ISSN 1689-9024
Vol. 2015, 8(11)
CENTRE FOR ANTITRUST AND REGULATORY STUDIES University of Warsaw EDITORIAL BOARD Prof. Tadeusz Skoczny – Editor-in-Chief, CARS Director Dr. hab. Agata Jurkowska-Gomuïka – Section Editor (Antitrust), University of IT and Management in Rzeszów Ewelina D. Sage, Ph.D. (OXON) – Section Editor (Audiovisual Services), CARS International Coordinator Prof. Andrzej Szablewski – Section Editor (Energy & Telecommunications), Technical University in ódě Prof. Tomasz Zalega – Editor (Economics of Antitrust & Regulation), University of Warsaw, Faculty of Management
SCIENTIFIC BOARD Prof. Anna Fornalczyk, Chairwoman – COMPER Consulting firm; former President of the Antimonopoly Office Prof. Stanisïaw PiÈtek, Vice-Chairman – University of Warsaw, Faculty ofbManagement Prof. Eleanor Fox – New York University, School of Law Prof. Katarina Kalesná – Comenius University in Bratislava, Faculty of Law Prof. Janusz Lewandowski – Warsaw University of Technology, Institute of Heat Engineering Prof. Johannes Masing – University of Freiburg; judge at the Federal Constitutional Court in Karlsruhe Prof. Alojzy Z. Nowak – Vice-Rektor of the University of Warsaw Prof. Gheorghe Oprescu – Polytechnic University of Bucharest, Romania Prof. Jasminka PecotiÊ Kaufman – University of Zagreb, Faculty of Economics and Business, Department of Law Prof. Jürgen Säcker – Free University of Berlin, Institute for German and European Business, Competition and Regulation Law Prof. Stanisïaw Soïtysiñski – Soïtysiñski Kawecki & SzlÚzak LPP Prof. Andrzej SopoÊko – University of Warsaw, Faculty of Management; former President of the Competition and Consumer Protection Office Prof. Rimantas Stanikunas – Vilnius University, Faculty of Economics; former Chairman of the Competition Council of the Republic of Lithuania Prof. Luboă Tichy – Charles University, Prague, Faculty of Law Prof. Tihamér Tóth – Pázmány Catholic University in Budapest Prof. Richard Whish – University of London, Kings College Prof. Marek Wierzbowski – University of Warsaw, Faculty of Law and Administration; attorney-in-law Prof. Irena Wiszniewska-Biaïecka – judge of the General Court of the European Union Prof. Anna Zieliñska-GïÚbocka – Univeristy of Gdañsk, Faculty of Economics; member of the Monetary Policy Council
EDITORIAL OFFICE Centre for Antitrust and Regulatory Studies (CARS) University of Warsaw, Faculty of Management PL – 02-678 Warszawa, 1/3 Szturmowa St. Tel. + 48 22 55 34b126; Fax. + 48 22 55 34b001 e-mail: [email protected] www.cars.wz.uw.edu.pl; www.yars.wz.uw.edu.pl YEARBOOK of ANTITRUST and REGULATORY STUDIES
Volume Editor: AGATA JURKOWSKA-GOMUŁKA
Vol. 2015, 8(11)
CENTRE FOR ANTITRUST AND REGULATORY STUDIES University of Warsaw Centre for Antitrust and Regulatory Studies University of Warsaw, Faculty of Management
Fifty sixth Publication of the Publishing Programme
Copyright by Wydawnictwo Naukowe Wydziału Zarządzania Uniwersytetu Warszawskiego, Warszawa 2015
Language editor: Ewelina D. Sage (English); Maciej Gac (French)
Statistic editor: Prof. Jerzy Wierzbiński
Cover: Dariusz Kondefer
ISSN 1689-9024
The original (reference) version of the journal is printed.
PUBLISHER University of Warsaw Faculty of Management Press PL – 02-678 Warsaw, 1/3 Szturmowa St. Tel. (+48-22) 55-34-164 e-mail: [email protected] www.wz.uw.edu.pl
LAYOUT ELIPSA Publishing House PL – 00-189 Warszawa, 15/198 Inflancka St. Tel./Fax (+48-22) 635-03-01; (+48-22) 635-17-85 E-mail: [email protected]; www.elipsa.pl YEARBOOK OF ANTITRUST AND REGULATORY STUDIES VOL. 2015, 8(11)
Contents
Editorial foreword ...... 7 Invitation to the International Conference on the Harmonisation of Private Antitrust Enforcement: A Central and Eastern European Perspective, Supraśl (Poland), 2–4 July 2015 ...... 9
ARTICLES
ZURAB GVELESIANI, Need for Competition Law – Discussing the Case of Georgia ...... 13
RAIMUNDAS MOISEJEVAS, Development of Private Enforcement of Competition Law in Lithuania ...... 35
MACIEJ GAC, Individuals and the Enforcement of Competition Law – Recent Development of the Private Enforcement Doctrine in Polish and European Antitrust Law ...... 53
MARCIN KULESZA, Leniency – the Polish Programme and the ‘Semi- formal’ Harmonisation in the EU by the European Competition Network ...... 83
ORHAN M. ÇEKU, Competition Law in Kosovo: Problems and Challenges ...... 101
ERMAL NAZIFI, PETRINA BROKA, Review of Ten Years of Albanian Competition Law Developments ...... 129
EWA M. KWIATKOWSKA, Economic Determinants of Regulatory Decisions in the Polish Telecommunications Sector ...... 149
VOL. 2015, 8(11) 4 CONTENTS
NATIONAL LEGISLATION REVIEWS
TADEUSZ SKOCZNY, 2014 Amendment of the Polish Competition and Consumers Protection Act 2007 ...... 165
PETRA JOANNA PIPKOVÁ, IVO ŠIMEČEK, New Procedural Notices of the Czech Office for the Protection of Competition: Leniency, Settlement, and Alternative Problem Resolution ...... 185
RAIMUNDAS MOISEJEVAS, MONIKA DAPKUTĖ, Competition Policy Developments in Lithuania in 2013 ...... 205
SOLOMON MENABDISHVILI, Recent Developments in the Competition Law of Georgia. Changes Resulting from the Association Agreement ...... 213
HANNA STAKHEYEVA, Protection of Legal Professional Privilege in the European Union, Turkey and Ukraine ...... 227
CASE COMMENTS
ALEXANDR SVETLICINII, The objectives of competition law and the effective conduct of the infringement proceedings: Judgments of the Court of Bosnia and Herzegovina in BH Telecom and Telekomunikacije RS. Case comment to the Judgments of the Court of Bosnia and Herzegovina No. S1 3 U 003765 10 U of 24 April 2013 (BH Telecom) and No. S1 3 U 007875 11 U of 10 October 2013 (Telekomunikacije RS) ...... 241
SILVIA SRAMELOVA, ONDREJ BLAZO, The First Bid Rigging Case in Slovakia After Years of Judicial Disputes ...... 249
DARIUSZ AZIEWICZ, Due Process Rights in Polish Antitrust Proceedings. Case comment to the Judgment of the Polish Supreme Court of 3 October 2013 – PKP Cargo S.A. v. President of the Office of Competition and Consumers Protection (Ref. No. III SK 67/12) ...... 261
MAŁGORZATA SIERADZKA, A Departure from a Formalistic Approach in the Assessment of Restrictive Vertical Agreements in Favour of a More Economics-Based Approach? Case Comment to the Supreme Court Judgment of 15 May 2014 (Ref. No. III SK 44/13) ...... 269
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES CONTENTS 5
BOOK REVIEW & REPORTS Małgorzata Król-Bogomilska, Zwalczanie karteli w prawie antymonopolowym i karnym [Combating cartels in antitrust and criminal law], Warszawa 2013, 511 p. Reviewed by AGATA JURKOWSKA-GOMUŁKA ...... 277 Kseniya Smyrnova, Pravove regulyuvannya konkurencii v Evropeis’komu Soyuzi: teoriya i praktuka [Legal Regulation of Competition in European Union: theory and practice], Odessa 2015, 432 p. Reviewed by KOROTKYI TYMUR ...... 283 Kseniya Smyrnova, EU Competition Law, Odesa 2013, 144 p. Reviewed by ROMAN PETROV ...... 287
CONFERENCE REPORT The Milestones of Law in the Area of Central Europe 2014. Casta-Papernicka (Slovakia), 27–29 March 2014 Reported by MACIEJ GAC ...... 289
BIBLIOGRAPHY 2013 & 2014 (Poland and selected CEE & Balkan countries: Estonia, Lithuania, Serbia, Slovakia) ...... 291
REVIEWERS OF YARS IN 2013 AND 2014 ...... 319
ARTICLES IN YARS 2008–2014 ...... 321
VOL. 2015, 8(11)
Editorial foreword
