Cartel investigations and new focus areas for Competition Council this year, predictions show

According to an analysis by law firm Clifford Chance Badea, Romania’s efforts in terms of competition have intensified during 2015 and are expected to become more focused for this year, with bigger fines, economic and commercial investigations and improved cooperation between the Competition Council and other state authorities being predicted.

“The local competition landscape reflects, mostly, an international reality,” Diana Crangasu, senior associate and coordinator of the Competition practice of Clifford Chance Badea, said. “Globally, competition authorities become more alert, and the number of cartel investigations and resulting fines have seen record levels in recent years in the European Union and other major economies of the world, like the United States and China.”

The Romanian Competition Council has also been extremely active over the past year, as stated by Bogdan Chiritoiu, the authority’s president, during a press conference presenting the annual report. During 2015 there were 13 investigations into possible competition infringements, four more than in the previous year. ” Of these, 46 percent concern possible horizontal agreements (cartels) and 15 percent look at possible abuses of dominant position,” Chiritoiu explained.

Investigations targeted the distribution of electricity, distribution of films to cinemas, the insurance market, the market of transport by taxi in the city of Iasi, electricity meters and electricity measurement services, the market of maintenance and spare parts for equipment that ensure the safety of vessels in the Black Sea border.

“The Competition Council has completed 21 investigations of violations of the Competition Law, compared to 17 in 2014. Fourteen of the 21 cases dealt with vertical agreements and 7 of 21 cases concerned cartel or abusive acts,” the Council’s representative stated. This has led to an increase in fines given by 12 percent over 2014, totaling EUR 53 million.

The agency has also organized eight actions of unannounced inspections at 61 work points throughout the year.

The Competition Council had standing to 198 cases, down 5 percent compared to 2014. The percentage of irrevocable judgments favorable to competition increased to 100, while the percentage of favorable definitive decisions fell to 90 percent.

“With regard to maintaining the level of sanctions by the courts, the percentage of irrevocably kept fines increased by 15 percentage points, reaching 82 percent,” concluded the Competition Council president.

Clifford Chance Badea forecasts that during 2016, both globally and nationwide, there could be fewer infringement decisions, but higher combined fines, with the focus of investigations shifting towards markets that impact a larger number of users. “As a result, we may see an increase in related litigation, including claims for compensation from companies that have been sanctioned by competition authorities,” the statement shows.

With simultaneous investigations in several jurisdictions becoming common practice, the Competition Council is expected to increase its cooperation with other state authorities.

While focus on possible cartel activities is expected to increase, pundits say new commercial activities will come to attention. More investigations are to be expected in online commerce, IT, retail, as well as the management of big data.

The online stays an important source for investigations, with the authorities looking more and more into company public statements (press releases, financial reports or investors-related information, financial predictions, strategies and price expectations, press interviews, etc.), as well as employees’ social media accounts, analyses and statistics presented at industry conferences.

Natalia Martian

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