are usually two or more economists. Four economists are dedicated to the work on unfair trading practices in food supply chain, a new competence of the CCA since December 2017.
Is the economics unit a ‘second pair of eyes’ during cases – is it one of the agency’s checks and balances? If not, why not?
The economics unit can be described as a ‘second pair of eyes’ during cases, because the most necessary inputs come from the economic analysis done during the proceedings. The chief economist also participates at each session of the Competition Council and gives its opinions where necessary.
How much economic work is outsourced? What type of work is outsourced?
The CCA does not outsource economic work; the workload is done by the economists employed by the CCA.