The Editorial Board is pleased to present the 11th volume of the Yearbook of Antitrust and Regulatory Studies (YARS 2015, 8(11)). This volume continues YARS’s new mission – presenting developments in antitrust and sector-specific regulation not only in Central and Eastern Europe, as originally envisaged, but also in the Balkans and Caucasus region. YARS has thus invited, for the very first time, authors from Georgia. The first article in YARS 2015, 8(11) was written by Zurab Gvelesiani. The paper concerns the problem of the need and the necessity of the existence of competition law specifically in small economies (relatively small countries). The problem is presented with reference to the case of Georgia where competition law was abolished in 2005 only to be later re-established (as described in another paper contained in the current volume). Two following papers are dedicated to the development of private enforcement of competition law – Raimundas Mojsejevas wrote about Lithuania while Maciej Gac focused on Poland. Both authors stress the rather poor condition of this method of antitrust enforcement in Lithuania and Poland, specially comparing to some other EU Member States. They also try to identify the main barriers to making private enforcement more common in their countries of origin. In his paper, Marcin Kulesza analyzes Polish legislation and enforcement practice on leniency in a wider European context. Polish leniency is quite specific as it covers not only cartels but also vertical restraints. The author tries to make a comparison between Polish legal solutions and the Leniency Model Programme introduced by the European Competition Network. Special attention should be paid to articles presenting competition law developments in two Balkan countries: Albania (Ermal Nazifi and Petrina Broka) and Kosovo (Orhan Ceku). The two papers create a unique opportunity to broaden foreign knowledge on the legislation and jurisprudence of some of the youngest antitrust regimes in Europe. The final article in the current volume of YARS is also the only one concerning problems of sector-specific regulation. The author, Ewa Kwiatkowska, delivers a thorough and interesting presentation of economic
VOL. 2015, 8(11) 8 EDITORIAL FOREWORD determinants of regulatory decisions in the Polish telecommunications sector. The current volume of YARS contains also a number of legislative and jurisprudential reviews. It opens with a paper by Tadeusz Skoczny (CARS Director, YARS Editor-in-Chief) focusing on a crucial amendment to the Polish Act on Competition and Consumer Protection that entered into force in January 2015. Solomon Menabdishvili presents recent changes to Georgian competition law that resulted from the EU Association Agreement. Petra Joanna Pipková and Ivo Šimeček draw the readers’ attention to new procedural notices issued by the Czech Office for the Protection of Competition (on leniency, settlement, alternative problem resolution). Raimundas Moisejevas and Monika Dapkute consider amendments to Lithuanian competition law in 2013. Finally, Hanna Stakhyeva reviews rules for protecting legal professional privilege in the EU, Turkey and Ukraine. The next part of YARS 2015, 8(11) is devoted to case comments. They include a discussion on the objectives of competition law and the effective conduct of infringement proceedings in judgments rendered by a court in Bosnia and Hercegovina (Alexandr Svetlicini); an analysis of Slovak jurisprudence on bid rigging (Ondrej Blažo and Silvia Sramelova); an assessment of a judgment of the Polish Supreme Court delivered in an vertical price agreement case (Małgorzata Sieradzka) and; an analysis of another judgment delivered by the Polish Supreme Court but this time regarding rules of due process in Polish antitrust procedure (Dariusz Aziewicz). In its book review section, the current volume of YARS presents the reviews of one competition law book published in Poland in 2013 and 2015, as well as two such books published in Ukraine in 2014 and 2015. Finally, YARS 2015, 8(11) contains a conference report by Maciej Gac. The volume closes with antitrust and regulatory bibliography for 2013 and 2014 that covers Poland, Estonia, Serbia and Slovakia. The Editorial Board would like to take this opportunity to encourage the readers of YARS to participate in a conference on private enforcement of competition law co-organised by CARS which will be held in Supraśl (Poland) in July 2015 (the current volume contains an invitation to the conference). The next regular volume of YARS will be published at the beginning of 2016. A call for papers will be announced shortly on the YARS website.
Warsaw, March 2015 Prof. Agata Jurkowska-Gomułka YARS Volume Editor
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INVITATION to the International Conference on the Harmonisation of Private Antitrust Enforcement: A Central and Eastern European Perspective, Supraśl (Poland), 2–4 July 2015
Białystok–Warsaw, 2 April 2015
Dear Colleagues, It gives us great pleasure to invite you to the International Conference on the Harmonisation of Private Antitrust Enforcement: A Central and Eastern European Perspective. The Conference is organised by the Faculty of Law of the University of Białystok and the Centre for Antitrust and Regulatory Studies of the University of Warsaw and will be held on 2–4 July 2015 in Supraśl. The Conference will provide a forum for the presentation and discussion of original contributions on a whole spectrum of topics relating, in particular, to the Damages Directive 2014/104/EU (Directive 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. The proceedings of the Conference are going to be published in YARS 8(12). The event includes the following speakers (in alphabetical order): • Ondrej Blažo (PhD, Comenius University in Bratislava, Faculty of Law), Directive on Antitrust Damages Actions and Current Changes of Slovak Competition and Civil Law • Marco Botta (Assist. Prof., University of Vienna, Austria) & Alexandr Svetlicinii (Assist. Prof., University of Macau, Makau, China), “Umbrella Pricing” in Private Enforcement of EU Competition and U.S. Antitrust Law: Another Transatlantic Divergence? • Petrina Broka (PhD, University of Tirana, Albania) & Ermal Nazifi (PhD cand., University of Tirana, Albania), Grounds For the Private Enforcement of Albanian Competition Law
VOL. 2015, 8(11) 10 INVITATION
• Vlatka Butorac Malnar (Assoc. Prof., University of Rijeka, Croatia), EU Directive on Antitrust Damages – Should We Call in the Expert Witness? • Katalin J. Cseres (Assoc. Prof., University of Amsterdam, the Netherlands), Harmonising Private Enforcement of Competition Law in Central And Eastern Europe: The Effectiveness of Legal Transplants Through Consumer Collective Actions • Aleš Galič (Prof. University of Ljubljana, Slovenia), Disclosure of Documents in Private Antitrust Enforcement Litigation • Anzhelika Gerasymenko (PhD, Assist. Prof., Kyiv National University of Trade and Economics) & Nataliia Mazaraki (PhD, Assist. Prof., Kyiv National University of Trade and Economics), Antitrust Damages Actions in Ukraine: Current Situation and Perspectives • Anna Gulińska (legal advisor, Salans FMC SNR Denton Oleszczuk sp.k., Warsaw, Poland), Collecting Evidence Through Access to Competition Authorities’ Files – Interplay or Potential Conflicts Between Private and Public Enforcement Proceedings? • Zurab Gvelesiani (PhD cand., Central European University, Budapest, Hungary), The Georgia’s First Steps in Competition Law Enforcement: The Role and Perspectives of the Private Enforcement Mechanism • Agata Jurkowska-Gomułka (Prof., University of Information Technology and Management, Rzeszów, Poland), How to Throw the Baby Out With the Bath Water. A Few Remarks on the Currently Accepted Scope of Civil Liability for Antitrust Damages • Raimundas Moisejevas (Dr., MykolasRomeris University, Vilnius, Lithuania), Consensual Approach to Antitrust Enforcement • Anna Piszcz (Prof. of the University of Białystok, Poland), Piecemeal Harmonisation? Remarks on What Received Too Little Attention in the Damages Directive • Rafał Sikorski (Prof., University of Adam Mickiewicz, Poznań, Poland), Claims by Consumers as Indirect Purchasers • Rimantas Antanas Stanikunas (Prof. dr., Vilnius University, Lithuania) & Arunas Burinskas (PhD cand., Vilnius University, Lithuania), Interaction of Public and Private Enforcement of Competition Law in Lithuania • Dominik Wolski (PhD, legal advisor, Poland), How the Enforcement of Private Antitrust Claims Will Change as a Result of the Implementation of the Damages Directive? The event is going to be accompanied by the first meeting of CRANE (Competition Law and Regulation. Academic Network. Europe – Visegrad, Balkan, Baltic, East) – a new academic network initiated by the Centre for Antitrust and Regulatory Studies (see YARS 7(9), p. 261–261).
