Croatian competition law is based on two legal sources: the Constitution of the Republic of Croatia, and the Treaty on the Functioning of the European Union (TFEU) together with the entire EU competition acquis which is now – Croatia being the 28th member state – a part of national law. Article 49 of the Constitution of the Republic of Croatia proclaims that entrepreneurial and market freedom shall be the basis of the domestic economic system, that the state shall ensure an equal legal status to all undertakings on the market and that abuse of monopolies shall be forbidden. Such constitutional provisions provide the basis for the development of domestic competition law rules aimed at the realisation of free market competition. The first Croatian Competition Act was enacted in 1995 and resulted in a systematic regulation of the Croatian competition law for the first time. In 2003, a new legislation was adopted that tried to deal with several recognised inconsistencies and shortcomings of the 1995 Act. Bearing in mind its strong determination to accede to EU membership, Croatia strived to harmonise its law with EU competition law. As a consequence, the 2003 Act has already been deemed to a large extent harmonised with the acquis communautaire. However, the largest shortfall of the 2003 legislation has been its slow and poor execution – namely the sanctioning of violations by the misdemeanour courts, which eventually resulted in inadequate protection of the free market competition.