Romania: from the enforcer
Bogdan Marius Chiriţoiu
Questions and answers
How long is the head of agency’s term of office?
The Competition Law provides that the CC’s president as well as the other plenum members can be appointed in these functions for a five-year term, benefiting from the opportunity for reappointment.
When is he or she next due for reappointment?
Bogdan M Chiritoiu, the president of the CC, had his tenure renewed for another five years in March 2015. The term has ended in March 2020. He acts in interim capacity until a new chairman will be appointed. The procedure is under way. The Selection Committee has proposed the reappointment of president Chiritoiu.
Which posts within the organisation are political appointments?
The law specifically sets out that the plenum members are forbidden from being members of any party or other political groups. The plenum is appointed by the President of Romania at the proposal of the CC’s advisory board and the subsequent endorsement of the Romanian government and the hearing of the candidates in the specialist committees of the Romanian parliament.
The advisory board is a consultative body comprising former CC presidents, representatives of academia, the business community and consumer associations, and of other experts in the field. In addition to the task of proposing the names of the candidates for the CC to the government, the advisory board is entrusted with the task of issuing recommendations and opinions on the main aspects of competition policy and activities of the CC.
The plenum members do not represent the authority that appointed them and are independent in their decisions. The law also provides for a series of professional qualifications for any appointment to the plenum, such as professional career acknowledgement, superior education, economic or legal experience and so on. The investigation staff are civil servants.
What is the agency’s annual budget?
The 2019 budget of the institution financed from public funds and non-reimbursable European funds was approximately €12.62 million (60.9 million lei), which was completed with own revenues of € 0.87 million (4.2 million lei), amounting thus to €13.49 million.
How many staff is employed by the agency?
The total number of full-time equivalent staff working for the agency (including the territorial inspectorates and the staff of the state aid directorate, railway surveillance directorate, maritime surveillance unit and the General Secretariat) is 340.
To whom does the head of the agency report?
The CC is an autonomous administrative authority. It has the legal obligation to issue an annual report regarding its activity, which is made publicly available. The CC can provide information about its field of activity to the government, the public and the international specialised organisations without prior approval of any other authority.
Do any industry-specific regulators have competition powers?
The CC is the only authority in the competition field in Romania. The sectoral regulatory authorities, set up by specific laws, carry out complementary activities to those of the CC. Usually these authorities are empowered by law to take measures to prevent the abuse of dominant positions and to open to competition the respective sectors.
If so, how do these relate to your role?
The CC collaborates with the sectoral regulating authorities both for working out the specific legislative framework and for defining the markets and establishing position on the market of the operators in these sectors. For an effective cooperation, the CC concluded cooperation protocols with the regulatory authorities aimed at:
- preventing and discouraging anticompetitive practices on regulated markets;
- monitoring and supervising these markets;
- advocating the competition rules and measures taken when infringing competition provisions;
- bilateral consultations on competition problems; and
- coordination of actions on the markets.
May politicians overrule or disregard authority’s decisions? If they have ever exercised this right, describe the most recent example.
No, in what concerns the decisions. Concerning advocacy area, points of view expressed by CC concerning draft legislation are advisory.
Does the law allow non-competition aims to be considered when your agency takes decisions?
No. The only criterion is competition in the benefit of consumers.
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? Has any competition decision by the agency been overturned?
Appeals against the decisions of the CC can be heard in the Appeal Court of Bucharest. The decisions of the Appeal Court may be further challenged by appeal before the High Court of Cassation and Justice.
The past year saw the High Court of Cassation and Justice favourably maintaining 99 per cent of the total amount of the fines contested. Further, 94 per cent of the decisions of the High Court of Cassation and Justice have been favourable to the Competition Authority.
Has the authority ever blocked a proposed merger? If yes, please provide the most recent instances.
The last outright prohibition decision dates back to 2001 (Decision No. 85 of 21 March 2001). The parties involved in the merger were Saba Investments (Overseas) Cyprus and LETEA-Bacau. The merger took place on the market of paper for printings and of special papers.
More recently, in 2018, there was one in-depth merger review, where the merger was abandoned by parties following the in-depth review by the CC.
At the end of 2017, Wienerberger Sisteme de Cărămizi SRL notified the CC of the merger operation involving the acquisition of the sole control over Brikston Construction Solutions SA.