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INVITATION 11
For the program of the Conference and more information (e.g. on how to book a place), please visit: http://www.prawo.uwb.edu.pl/prawo_new/wydzial. php?p=1437.
We look forward to seeing you in Supraśl in July 2015.
Prof. Tadeusz Skoczny Centre for Antitrust and Regulatory Studies, University of Warsaw
Prof. Anna Piszcz (Chair of the Conference Organising Committee) Faculty of Law, University of Białystok [email protected]
VOL. 2015, 8(11)
A R T I C L E S
Need for Competition Law – Discussing the Case of Georgia
by
Zurab Gvelesiani*
CONTENTS
I. Introduction II. Twisted path of Georgian competition law III. The reasons and motivation for re-introducing competition law in Georgia IV. The impact of the abolition of Georgia’s Antimonopoly Law in 2005 V. Competition law – challenges and expectations VI. Conclusions
Abstract
The article deals with the question whether the market needs to be regulated and if competition law is a desirable regulatory instrument for developing countries such as Georgia. This issue is not merely theoretical in nature, but reflects Georgia’s actual developments throughout the last decade when the country first repelled its existing antimonopoly law, since it was seen as unnecessary and hindering economic development, and yet later reintroduced it once again. For years Georgia was not regulating its market and, as the newly set up Competition Agency is starting to take its first steps, the question of the rationality for pro-competitive state intervention raises again. The chosen jurisdiction is unique for its unusual development path and history. It is even more special because of this particular point in time, witnessing the birth-phase of yet another competition law jurisdiction and the launching of its competition law enforcement authority. The article is dedicated to questions which are widely disputed in society, among politicians, in the media, within the local NGO sector etc. However, the academic community has not yet written much about
* Zurab Gvelesiani, PhD candidate, Central European University, Budapest; Gvelesiani_ [email protected].
VOL. 2015, 8(11) 14 ZURAB GVELESIANI
them. This paper aims to fill this gap and encourage further academic discussion on this topic. Due to the limited number of academic sources and case-law in this field, a variety of sources has been used in this paper including: dissertations, reports of international organizations and local NGOs, personal interviews, blogs and so forth. The article is divided into sections. It starts by reviewing the evolution of competition law in Georgia and demonstrates its illogical development pattern. It moves on to outline the background and motivations present in Georgia at moments when breakthrough decisions were taken regarding its competition law regime. The article describes and analyses processes that took place on the un-regulated Georgian market in the last ten years. Based on the findings, it researches the question of the desirability of competition law, that is, whether Georgian market needs such state intervention, and what are the main challenges facing the effective enforcement of its recently adopted competition law.
Résumé
L’article porte sur la question de savoir si le marché doit être réglementé et si le droit de la concurrence représente un instrument réglementaire souhaitable pour les pays en voie de développement comme la Géorgie. Cette question n’est pas purement théorique, mais elle reflète l’évolution réelle de la Géorgie à travers la dernière décennie, lorsque le pays a tout d’abord abrogé sa législation anti-monopole existante, considérée comme inutile et gênante le développement économique, pour la réintroduire après. Pendant des années, la Géorgie ne réglementait pas son marché, mais quand l’Agence de la concurrence nouvellement créée commence à faire ses premiers pas dans ce domaine, la question de la rationalité de l’intervention étatique se pose à nouveau. La juridiction choisie est unique pour son chemin de développement inhabituelle et son histoire. Elle est encore plus particulière à l’heure actuelle, car elle nous permet d’assister à la naissance d’une autre juridiction du droit de la concurrence et à la création de son autorité de la concurrence. L’article est consacré aux questions largement discutées dans la société, parmi les politiciens, dans les médias, dans le secteur des ONG locales, etc. Cependant, la doctrine juridique n’a pas encore beaucoup écrit sur ces questions. Cet article vise à combler cette lacune et à encourager la discussion académique sur ce sujet. En raison du nombre limité de sources académiques et de la jurisprudence dans ce domaine, une variété de sources a été utilisé dans le présent article, y compris: des dissertations, des rapports des organisations internationales et des ONG locales, des entretiens, des blogs, etc. L’article est divisé en deux parties. Il commence par l’examen de l’évolution du droit de la concurrence en Géorgie et démontre le caractère illogique de ce processus. Il continue avec la description du contexte et des motivations présentes en Géorgie aux moments quand les décisions cruciales du point de vue du droit de la concurrence ont été prises. L’article décrit et analyse les processus non réglementées qui ont eu lieu sur le marché géorgien dans les dix dernières années. Sur base des résultats de ces recherches, l’article étudie la question de l’opportunité
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEED FOR COMPETITION LAW – DISCUSSING THE CASE OF GEORGIA 15
du droit de la concurrence, c’est-à-dire, si le marché géorgien besoin d’une telle intervention de l’Etat, et quels sont les principaux défis de l’application efficace du droit de la concurrence récemment adopté.
Classifications and key words: competition law; developing state; Georgia; market liberalization; necessity for market regulation; state intervention; transition.
I. Introduction
After more than two decades of earning its independence, rejecting a centrally-planned socialist economy, and starting developing a free and competitive market, Georgia seems to stand now at the starting point when it comes to market regulations. As its new Competition Law1 is about to get actually enforced, and the recently formed Competition Agency2 starts operating, part of the business sector and of the society remain uncertain and suspicious of whether competition law and its new enforcement authority are in fact necessary for the Georgian economy3. In the last decade, the Georgian market has been shaped by the laissez- faire4 slogan and the outcome does not seem healthy. A number of its markets have become oligopolized and lack transparency, there are signs of anticompetitive practices, existence of cartels and the abuse of power by dominant firms. On the other hand, its new competition law regime promises competitive markets, low prices, high quality of goods and services, production efficiency and dynamic economic development. What may seem self-evidently desirable remains, however, uncertain and disputed in Georgia. The article attempts to analyze the results of the 2005 ‘market liberalization’ reform. In response to the skepticism toward the adoption and enforcement of Georgia’s new Competition Law, the paper aims to answer the questions whether the national market needs such state intervention, as well as how satisfactory and sufficient are the steps taken in recent years. The paper will also examine the rationality of persistent societal fears and mistrust towards the launch of a new state authority.
1 Parliament of Georgia, Law of Georgia of 8 May 2012, No 6148-Iს on Competition 2 LEPL Competition Agency; official website: http://competition.ge/. 3 I. Lekvianidze, ‘What an effective competition policy should be like?’ Forbes Georgia, 13 February 2014. 4 Laissez-faire (French: ‘allow to do’), policy of minimum governmental interference in the economic affairs of individuals and society; Encyclopedia Britannica (available at: http://www. britannica.com/EBchecked/topic/328028/laissez-faire).
