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Ţuca Zbârcea & Asociaţii: Getting the Deal Through – Dominance 2014

February 2014 - EU & Competition. Legal Developments by Tuca Zbarcea & Asociatii.

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The Romanian Competition Council (RCC) practice has defined dominance by referring to cases where an undertaking is able to behave, to an appreciable extent, independently towards its competitors or clients on the relevant market.

 

The abusive behaviour of dominant firms is prohibited by article 6 of the Romanian Competition Law No. 21/1996 (the RCL) and article 102 of the Treaty on the Functioning of the European Union (TFEU).

Article 6 expressly prohibits the abusive use of a dominant position held by one or more undertakings on the Romanian market or on a substantial part of it. According to the RCL, abusive practices may inter alia consist in:

•           directly or indirectly imposing unfair selling or purchase prices, tariffs or other unfair trading conditions and the refusal to deal with specific suppliers or beneficiaries;

•           limiting production, trade or technical development to the prejudice of the consumers;

•           applying dissimilar conditions to equivalent transactions with other trading parties thereby placing them at a competitive disadvantage;

•           making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations, which neither by their nature nor according to commercial usage, have any connection with the subject of such contracts;

•           using excessive or predatory prices for the purpose of excluding the competitors or selling to export below the production cost by covering the differences through imposing higher prices to internal consumers; or

•           exploiting the economic dependence of an undertaking, which does not have an alternative solution under equivalent conditions and terminating the contractual relations for the sole reason that the partner refuses to obey unjustified trade conditions.

The attempt of a non-dominant player to gain market shares through an aggressive M&A strategy would normally be subject to merger control and censured, if necessary, within this context. Under the RCL, article 12, the RCC may prohibit the economic concentrations that lead or might lead to a significant restriction of effective competition on the Romanian market or any part thereof, in particular, by creating or strengthening a dominant position. The authority has, however, made limited use of this provision, preferring to impose remedies on the merging parties.

The RCL is primarily enforced by the RCC. Its decision-making structure consists of seven members appointed by the president of Romania at the government's proposal, who are assisted in their activity by competition inspectors who are public officials with specific attributions. The RCC may initiate an investigation on abuse of dominant position ex officio or upon complaint.

"Reproduced with permission from Law Business Research Ltd. This article was first published in Getting the Deal Through - Dominance 2014, (published in December 2013; contributing editors: Thomas Janssens and Thomas Wessely, Freshfields Bruckhaus Deringer) For further information please visit www.GettingTheDealThrough.com."

Raluca Vasilache, Anca Jurcovan and Andreea Oprişan, Ţuca Zbârcea & Asociaţii

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