Following the analysis carried out in the first phase of the procedure, the CC concluded that the notified operation would lead to the creation of a dominant position on the market for the production and sale of bricks and ceramic blocks in Romania, a market where both Wienerberger and Brikston were present.
Given that the proposed merger raised serious doubts about its compatibility with a normal competitive environment and those doubts could not be removed by the commitments proposed by Wienerberger, in May 2018 the CC decided to open an investigation and thus to enter into the second phase of the procedure. In July 2018, the proceedings before the CC ceased following the withdrawal of the proposed transaction by the parties.
Has the authority ever imposed conditions on a proposed merger? If yes, please provide the most recent instances.
Yes. The CC imposed conditions following Phase II of review in one merger decision dated 1997, three merger decisions dated 2000, one merger decision dated 2001, one merger decision dated 2003 and one merger decision dated 2007.
The CC also accepted commitments in Phase I of review that were attached to the merger clearances as conditions in a series of cases, for instance:
- in the case of the acquisitions by Fresenius Medical Care Group of two suppliers of renal care services in 2011;
- in the case of the economic concentration by which Auchan Romania acquired 20 Real stores in Romania, dated 2013;
- in the case of the economic concentration where Burda Romania SRL and Burda Verlag Osteuropa GmbH took control over Sanoma Hearst România SRL, dated 2013;
- in the case of the merger where SC Mega Image SRL took over 19 Angst stores in Bucharest and Ilfov county in 2014; and
- in the case of the merger where AGRANA Zucker GmbH took over the assets of SC Zaharul Lieşti SA and SC Lemarco Cristal SRL, dated 2014.
In 2016, the CC conditionally approved in Phase I of review, the economic concentration where the Group Carrefour took control over Rewe Group Billa Romania and the economic concentration where the takeover of online IT&C retailer PC Garage Store by local online general retailer eMag took place. Thus, in the former case, dated 2016, Carrefour had committed to divest three supermarkets active in Braila, two Carrefour Market stores and one Billa store to another operator, whereas in the latest case, Dante International who operates eMag had committed to ceasing the operation of four online stores active on the retail market for non-food products. Dante also undertook not to engage in the ceased activities for at least 10 years.
In 2017, four economic concentrations were approved with commitments in Phase I of review, as it follows:
- in the area of postal services, Radu Family acquired Postmaster SRL and Zoto Investments BV;
- in the area of prepaid mobile phone services, PayPoint Services SRL acquired Payzone SA;
- in the area of imagistic services, Affidea Diagnostics BV acquired Harkstede Holding BV and Hiperdia SA; and
- in the area of raw milk and dairy products, BSA International SA acquired Covalact SA, Lactate Harghita SA and Covalact-Prodserv SRL.
In 2018, two economic concentrations were approved with commitments in Phase I of review:
- in the area of pharmaceuticals, Glebi Holdings PLC acquired A&D Pharma Holdings NV; and
- in the area of food products, Unilever South Central Europe SA acquired Betty Ice.
More recently, in 2019, RCC refused to clear unconditionally, as originally proposed one merger involving the acquisition of eight fuel filling stations (OMV Petrom/Art Petrol). The merger was finally cleared during the Phase I analysis after accepting the commitments proposed by Petrom, namely to sell four of the eight fuel filling stations acquired, together with the assets contributing to their current functioning.
Has the authority conducted a Phase II investigation in any of its merger filings? If yes, please provide the recent instances.
Yes. The statistics on Phase II reviews are as follows:
|Year||Number of cases (Phase II)|
|2010||2 (the procedures were closed as a result of the modification of the conditions related to the moment when the notification was considered effective)|
|2012||1 (the notification was withdrawn)|
|2018||1 (the notification was withdrawn)|
Has the authority ever pursued a company based outside your jurisdiction for a cartel offence?
The CC has the authority to pursue companies based outside Romanian territory provided the alleged foreign anticompetitive conduct produces domestic effects.
The CC investigated and sanctioned, by its Decision No. 44/29.11.2013, a number of foreign firms with no presence in Romania for engaging in a bid-rigging scheme in connection with government defence contracts. The combined fines imposed by the CC on the four parties involved in the cartel amounted to €2.8 million. The decision is being challenged in court.
More recently, following a cartel investigation on the market for electricity meters ended by a sanctions decision in 2017, the CC applied fines on a Swiss-based company without affiliated companies in Romania for participating in a market sharing agreement during public tenders lasting from 2008 to 2015.