VOL. 2015, 8(11) 16 ZURAB GVELESIANI
Skepticism toward the desirability of market regulation based on competition law is born out of the unusual evolution of Georgian competition policy. The following section will briefly review the twisted path taken by Georgia until now and demonstrate the current stage of its development.
II. Twisted path of Georgian competition law
Georgia gained its independence in April 19915. After decades of living under the communist regime, the country stepped out of the ruins of the Soviet Union and entered the path of long and painful transitions. The collapse of the Soviet Union and the “victory” of capitalism quickly devaluated socialist ideas and enhanced the attractiveness of market economy and competition6. The need to start preparing grounds for a market economy was quickly realized in Georgia; from the first days of its independence, the government started working towards the creation of an appropriate legal framework7. The task was especially complicated by the fact that Georgia did not inherit a competition law culture or any traditions of the free market8. Build on Karl Marx’s ideas, the Soviet Union was designed to build a society without competition, profit or property9. In spite of its communist background, Georgia moved forward fast. Already one year after declaring its independence, the State Council adopted the Decree on the Limitation of Monopoly Activities and Development of Competition10. Alongside this Decree, some provisions on antimonopoly enforcement were included in other legal acts also such as: the law on Basic Principles of Entrepreneurial Activity, and the Decree of the Council of Ministers of Georgia on Measures for the De-monopolization of the National Economy. The enforcement of Georgia’s first antimonopoly rules was entrusted to the Ministry of Economy of Georgia which was also assigned to
5 For more information, see: http://www.government.gov.ge/index.php?lang_id=ENG&sec_ id=193. 6 M. Dabbah, International and Comparative Competition Law, Cambridge University Press, 2010, p. 8. 7 S. Fetelava, The Evolution of the Competition Theory and Antimonopoly regulation in Georgia, Grigol Bakradze State University, 2008, p. 15, 16. 8 Ibidem, p. 4. 9 D. Prychitko, Marxism, (for the Concise Encyclopedia of Economics) (available at: http:// www.econlib.org/library/Enc/Marxism.html). 10 E. Udesiani, Establishing Competition policy According to the Deep and Comprehensive Free Trade Agreement between Georgia and EU, p. 10 (available only in Georgian at: http://goo. gl/ik8kZQ).
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEED FOR COMPETITION LAW – DISCUSSING THE CASE OF GEORGIA 17 promote competition, protect consumers and support entrepreneurship11, as well as monitor the ongoing privatization process and avoid the formation of new private monopolies12. In August 1995, the Georgian Parliament adopted the Georgian Constitution. The principles of free market economy and related State obligations were underlined therein: The State shall be bound to promote free enterprise and competition. Monopolistic activity shall be prohibited, except as permitted by law. Consumer rights shall be protected by law13. In June 1996, the Parliament adopted the Law on Monopoly Activity and Competition14 (hereafter, Antimonopoly Law); an Antimonopoly Authority was created in the same year15. Thus started the most active period for market regulation in Georgia, which lasted until the beginning of the 2000s. In those years, the Antimonopoly Authority introduced European-style provisions, was working actively on cases of unfair competition and the abuse of dominance, revealed first cartel agreements, and established a State Registry for Monopolist Enterprises16. The European Bank for Reconstruction and Development assessed positively the effectiveness of the Authority in its report of 199917. From 2002 started the process of fragmentation and limitation of the powers of the Antimonopoly Authority. It was stripped of a number of its earlier rights, and certain fields and economic sectors were taken away from of its jurisdiction. Legal amendments created new barriers making market studies and analyses practically impossible for the Authority. Eventually, the efficiency and impact of the Antimonopoly Authority dramatically reduced18. The whole process ended in a complete rejection of the existing legal framework and institutions. The direction taken by Georgian competition policy since 1992 was changed by 180 degree and things started moving the opposite way19. In 2005,
11 K. Lapachi, M. Tivishvili, ‘Georgia’ [in:] Competition Regimes in the World – A Civil Society Report, 2006, p. 383–384. 12 S. Fetelava, The Evolution…, p. 17. 13 Parliament of Georgia, No. 786, of 24 August 1995, Constitution of Georgia, Article 30(2). 14 Parliament of Georgia, Law of Georgia of 25 June 1996 No. 288, on Monopoly Activity and Competition. 15 The president of Georgia, Edict of 28 Dec. 1996, No. 848 on the Antimonopoly Authority within the Structure of the Ministry of Economy of Georgia. 16 S. Fetelava, The Evolution…, p. 17–20. 17 Ibidem; European Bank for Reconstruction and Development, Transition Report, 1999, p. 132–145. 18 S. Fetelava, The Evolution…, p. 20–22. 19 Ibidem, p. 22.
VOL. 2015, 8(11) 18 ZURAB GVELESIANI new legislation was adopted that repealed Georgia’s existing antimonopoly rules and abolished the Antimonopoly Authority20. The new phase of Georgian market regulation, or better to say ‘non- regulation’, started in 2005 and has de facto lasted up until now. After shutting down the Antimonopoly Authority, a new Agency of Free Trade and Competition was set up21. Its authority was limited primarily to State aid issues, and it did not possess any rights necessary for effective market regulation. In fact, the new legislation was merely nominal, not even defining its basic terms such as: relevant market, dominant position, significant market share etc.22. In 2008, the EU mission evaluated Georgia’s readiness for a free trade agreement. In so doing, the mission highlighted the need to improve Georgia’s competition policy23 and renewed talks about reforming it. As a priority area for the successful completion of Deep and Comprehensive Free Trade Agreement (DCFTA) negotiations, the Georgian government issued created Comprehensive Strategy on Competition in 201024. Ultimately, a new Law on Free Trade and Competition was adopted in May 2012. Through a Presidential decree, a new enforcement authority was created for this purpose – the Competition and State Procurement Agency25, however this body never actually started functioning. After subsequent parliamentary elections, a new coalition government came into power in October 2012 with a national competition policy reform among its pre-election promises26. Works on amending the newly adopted Law on Free Trade and Competition commenced, but lasted longer than expected27. Finally, in March 2014, the Georgian Parliament renamed it into the Law on Competition28 (hereafter, Competition Law) subjecting it at the same time
20 Parliament of Georgia, Law of Georgia of 3 May 2005 No. 1550 on Free Trade and Competition. 21 The Minister of Economic Development of Georgia, Order of 9 December 2005, No 1-1-/1992 on Amending the Charter of the Agency of Free Trade and Competition, adopted by the Order of the Minister of Economic Development No. 1-1/948 of 23 August 2005. 22 Transparency International Georgia, Competition Policy in Georgia, Tbilisi 2012, p. 11. 23 Center for Social and Economic Research, Economic Feasibility, General Economic Impact and Implications of a Free Trade Agreement between the European Union and Georgia, 2008, p. 83–84. 24 Government of Georgia, Decree of 3 December 2010, No. 1551 on the Approval of the Comprehensive Strategy in Competition Policy. 25 The president of Georgia, Edict of 19 December 2011, No. 829, on the Creation of LEPL – Competition and State Procurement Agency. 26 Transparency International Georgia, Competition Policy and Competition regulatory Authority in Georgia, Tbilisi 2013, p. 5. 27 Ibidem. 28 Parliament of Georgia, Law of Georgia of 8 May 2012, No. 6148-Iს on Competition.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEED FOR COMPETITION LAW – DISCUSSING THE CASE OF GEORGIA 19 to fundamental amendments. Through the ordinance of the Government of Georgia29, a new Competition Agency was formed. In June 2014, local media published an interview with the chairman of the new Competition Agency – Giorgi Baramidze. He stated that before the Agency would start functioning, it was necessary to adopt certain normative acts on its procedural rules. A group of experts was already working on these acts and their adoption was expected by October 201430. Mid November 2014, the Agency declared that it had started, on its own initiative, to investigate the national oil products market. Moreover, the Agency area received two external submissions applications: one regarding the flour market, and the other concerning an alleged monopoly over thermal spas in the Tsqaltubo resort31. These are the first three cases under consideration after the re-introduction of competition law in Georgia. Not a single decision has been issued yet.32
III. The reasons and motivation for re-introducing competition law in Georgia
The following section aims to reveal the actual reasons and aims standing behind the decisive points in the history of Georgian competition policy developments. This will help better understand the illogical nature of its evolution, and lead to the roots of societal mistrust and skepticism toward its competition authority, as yet another State regulatory body. Georgia’s decision to introduce antimonopoly law soon after it declared its independence does not raise many questions. After the collapse of the socialist Soviet Union, independent Georgia was trying to transform itself into a market economy – perceiving antimonopoly law as a necessary part of such
29 Government of Georgia, Ordinance of 14 April 2014, No. 288 on Adopting the Charter of LEPL Competition Agency. 30 Interview of Giorgi Baramidze with Commersant.ge, 26 June 2014 (available at: http:// commersant.ge/?lang=1&menuid=11&id=12769). 31 For more information, visit: http://www.bpn.ge/biznesi/7538-konkurenciis-saagentom- navthobproduqtebis-bazris-shestsavla-daitsyo.html?lang=ka-GE. 32 The end of 2014 was marked with massive decrease in oil prices globally; Georgian market legged behind the tendency. In the middle of December 2014, the prime minister of Georgia requested new competition agency to analyze oil market and prepare a report regarding the reasons of non adequate decrease in oil prices in Georgia. The preliminary report has already been presented to the prime minister. As the Agency stated, the signs of anticompetitive agreements and concerted practices has been discovered on the market, however the market study has not been completed and no decision has been made yet. For more information, visit: http://competition.ge/ge/page4.php?b=198.
