March 06, 2019 10:17 
It appears that the Romanian Competition Council is boosting its engines and it wouldn’t be a speculation if we said that we will be witnessing an “airstrike” of competition enforcement. We expect that 2019 will be a rocky year for companies operating in Romania from the perspective of competition law enforcement.
The Romanian Competition Council remains a top authority that operates at European standards, with an activity that, in certain areas, exceeds that of the neighbouring states’ competition authorities.
Introduction
The Romanian Competition Council remains one of the strongest authorities, with significant experience and a reputation acquired especially through the major fines imposed in recent cases. 2018 had great potential from a sanctioning perspective, the level of fines ranking second in the authority’s track record.
The authority sanctioned on a large scale, covering both large multinationals and small local players. Also, the settlement procedure (which implies an admission of guilt) continued to be largely used to boost the successful cases of the Competition Council.
Certain investigations launched by the authority were influenced by similar proceedings embarked upon by the European Commission or by other competition authorities (for example, the investigations conducted in the field of energy, e-commerce, wholesale of medical products), whereas some are localized (for example, the investigation on the industrial salt market or the newly launched investigation on the cement market)
We present below the trends and areas to watch for in 2019. Our estimations and predictions consider the recent practice of the authority (in the last years), as well as the economic perspectives in Romania.
Forecast
-
Competition law infringement investigation
It is expected that the number of new investigations will grow, especially since several major cases have been finalised in 2018 and the authority has resources available to launch new ones. This is backed up also by the fact that in Romania there is a growth of enforcement in general (in all areas of law) and the Romanian Competition Council is, traditionally, one of the top collectors for the State Budget (when considering the high level of fines imposed on the entities).
The number of new investigations will most likely be above last years’ average (namely, we expect at least 15 new investigations to be opened in 2019). Depending on the economic evolutions of the market in Romania, we may not exclude the case where the number of new investigations would be even higher.
The end of 2018 finds the Romanian competition authority with more than 35 ongoing investigations. Also, in 2018, the Romanian Competition Council has finalized a large number of important investigations, such as the ones on the insurance (MTPL), food retail, payment and SMS advertising markets, as well as the ones regarding travel agencies or public tenders on several markets. Unlike previous years, the Romanian Competition Council’s decision-making activity was no longer exclusively concentrated in December, but rather there was a longer timeframe in which hearings were held and deliberations took place which led to significant sanctions.
Also, 2018 marked the launch of several new investigations, the most important ones being the ones on the cement, personal protective equipment, eggs or immunoglobulin markets (in this case simultaneous dawn raids took place in Romania, Belgium and Italy).
What to expect in 2019:2019 might bring an increase in the number of complaints, as well as several investigations launched ex officio. The reputation of the authority and the recently finalised cases (with large media exposure) will continue to attract interest for complaints, some of which will lead to new investigations. The timeframe for completion of an investigation may be reduced (as part of the efficiency policy of the authority), but the average duration of an investigation will not be reduced under 2-3 years.
The key economic industries will remain the main targets, especially the banking and finance sector, energy, e-commerce and pharma industries. Considering that such areas have a significant impact on the Romanian population, as well as considering the increased legislative changes in such areas, it is expected that the enforcement will increase and the competition authority may be inclined to conduct inquiries in these industries.
-
Sector inquiries
Sector inquiries will remain one of the most efficient tools to gather market knowledge and expertise in a specific industry. The mechanism frequently employed by the European Commission has been successfully mirrored at national level, therefore there’s a tendency of increasing the number of new sector inquiries (which would allow the authority to better understand the specificities of the industries and the potential sensitive areas).
In 2018, sector inquiries were launched on the production and marketing of non-prescription drugs and food supplements markets. We expect that the inquiries will result in proposals for legislative changes (perhaps in the food supplements market) or even in targeted investigations regarding potential competition law infringements.
What to expect in 2019: In 2019 we expect that new technologies and innovation will be targeted by the authority. Thus, we also expect the IT and financial services sectors to remain the focus of the competition authorities. Also, the sectors with a high population impact (energy, natural resources, medicine and supplements or e-commerce) will remain of interest for the Romanian Competition Council.
-
Sanctions
The Romanian competition sanctioning system allows fines up to 10% of the aggregate turnover of the sanctioned entity. Whereas in 2016 the Romanian Competition Council applied fines up to RON 68,438,985.74 (approx. EUR 15.20 million) and in 2017 the amount raised substantially to RON 123,110,219 (EUR 27.35 million), 2018 brought an exponential increase in fines. Without counting all the cases and taking into consideration only the major fines imposed, the Romanian Competition Council managed to “generate” for the State budget over EUR 90 million (the most productive year being the one marking the sanctioning of the oil companies in the Eco Premium case where the aggregate level of fines was approximatively EUR 200 million).
What to expect in 2019:2018 exceeded the expectations in relation to the imposed sanctions (this was both due to the higher number of the finalized cases and to the increasing severity of the fines imposed). The fine value is expected to be maintained at a high level in 2019 as well, especially taking into consideration that other key cases are supposed to be finalized. Moreover, the increase in the severity of the fines appears to be an irreversible process that may severely affect the markets on which the sanctions will be imposed. Also, the high level of fines will increase the pressure on the investigated companies to engage in discussions regarding potential settlements.
-
Dawn raids
In 2018, the Romanian Competition Council continued using the dawn raid instrument as the main tool to gather information. Also, forensic inspections remained largely attractive to the authority.
What to expect in 2019: Although it’s difficult to estimate whether the number of dawn raids will increase, it’s expected that it will remain the main tool for collecting data and information by the competition authority. Moreover, the complexity of these procedures requires special training, therefore the dawn raids topic remains important in any competition compliance program. In addition to that, we expect forensic procedures to maintain a high incidence rate and to continue being used as an efficient way to collect data.
-
Appealing the Romanian Competition Council decisions
Compared to 2016, a slight increase of approximately 7% (189 cases, as opposed to 173) was recorded in 2017. It appears that the companies no longer remain passive to a sanctioning decision, as the number of appeals grew even more in 2018.
What to expect in 2019:
The growth trend regarding the number of court challenges will maintain in 2019, taking into account the high number of important sanctioning decisions issued in 2018. We expect some key decisions from the Bucharest Court of Appeal or from the Supreme Court that will bring some clarity on the standard of proof and the computation mechanisms of the fines imposed by the authority. Also, we expect private damages actions to be brought before Romanian courts and to become a key factor in competition cases.