There are three other ongoing cartel investigations involving companies based outside our jurisdiction (ie, in the aviation insurance, the immunoglobulin market and the agricultural machinery, equipment and supplies markets).
Do you operate a leniency programme? Whom should potential applicants contact? What discounts are available to companies that cooperate?
The CC adopted its first leniency programme in 2004. The programme was modified in 2009 when the CC adopted new Guidelines on the Conditions and Application Criteria of a Leniency Policy. (2009 Guidelines) The 2009 Guidelines reflect changes in the European Commission’s leniency programme in 2006 and are fully harmonised with the European Competition Network Model Leniency programme.
Applicants should contact:
Irina Popovici (coordinator)
Tel: +40 21 405 45 79
Fax: +40 21 405 45 10
Email: [email protected]
The leniency programme distinguishes between full immunity and reduction of fines. Full immunity is available to the first undertaking to submit evidence that will enable the CC to carry out targeted inspections in connection with an alleged cartel or is the first to submit information and evidence that enables establishing that there was indeed a cartel. Fine reduction (30 to 50 per cent for the first applicant, 20 to 50 per cent for the second and up to 20 per cent for others) is available to an undertaking that provides the CC with evidence of the alleged cartel that represents significant added value, relative to the evidence already in the CC’s possession at the time of the application.
Is there a criminal enforcement track? If so, who is responsible for it? Does the authority conduct criminal investigations and prosecutions for cartel activity? If not, is there another authority in the country that does?
Currently there is no criminal enforcement track in the area.
Infringements of antitrust law are sanctioned with contraventional fines of an administrative nature by the CC’s decision applied on undertakings and associations of undertakings. The General Prosecutor’s Office is competent to investigate and prosecute criminal offences by natural and legal persons. The investigative and enforcement procedures in the latest case are regulated in the Criminal Code and the Code of Criminal Procedure.
Different organisations within the Public Prosecutor’s Office are responsible for criminal prosecution in cases where the CC enforces the Competition Law administratively. For instance, bid-rigging will frequently involve the type of organised criminal activities that will be prosecuted by the Directorate for Investigating Organised Crime and Terrorism (DIICOT), an independent office within the General Prosecutor’s Office attached to the High Court of Cassation and Justice. The Anticorruption Directorate of the Prosecutor’s Office could be involved in procurement cases outside the DIICOT’s remit. At present, the CC is cooperating with the Prosecutor’s Office in a couple of cases.
Are there any plans to reform the competition law?
The CC is currently working to transpose Directive (EU) 2019/1, to empower the competition authorities of member states to be more effective enforcers and to ensure the proper functioning on the internal market, by means of a legislative amendment to Competition Law this year.
When did the last review of the law occur?
The last major review of Romanian Competition Law No. 21/1996 occurred in 2015 through Law No. 347 published in the Official Journal of Romania, dated 29 December 2015. Other more recent amendments envisage the adoption of Emergency Government Ordinance No. 160/2020 for amending and completing Government Ordinance No. 22/1999 on the administration of ports and waterways, the use of naval transport infrastructures belonging to the public domain, as well as the development of naval transport activities in ports and inland waterways, as well as for completing article 25, paragraph (1) of the Competition Law No. 21/1996, the adoption of the Emergency Government Ordinance No. 6/2020 for amending and completing the Emergency Government Ordinance No. 77/2014 on national procedures in state aid field as well as for amending and completing the Competition Law No. 21/1996 and for amending and completing article 15 of the Competition Law No. 21/1996.
As concerns Emergency Government Ordinance No. 160/2020, note should be made that in view of the adoption at European Union level of normative acts to be transposed into national law, for which the competition authority is considered to be better placed to ensure their implementation, it was necessary to properly complete the Competition Law No. 21/1996, republished, as subsequently amended and supplemented. Thus, it introduced provisions on the completion of the competences of the competition authority to provide that it fulfills any other attributions in the field of competition and state aid, unfair competition and unfair commercial practices, the proper functioning of the digital services market, foreign investment policies in the national economy, as well as any policies on the proper functioning of markets in the field of competition and state aid, arising from internal regulations or those issued by the European Union institutions. The draft normative act was adopted in the Government meeting of the 10 September 2020 and it became Government Emergency Ordinance (GEO) 160/2020, being published in the Official Gazette of Romania no. 840/2020.