VOL. 2015, 8(11) 20 ZURAB GVELESIANI transformation was quite logical33. This was so especially when taking into account that there was a boom, at that time, of adopting competition laws in the former socialist States, as well as in other developing countries in Central America, South East Asia, Africa, etc.34 Since becoming an independent State, Georgia’s declared foreign policy was that of integration with the EU and with Euro-Atlantic institutions35. Seeking membership in the North Atlantic Treaty Organization (NATO) was driven mainly by security reasons36. However, joining the European family was an issue also related to the identity of the Georgian nation37, and was seen as part of returning to European roots38. From the first years of its independence, Georgia started establishing close relations with the EU and later, after claiming its European identity, set EU membership as its goal39. Since the 1990s, significant efforts have been taken toward Georgia’s ‘de-sovetization’ and to its Europeanization. According to Bache and Jordan, Europeanization is the process of ‘reorientation or reshaping of politics in
33 S. Fetelava, The Evolution…, p. 15, 16. 34 R. Whish, C. Townley, New Competition Jurisdictions: Shaping Policies and Building Institutions, Edward Elgar Publishing, 2012, p. 261. 35 For more information, visit: http://www.eu-nato.gov.ge/en/eu/cooperation. 36 For more information, visit: http://mfa.gov.ge/index.php?lang_id=ENG&sec_id=453. 37 On 27 April 1999, at the accession ceremony of Georgia to the Council of Europe, the chairman of the parliamentary assembly, Lord Russel-Johnston, addressed the Georgian delegation with the following words: ‘Georgia, welcome back home!’ The Prime minister of Georgia, Zurab Zhvania, delivered his historic speech, stating: ‘I am Georgian and therefore I am European’. For more information, see: N. Mestvirishvili, M. Mestvirishvili ‘I am Georgian and there-fore I am European’ Re-searching the Europeanness of Georgia’ p. 52–53. Address by Minister of Foreign Affairs of Georgia, H.E. Mr. G. Vashadze at the Parliamentary Assembly of the Council of Europe, Strasbourg, 25 January 2012 (available at: http://www.spain. mfa.gov.ge/index.php?lang_id=ENG&sec_id=142&info_id=13766). Also, see: M. Saakashvili, K. Bedukidze, ‘Georgia, the Most Radical Catch-up Reforms’ [in:] A. Aslund, S. Djankov, (eds.) The Great Rebirth: Lessons from the Victory of Capitalism over Communism, Peterson Institute for International Economics, 2014, p. 150. 38 At the campaign concert ‘We Choose Europe’ dedicated to the signing of the AA between Georgia and the EU, Giorgi Margvelashvili, the president of Georgia, stated during his speech: ‘All of us here today are united for a bright goal, which is not just the choice of some political union, neither is this the choice of any politician or a state official; this is not the choice made only by us; this is the choice made by our ancestors, who created this free country – Georgia, who built the freedom, freedom of soul, acceptance of others, tolerance, in the basement of the Georgian culture. That’s why, we are here not only for our choice, but for the choice made by our predecessors’ (available at: https://www.president.gov.ge/en/PressOffice/News/ Releases?8750). 39 N. Mestvirishvili, M. Mestvirishvili, ‘I am Georgian and there-fore I am European’…, p. 53. K. Lapachi, Georgian Competition Way to EU, 2011 (available at http://dfwatch.net/ georgian-competition-way-to-eu-60215).
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEED FOR COMPETITION LAW – DISCUSSING THE CASE OF GEORGIA 21 the domestic arena in ways that reflect policies, practices or preferences advanced through the EU system of governance’40. As Cseres claims, the experiences of EU’s eastern enlargement show that competition law is a key mechanism in this context and the most acute illustration of Europeanization41. Competition law developments in Georgia have always been closely linked and influenced by the EU. In 1996, Georgia signed the Partnership and Cooperation Agreement (hereafter: PCA) with the EU42. Although cooperation with the EU started already in 1991-1992, the PCA was the first milestone on this road launching the continuous process of legal approximation and harmonization. Along with a number of political, economic and social issues43, the PCA indicated also what key topics should be given particular attention. Article 44 of the PCA stated that Georgia should develop its competition law and implement it, for which the EU would provide technical assistance. Responding to these obligations, Georgia adopted its antimonopoly legislation only a few months later and founded its first Antimonopoly Authority44. Despite such prompt reaction by the Georgian government, the enforcement of its antimonopoly rules has never been sufficiently successful in Georgia. The work of the Antimonopoly Authority is praised in the works of the most prominent and widely quoted Georgian competition law authors such as Fetelava and Lapachi. However, these authors, in their capacity as former officials of that body45, act as representatives of that very Authority and thus naturally they remain more focused on its achievements than on its short fallings. According to an evaluation undertaken by Forbes Georgia, competition in Georgia was limited in a number of national markets, informally privileged undertakings existed, and cartels and various corruption schemes were in operation even before the abolishment of its Antimonopoly Law46. However, the malfunctioning of the Georgian market should be blamed on the general situation in the country, rather than on a single State institution. As Lapachi herself assessed the work of the Authority, she indicated key
40 I. Bache, A. Jordan, ‘Europeanization and Domestic Change’, [in:] I. Bache, A. Jordan (eds.), The Europeanization of British Politics, Basingstoke 2006, p. 30. 41 K. Cseres, ‘Accession to the EU’s Competition Law Regime: A Law and Governance Approach’ (2014) 7(9) YARS 35. 42 Georgia & EU, Partnership and Cooperation Agreement, 1996. 43 For more information, visit: http://eu-nato.gov.ge/en/eu/agreement; http://mfa.gov.ge/ index.php?lang_id=ENG&sec_id=462. 44 S. Fetelava, The Evolution…, p. 17. 45 S. Fertlava was a deputy head and later acting head of the Antimonopoly Authority of Georgia; K. Lapachi is also a former deputy head of the Authority. 46 I. Lekvianidze, ‘What an effective competition policy should be like?’ Forbes Georgia, 13 February 2014.
