Annual Report on Competition Policy Developments in Croatia
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Organisation for Economic Co-operation and Development DAF/COMP/AR(2018)22 Unclassified English - Or. English 30 April 2018 Directorate for Financial and Enterprise Affairs COMPETITION COMMITTEE Cancels & replaces the same document of 12 April 2018 Annual Report on Competition Policy Developments in Croatia -- 2017 -- 6-8 June 2018 This report is submitted by Croatia to the Competition Committee FOR INFORMATION at its forthcoming meeting to be held on 6-8 June 2018. JT03430967 This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 2 │ DAF/COMP/AR(2018)22 Table of contents 1. Changes to competition laws and policies, proposed or adopted .................................................. 3 1.1. Summary of new legal provisions of competition law and related legislation ............................. 3 1.2. Other relevant measures, including new guidelines ...................................................................... 4 1.3. Government proposals for new legislation ................................................................................... 4 2. Enforcement of competition laws and policies ................................................................................ 5 2.1. Action against anticompetitive practices, including agreements and abuses of dominant positions ............................................................................................................................................................. 5 2.2. Mergers and acquisitions .............................................................................................................. 8 3. The role of competition authorities in the formulation and implementation of other policies, e.g. regulatory reform, trade and industrial policies .............................................................................. 12 4. Resources of competition authorities1 ........................................................................................... 14 4.1. Resources overall (current numbers and change over previous year): ....................................... 14 4.2. Human resources (person-years) applied to: ............................................................................... 16 4.3. Period covered by the above information: 1 January-31 December 2017 .................................. 16 5. Summaries of or references to new reports and studies on competition policy issues .............. 16 Figures Figure 1. Number of employees in the Agency in the period of 1997 – 2017 ...................................... 14 Figure 2. Employees structure by the degree of professional qualification .......................................... 15 Figure 3. Employee structure by age ..................................................................................................... 15 ANNUAL REPORT ON COMPETITION POLICY DEVELOPMENTS IN CROATIA Unclassified DAF/COMP/AR(2018)22 │ 3 1. Changes to competition laws and policies, proposed or adopted 1.1. Summary of new legal provisions of competition law and related legislation 1. The Croatian Competition Agency (the Agency; CCA), a legal person with public authority, was established by the Decision of the Croatian Parliament of 20 September 1995 and became operative in early 1997. The CCA independently and autonomously performs the activities within its scope and powers regulated under the Competition Act1 (Official Gazette 79/09) and the Act on the Amendments to the Competition Act (Official Gazette 80/13). The CCA is accountable for the delivery of its objectives to the Croatian Parliament. During 2017, there were several changes in the existing legislative framework. 2. The Damages Act for the infringement of competition law was adopted and started being implemented in July 2017. The act transposes the 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 for infringements of the competition law provisions of the Member States and of the European Union into the Croatian national law. According to the Directive and new Act the actions for damages may be filed by any natural or legal person that has suffered harm on the account of the infringement of competition rules but also by any citizen – consumer or competitor in the market in which competition has been distorted, or a legal person that believes it has been paying a higher price of goods or services or works due to the infringement of competition rules. The compensation for damages will be decided in first instance by the Croatian commercial courts that generally rule in the compensation for damages procedures in other related areas. Now, when the Act on Damages entered into force, the undertakings that have been involved in the infringement of competition provisions may face the risk of being sued for damages. The harm will be properly quantified in the claims for damages whereas the courts will decide on the amount of compensation. The new provisions will ensure the deterrent effect on undertakings and send a clear message that the violation of competition does not pay. 3. Leniency Regulation has been amended by the adoption of the Regulation on the amendments of the Regulation on immunity from fines and reduction of fines. First purpose of the amendments of Leniency Regulation is to align completely its legal terminology with the new Law on Damages Claims for the breach of competition rules which transposes EU Damages Directive 2014/104 in Croatian legislation. This refers primarily to the definition of leniency statement which is now aligned with the Law on Damages Claims for the breach of competition rules. Secondly, the amendments for the first time introduce summary applications in Croatian Leniency Regulation. The new chapter “Summary applications” regulates the possibility for the leniency applicant to submit summary applications either for immunity or for reduction of a fine to the Croatian Competition Agency or to other national competition authority which the applicant considers might be ‘well placed” to act in cases when the European Commission is ‘particularly well placed’ to deal with a case relating to the establishment of breach of Article 101. of the TFEU. Thus, main change of the Leniency regulation includes the introduction of summary applications in the cases when the leniency applicant firstly submits its application to the European Commission for the same cartel 1 http://www.aztn.hr/ea/wp-content/uploads/2015/06/COMPETITION-ACT-2009.pdf ANNUAL REPORT ON COMPETITION POLICY DEVELOPMENTS IN CROATIA Unclassified 4 │ DAF/COMP/AR(2018)22 on the EU market. Other minor amendments relate to the adjustment of the legal terms from the Leniency Regulation with the EU Damages Directive 2014/104. 1.2. Other relevant measures, including new guidelines 4. The Act on prohibition of unfair trading practices in the business-to-business food supply chain (UTP Act) was adopted in December 2017 and since then the CCA broadened its competence to become implementing body for the unfair trading practices in the business-to-business food supply chain. Transition period for suppliers, buyers, processors and re-sellers lasted until 31 March 2018 when all the contracts that had to be concluded before, must be brought in compliance with the UTPs provisions. Otherwise they became null and void as of 1 April 2018. During the preparation of this legislation, the Agency's representative was a member of the working group as an institution representative who understands the issue of the relationship between large and small undertakings / producers with traders, or the problem of negotiating power of undertakings. Namely, before the food product reaches the final consumer, it passes through a supply chain that makes a number of different market actors (manufacturers, processors, traders, etc.) who add their contribution in terms of product quality and value. But due to recent phenomena such as increased market concentration, undertakings in the chain have very different levels of negotiating power. Although differences in negotiating power are a common and legitimate occurrence in trade relations, imbalances sometimes may be so much that they lead to so-called unfair trading practices. The European Commission has identified four main forms of unfair trading practices applied by traders: retroactive abuse of vague or incomplete terms of contract, excessive and unforeseeable transfer of costs or risk to the other party, use of confidential information and unfair termination of business relationship. In order for the undertakings to more easily adjust their contracts and practices with this new law, the CCA also prepared and published on its website guidelines for all involved stakeholders with answers to the questions that were gathered during the transitional period until the full application of the Act. 5. Last year was especially marked by the specific task of the Agency to work on the Proposal of the EU Directive to empower the competition authorities of the member states to be more effective enforcers and to ensure the proper functioning of the internal market. The CCA actively participated and chaired the Croatian delegation in the competition working group of the Council of the EU where the texts of the proposal were discussed and negotiated. In October 2017,