There is also in advanced stage of approval a draft Emergency Government Ordinance on damages actions in cases of breach of competition law provisions as well as for amending and completing Competition Law No. 21/1996. The purpose of the draft Government Emergency Ordinance is to transpose into national law Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law in the event of infringements of the competition laws of the member states, and of the European Union. The draft ordinance essentially provides the regulation of the mechanism and procedures to enable persons prejudiced by anti-competitive acts to apply to the courts (tribunals) for damages. The draft ordinance also provides a series of amendments and completions to the Competition Law No. 21/1996 to ensure the legal instruments available to the competition authority regarding the investigations and the application of sanctions in case of finding violations of the competition law.
Do you have a separate economics team? If so, please give details.
To ensure greater consistency and transparency within the decision-making process, the CC set up a group of experts with a strong academic background and education in economic analysis and econometrics. The economics team, whose aim is to deploy in-depth quantitative studies, is currently organised in a separate unit and participates in various cases on an ad hoc basis, at the request of the case handler, or following a recommendation from the CC’s Board. Presently, the team includes PhD holders in economics or statistics. This development should ensure in the future a more rigorous economic analysis in competition cases that will stand up to external scrutiny.
Has the authority conducted a dawn raid?
Dawn raids are a frequently used investigatory tool by the CC.
Has the authority imposed penalties on officers or directors of companies for offences committed by the company? If yes, please provide the most recent instances.
What are the pre-merger notification thresholds, if any, for the buyer and seller involved in a merger?
The Competition Law provides only for mandatory notification to the CC of economic concentrations that exceed the de minimis threshold:
- the aggregate worldwide turnover of the parties to the concentration for the previous financial year exceeds €10 million; and
- the turnover in Romania of at least two of the participating undertakings, each taken separately exceeds €4 million.
Are there any restrictions on minority investments?
Romania: from the enforcer's competition economists
Address: 1, Piata Presei Libere, corp D1, Sector 1, 013701, Bucharest, OP 33, Romania
Tel: +40 21 405 4429 / 4401
Fax: +40 21 405 4402
Email: [email protected]
Bogdan Marius Chiriţoiu
Tel: +40 21 318 11 98
Fax: +40 21 318 49 08
Tel: +40 21 405 45 37 / 02
Fax: +40 21 318 49 10
Tel: +40 21 405 44 11 / 49
Fax: +40 21 405 44 12
Tel: +40 21 405 45 39 / 06
Fax: +40 21 405 45 05
Dragoş Constantin Vasile
Tel: +40 37 212 97 30
+40 21 405 45 26
Fax: +40 21 405 44 12
Tel: +40 21 405 45 22 / 38
Fax: +40 21 405 45 05
Daniela Victoria Bădilă
Tel: +40 21 405 45 79
Fax: +40 21 405 45 90
Email: [email protected]
Questions and answers
How many economists do you employ?
By the end of 2019, there were 180 economists employed by the Romanian Competition Council (RCC) – 48 per cent of the total number of RCC employees. From the total number of competition inspectors, 128 are economists, which represents 49 per cent of the total number of inspectors. The Chief Economist Unit employs eight economists, including the chief economist, five of whom have PhDs.
Do you have a separate economics unit?
The Chief Economist Unit is part of the Research Directorate.
Do you have a chief economist?
To whom does the chief economist report?
The chief economist reports directly to the general director of the RCC.
Does the chief economist have the power to hire his or her own staff?
The chief economist does not have the power to hire his or her own staff.
How many of your economists have a PhD in industrial economics?
Ten of the RCCs economists have a PhD in industrial economics.
Does the agency include a specialist economist on every case team? If not, why not?
We have an internal procedure for including a member of the chief economist’s team in the most complex cases or cases that have a high anticipated effect. In the past few years, the Chief Economist Unit has been involved in all of the RCC’s most important cases. The chief economist’s team is also involved in the most important merger cases and in defending the RCC’s cases before the Romanian courts. This latter type of involvement implies using economic and financial analysis in helping the RCC’s internal lawyers defending competition cases.
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?
Yes, it is. The procedure mentioned above also covers the ‘checks and balances’ function. The chief economist team’s involvement is mandatory for validating the methodologies used in market inquiries. The ‘checks and balances’ function of the chief economist also covers theories of harm, effects analyses, market definitions and all other relevant aspects for infringement or merger cases.
How much economics work is outsourced? What type of work is outsourced?
Economics work is not outsourced. We prefer to deal with economic analysis inside the RCC, but we sometimes consult academics or other stakeholders on certain economic instruments that we use.