VOL. 2015, 8(11) 22 ZURAB GVELESIANI problems which had hindered affective law enforcement in Georgia47. She listed: legislative gaps and deficiency of secondary legislation; lack of data accessibility; inconsistency of State policy and non-comprehensive nature of economic reforms; weak institutional position of the Authority (status, funding, lack of qualified personnel); political situation which had often failed to support it; absence of political will. Among the abovementioned problems, the principal one has always been the lack of political will towards market regulation48. Even in 2014, before launching the new Competition Agency, a survey conducted by Forbes Georgia demonstrated that 56% of the questioned business leaders said that the Agency is necessary. However, 53% believed that its effectiveness is fully depended on the political will of the government49. The significance of the government’s actual willingness to bust market competition is vital in developing and transitional countries like Georgia, which lacks the tradition and culture of independent and powerful state institutions, and where political leaders possess vast formal and informal authority. While in certain parts of the world, such as the EU or the USA, the question of the desirability of competition law is beyond doubt, the same conviction is not necessarily shared all around the world. In countries with strong ties between the government and business, the idea of the State taking steps to develop competition means to take away the power and influence exercised so far by a small elite, which controls specific sectors of the local economy. Competition can thus be a highly undesirable and disliked idea by an government50. An almost nominal operation of state institutions, while the government never truly allows them to reach their declared goals, gives birth to public skepticism and distrust toward state bodies. For years, Georgia was sunk deeply into corruption. In fact, it was considered as one of the most corrupt countries in the world51; in 2003, the Transparency International’s Corruption Perception Index placed Georgia in the 124th place among the 133 listed states52. Rampant corruption, pushing Georgia to the stage of a ‘failing state’53, could explain the absence of governmental will to
47 K. Lapachi, Competition Policy in Georgian 1992–2012, presentation for the Georgian Development Research Institute. 2012, section 27. 48 Interview of Prof. Solomon Pavliashvili with GHN.ge, 10 October 2014. 49 I. Lekvianidze, What an effective competition…, op. cit. 50 M. Dabbah, International and Comparative Competition Law, Cambridge University Press, 2010, p. 8. 51 G. Nodia, Á. Scholtbach, The Political Landscape of Georgia: Political Parties: Achievements, Challenges and Prospects, Eburon Uitgeverij B.V., 2006, p. 16. 52 For more information, visit: http://www.transparency.org/research/cpi/cpi_2003. 53 G. Nodia, Á. Scholtbach, The Political Landscape of Georgia: Political Parties: Achievements, Challenges and Prospects Eburon Uitgeverij B.V., 2006, p. 16; T. Bočorišvili, W. Sweet, D. Ahern Politics, Ethics and Challenges to Democracy in ‘new Independent States’ CRVP, 2005, p. 110.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEED FOR COMPETITION LAW – DISCUSSING THE CASE OF GEORGIA 23 effectively enforce its own Antimonopoly Law. A good demonstration of this problem is the fact that despite its struggle, the Antimonopoly Authority could never manage to establish itself as a separate and independent body. Not only did it remain a structural unit within the Ministry of Economy, but with its authority shrinking as well54. Looking at the development and enforcement practice of Georgian Antimonopoly Law until its abolition in 2005, a question arises; was adopting this law, and establishing its enforcement authority, in fact a conscious decision taken by the Georgian government meant to enhance the competitiveness of the national market? Or was it maybe an idea “planted” from the outside, and seen by the government as a necessary tribute for a better state image, without the government having any actual will to enforce the law? The same question may apply to the decision to abolish the law in 2005 and then re-introduce it in 2012. The abolition of competition law in Georgia was preceded by dramatic political changes. Extreme forms of corruption and failing state institutions lead Georgia into a peaceful revolution in November 200355, the old government was overthrown and a team of young reformers was brought into the new cabinet56. From 2003 onwards, Georgia witnessed the largest scale reformation wave since its independence57. Its economic reforms are related to the name of Kakha Bendukidze, who held the posts of the Minister of Economy and then Minister for Reform Coordination between 2004 and 2008. Bendukidze, widely seen as the “godfather”58 and “architect” of Georgia’s market liberalization reforms59,
54 K. Lapachi Competition Policy in Georgian 1992–2012, Presentation for the Georgian Development Research Institute 2012, section 20. 55 For more information, visit: http://news.bbc.co.uk/2/hi/4532539.stm; http://www.usip.org/ sites/default/files/sr167.pdf. 56 L. Mitchell, Uncertain Democracy: U.S. Foreign Policy and Georgia’s Rose Revolution, University of Pennsylvania Press, 2011, p. 115; C. Sudetic, The Philanthropy of George Soros: Building Open Societies, Public Affairs, 2011, p. 33–35; W. Shoemaker, Russia and The Commonwealth of Independent States, Rowman & Littlefield, 2014, p. 238, 239; E. Svante, S. Cornell, F. Starr, The Guns of August 2008, M.E. Sharpe, Jun 8, 2009, p. 85–104. 57 M. Saakashvili, K. Bedukidze, ‘Georgia, the Most Radical Catch-up Reforms’ [in:] A. Aslund, S. Djankov, (eds.) The Great Rebirth: Lessons from the Victory of Capitalism over Communism, Peterson Institute for International Economics, 2014, p. 150. 58 Associated Press, 14 Nov. 2014 (available at: http://bigstory.ap.org/article/52e3e1784d7b 444d91b21ce0dc2a51c3/godfather-georgias-reforms-dies-58). 59 N. Emerick, G. Jandieri Rose Revolution Shows the Results of Freeing Markets, 13 Nov. 2013 (available at: http://www.bdlive.co.za/opinion/2013/11/13/rose-revolution-shows-the-results- of-freeing-markets); Associated Press, 14 Nov. 2014 (available at: http://bigstory.ap.org/articl e/52e3e1784d7b444d91b21ce0dc2a51c3/godfather-georgias-reforms-dies-58); H. Bedwell for Bloomberg, 14 Nov. 2014 (available at: http://www.bloomberg.com/news/2014-11-14/georgia- reformer-businessman-bendukidze-dies-in-london-at-58.html); The Economist, ‘A Different Sort of Oligarch’, 29 Jul. 2014 (available at: http://www.economist.com/node/2963216).
VOL. 2015, 8(11) 24 ZURAB GVELESIANI had extreme views regarding market de-regulation60. He saw competition law as a burden for business and an undesired barrier for attracting foreign direct investments. Ignoring the question of how reasonable and desirable it was to abolish Antimonopoly Law in Georgia, it was at least made genuinely by the government itself, rather than being recommended or suggested by foreign partners or institutions. Therefore, in order to convince the society of the rightfulness of the reform, market regulating bodies were labeled as an unnecessary barrier. As Bendukidze stated in an interview in 2009, the operation of regulatory bodies meant they have to ‘regulate something, to correct something, to interfere with people’s lives’61. The de-regulation reform of 2005 was rejected by 2010 and works begun on re-introducing competition law in Georgia, despite the fact that the same political team was still in power62. However, in the context of the negotiations taking place between Georgia and the EU on the DCFTE and the AA, the idea that competition law is necessary came to Georgia, once again, from the outside63 rather than as a result of analyzing internal mistakes of previous years. It is obvious that the legal changes and the actual political will of the government might, in such case, contradict each other. This might lead to making the business and the society skeptical as to the promised changes. A survey conducted among business leaders by Forbes Georgia in February 2014 demonstrated that market players remain widely suspicious of the reform and keep their expectations low before the launch of the new Competition Agency. • 67% of the survey participants agreed that there is a competition problem on the Georgian market, while: • 44% did not see the need for a competition authority; • 53% thought that the effectiveness of the competition authority is depended on the political will of the government; • 35% considered that the competition authority will become another regulatory barrier for business; • Only 11% expected that launching the authority will have an actual positive impact on the market and the level of competition will increase.
60 The famous quote of Kakha Benukidze was: ‘Georgia should sell everything that can be sold, but its conscience’. For more Information, see: The Economist, ‘A Different Sort of Oligarch’, 29 Jul. 2014 (available at: http://www.economist.com/node/2963216). 61 Interview to K. Bendukidze, ‘There Is Only One Way – Building a Free Economy’ by Natalia Morari, Ekho Kavkaza, 7 December 2009, p. 1 (available at: http://www.esiweb.org/pdf/ georgia%20-%20Ekho%20Kavkaza%20Interview%202009.pdf). 62 Government of Georgia, Decree of 3 December 2010, No. 1551 on the approval of the comprehensive strategy in competition policy. 63 For more information, visit: http://mfa.gov.ge/index.php?lang_id=ENG&sec_id=462.
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The attitude to favor the currently known bad situation, due to fear of an unknown, potentially worse future, will not bring any positive changes to the country’s economy. The following section will discuss whether the current status-quo of an un-regulated Georgian market needs to be changed, and the impact of this situation regarding market competitiveness.
IV. The impact of the abolition of Georgia’s Antimonopoly Law in 2005
Georgia has taken important steps in the last few years in order to develop effective market regulation system. Since the idea of the reform originated from EU recommendations, the reform has a certain political context, although this does not negate its timeliness. The following section will demonstrate the outcome of Georgia’s “market liberalization” of 2005 in order to answer the question whether the decision to repeal its Antimonopoly Law was correct and whether this path should have been continued. Considered will also be the question whether, alternatively, the Georgian market at all needs state intervention to regulate competition. Between 2004-2012, post-revolutionary Georgia went through a massive reformation process and attained a number of impressive achievements. Its placements on international rankings were continuously improving including: the World Bank’s Doing Business Index, the Heritage Foundation and the Wall Street Journal Index of Economic Freedom, the Transparency International Corruption Perception Index, and the Fraser Institute Economic Freedom of the World Index64. Georgia’s average yearly economic growth equaled 6.1% between 2004 and 2012. Due to the level reached and the speed of its developments, this process has been termed the ‘Georgian Economic miracle’65. Unfortunately, the same success did not apply to the competitiveness of the Georgian market. Its position on the Global Competitiveness Index was not as impressive – the country was placed between positions 85 and 93 during 2005–201266. Although the situation was not ideal even with competition rules in place, it started to worsen after the Antimonopoly Law was repealed.
64 M. Saakashvili, K. Bedukidze, ‘Georgia, the Most Radical Catch-up…’ [in:] A. Aslund, S. Djankov, (eds.) The Great Rebirth…, p. 162–163. 65 Interview to K. Bendukidze ‘There Is Only One Way – Building a Free Economy’ by Natalia Morari, Ekho Kavkaza, 7 December 2009, p. 1 (available at: http://www.esiweb.org/pdf/ georgia%20-%20Ekho%20Kavkaza%20Interview%202009.pdf). 66 The reports can be found on the following address: http://www.weforum.org/issues/global- competitiveness.
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Georgia moved towards a national economy dominated by monopolies67 and oligopolies, which started to form on markets for the most common goods and services. Comparing to the year 2000, the share of small and medium sized enterprises (SMEs) in the Georgian market’s total turnover decreased by more than 50%68 and currently equals 15.6%69. This is a very unhealthy situation since SMEs are seen as the backbone and engine of economic growth, primarily responsible for innovation and R&D70. The shrinking share of the turnover of SMEs indicates that fewer companies remain on the market. When few large companies capture the market, the risk of anticompetitive agreements or abuse of dominance is more than high in the absence of competition rules. The Georgian fuel market is a good example here which used to encompass dozens of undertakings. However, after the reformation of 2005, medium firms started to leave the market and the retail level was ultimately divided among five big companies71. Eventually, an oligopoly formed in this very important segment of the national economy72 which was reflected in its price structure. In 2006, fuel prices started to increase dramatically in Georgia73. Companies remaining on the market shared an analogous price dynamics. Another anomaly developed since then: price increases taking place in the international market affect prices on the national market, but an international price cut much less effect in Georgia74. The fuel market remains widely disputed until now. It was specifically in response of the public interest that
67 L. Papava, ‘Georgia’s Socio-Economic Development: Prospects over the Medium Term’, 16 December 2012 (available at: http://www.international-alert.org/blog/socio-economic- development-english#sthash.HybS6xPh.pdf). 68 Interview of Prof. Solomon Pavliashvili with GHN.ge, 10 October 2014 (available at: http://ghn.ge/news-116316.html). 69 National Statistics Office of Georgia, Statistics on the Operation of Undertakings, 3 September 2014 (available at: http://www.geostat.ge/cms/site_images/_files/georgian/business/ Press%20Release%202014_II.pdf). 70 For more information, visit: http://ec.europa.eu/enterprise/policies/sme/facts-figures- analysis/index_en.htm Also see: P. Këllezi, Antitrust for Small and Middle Size Undertakings and Image Protection from Non-Competitors, Springer, 2014, p. 5. 71 ‘Before the Rose Revolution, dozens of companies operated in the retail fuel market. We could buy decent gas, bad gas and black market gas. After the Rose Revolution, the government effectively eliminated the black market retailers as new companies emerged and began to consolidate their presence. One by one, independent gas stations were swallowed up by bigger fish. Now, only 5 suppliers operate on the Georgian market’ – P. Rimple, Who Owned Georgia, Transparency International Georgia, 2012, p. 65. See also: Transparency International Georgia, Competition Policy in Georgia, Tbilisi, 2012, p. 20. 72 Ibidem, p. 17. 73 Ibidem, p. 6, 8. 74 Ibidem, p. 17.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEED FOR COMPETITION LAW – DISCUSSING THE CASE OF GEORGIA 27 the new Competition Agency has chosen this very market as the first subject of its investigation75. Oligopolies developed in other consumer vulnerable markets, such as the pharmaceutical and food sector. The food market is especially important since it covers the most widely consumed goods. Since 2005, food prices started to grow in Georgia with particularly sharp increases taking place after 200976. The pharmaceutical sector is another sensitive field which has been described by the Transparency International in Georgia as “an oligopoly and vertical monopoly of two companies that use their strong concentration of market power in the import/distribution, the retail and the manufacturing sectors to dominate the market”77. The report, published in 2012, indicated the following problems: • Out of 70 undertakings active on the production market, two controlled 90% of the market; • Those two companies, along with three others, formed an oligopoly on the retail level; • Companies employed various exploitative and exclusionary practices including: high prices that continuously increased, much higher than other general goods and services; the mark-up for medicines was very high, far above the average mark-up in European States; pharmaceutical companies offered financial or other incentives to doctors for prescribing their medicines; largest pharmaceutical chains aggressively promoted their own medicines. Even when patients presented prescriptions from doctors for specific medicines, without any request they were offered alternative solutions, produced by the pharmacy owning company. • Large scale pharmaceutical companies were supposed to have close ties with the government. Market monopolization, or their division among a few companies, has often taken place with the help of the state itself. The Georgian hospital sector is a good example here. The state imposed an obligation on insurance companies to construct and operate hospitals – in order to allow them to cover their losses, they were awarded legal monopolies in specific regions78. Eventually, almost the entire country was divided among a few insurance
75 BNP.ge 14 Nov. 2014 (available at: http://www.bpn.ge/biznesi/7538-konkurenciis- saagentom-navthobproduqtebis-bazris-shestsavla-daitsyo.html?lang=ka-GE). 76 Transparency International Georgia, Competition Policy in Georgia, Tbilisi 2012, p. 33, 39. 77 Transparency International Georgia, The Georgian Pharmaceutical Market, Tbilisi 2012, p. 1; P. Rimple, Who Owned Georgia. A Pharmaceutical Oligopoly, p. 73-92. 78 Transparency International Georgia, The Georgian Pharmaceutical Market, Tbilisi 2012, p. 4.
VOL. 2015, 8(11) 28 ZURAB GVELESIANI companies79. Hence, vertical integration allowed ownership of hospitals by insurance companies, despite the risk of a serious conflict of interests80. At the same time, dominants of the pharmaceutical sector managed to successfully integrate vertically also and entered the insurance and hospital sectors as well81. To complete the picture, controversial acquisitions took place in 2010 on the insurance market itself whereby a single undertaking gained control of more than 1/3 of the market82. The hospital sector is not the only example of the abovementioned trend. Other examples of monopolization or oligopolization of markets with the help of the state include: lottery83, cargo services84, postal services85, slaughterhouses86, minibuses87 and other sectors. The above list is not exhaustive but illustrates well the tendencies taking place in Georgia during the absence of market regulation. Existence of elite corruption and close ties between business sector and the government88 encouraged various forms of anticompetitive actions and abuses. Without an effective, independent body to prevent them, both the Georgian economy and its consumers suffered damages.
79 See the map, developed by Transparency International Georgia, available at http://a.tiles. mapbox.com/v3/tornike.mergedinsurancecompanies/page.html#9/42.4488/44.0607. 80 Transparency International Georgia, The Georgian Pharmaceutical Market, Tbilisi 2012, p. 14, 15. 81 Ibidem, p. 17. 82 Transparency International Georgia, The Georgian Health Insurance Industry, Tbilisi 2012, p. 20. 83 M. Huter, M. Andguladze, ‘Lottery nationalized and put under management of Georgian Post’ Transparency International Georgia Blog, 3. Sept. 2011 (available at: http://transparency. ge/en/blog/lottery-nationalized-and-put-under-management-georgian-post). 84 T. Khaliani Cargo Companies, on the Verve of Extinction, Liberali, 23 May 2013 (available at (Only in Georgian): http://www.liberali.ge/ge/liberali/articles/114945/). 85 Transparency International Georgia New draft law on Postal Service: Establishing the Georgian Post monopoly? 4 March 2014 (available at: http://transparency.ge/en/blog/new-draft- law-postal-service-establishing-georgian-post-monopoly). 86 Transparency International Georgia, Competition Policy in Georgia, Tbilisi 2012, p. 48. Also visit: http://www.messenger.com.ge/issues/2376_june_14_2011/2376_econ_three.html. 87 T. Zhvania, ‘Monopoly Money in Georgia’, 23 September 2011; Humanrights.ge Scheme of Monopolist Winner of Min-Bus Tender, 4 March 2011 (available at: http://www.humanrights. ge/index.php?a=main&pid=13011&lang=eng). Also visit: http://www.sakrebulo.ge/index. php?lang_id=ENG&sec_id=6&info_id=1682. 88 P. Rimple, Who Owned Georgia, Transparency International Georgia, 2012; Transparency International Georgia, Intersection of business and politics: Problem of the ‘revolving door’ in Georgia, 5 February 2013 (available at: http://transparency.ge/en/blog/intersection-business-and- politics-problem-revolving-door-georgia); L. Papava, ‘Georgia’s Socio-Economic Development: Prospects over the Medium Term’ 16 Dec. 2012 (available at: http://www.international-alert. org/blog/socio-economic-development-english#sthash.HybS6xPh.dpuf).
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Georgia became a current example of extreme market liberalization. The architects of the reform claimed that “the market would ultimately dictate”89 and the “invisible hand”90 would regulate it. However, looking back from today’s point of view, it is obvious that repealing Georgia’s Antimonopoly Law and closing its Antimonopoly Authority was not a reasonable decision. Lapachi and Tivishvili called it ‘an absolute disaster’91. Fetelava quotes a number of other prominent Georgian experts and academics, such as: Papava, Leiashvili, Gogiashvili, criticizing the abolishment and listing its negative effects92. In this context, re-introducing competition law in Georgia was a move in the right direction, although the situation has not yet improved much. New competition legislation has been adopted, but the recently created authority is only starting to take its first enforcement steps. The effectiveness and actual independence of that body, and the question whether breakthrough, genuine changes are actually going to materialize, are still ahead to be tested by time.
V. Competition law – Challenges and Expectations
The precious section described anticompetitive anomalies that had developed on the Georgian market due to the absence of effective market regulation. Now, as the country starts regulating its market again, it is important to have realistic expectations as to the possible outcomes, about what positive changes can, in fact, be achieved, and what challenges might be ahead. The rationale of Georgia’s radical and comprehensive reformation wave that started in 2004 was that the state was actually failing, that there was no time for a long-term, painless transformation, and that the country needed immediate, aggressive changes93. Moreover, because of the kleptocratic nature of the state’s activities in earlier years, and the malfunctioning of its institutions, any kind of state control was considered suspicious94. While such belief could have been effective for a limited period of time, it seems to be
89 Transparency International Georgia, Competition in Georgia, 2008, p. 5 (available at: http://transparency.ge/sites/default/files/Competition%20in%20Georgia.pdf). 90 For more information, see: S. Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776 Book IV, Chapter II, p. 456, para. 9. 91 K. Lapachi, M. Tivishvili, ‘Georgia’ [in:] Competition Regimes in the World – A Civil Society Report, 2006, p. 384. 92 S. Fetelava, The Evolution…, p. 22. 93 M. Saakashvili, K. Bedukidze, ‘Georgia, the Most Radical…’ [in:] A. Aslund, S. Djankov (eds.) The Great Rebirth…, p. 149–150. 94 Transparency International Georgia, Competition in Georgia, 2008, p. 5 (available at: http://transparency.ge/sites/default/files/Competition%20in%20Georgia.pdf).
VOL. 2015, 8(11) 30 ZURAB GVELESIANI still widely shared in Georgia even today95. Adopting a new Competition Law was seen as a necessary step for improving the state image and integrating it closer with the EU96. How practically beneficial the new Law can actually be for a developing country like Georgia is a question that is still very much open. The mere adoption of a new Law is certainly not supposed to change anything, and the two years in Georgia have illustrated this realization well. As a Chicago Law School Professor and former US official Kenneth Dam states, ‘law matters…but much else counts as well’97. Good legislation that remains unenforced amounts to gold buried in the ground. Practice shows that enforcement is generally the Achilles Heel of the majority of newly formed competition authorities98. That is why their independence and impartiality is absolutely necessary. Unlike its predecessor, the new Competition Agency is an independent entity99 – the law grants it full freedom and independence in its decisions and actions100. However, the question remains of its impartiality from political influences, and only the Agency’s future actions will tell how effective and independent it can actually be. Moreover, an independent judiciary has a vital role to play for the effective enforcement of competition law. First of all, the Agency’s decisions can be appealed to Georgian courts. Second, even if the Agency fails to stay free of political influence, private enforcement mechanism allows concerned parties to seek legal remedies for competition law infringements directly before the courts. This mechanism has already been used after the adoption of the Law on Free Trade and Competition in 2012, even before the Agency started operating101.
95 See the previous section. 96 See section III above: The reasons and motivation for reintroducing market regulation in Georgia. 97 K. Dam, The Law-Growth Nexus: The Rule of Law And Economic Development, Brookings Institute Press, 2006, p. 221, 230. 98 K. Davidson, Economic Development, Competition and Competition Law, American Antitrust Institute, 2011, p. 3. 99 Parliament of Georgia, Law of Georgia of 8 May 2012, No 6148-Iს on Competition, Art. 4. 100 Ibidem, Art. 16, 17. 101 In May 2013, Tbilisi City Court abolished the Order of the Minister of Finance, granting the State-owned Georgian Post an advantageous position and establishing barriers on the market. (For more information, regarding the disputed order, see: Transparency International Georgia, With the help of the Finance Minister’s order the Georgian Post has assumed an advantageous position on the market, 2013 – available at: http://transparency.ge/en/blog/help- finance-minister-s-order-georgian-post-has-assumed-advantageous-position-market?page=2). Along with several other grounds, the court shared the position of the claimant, blaming the Ministry of Finance for unauthorized state aid (Stargroup llc, Kara llc, v. The Ministry of Finance of Georgia, Georgian revenue service, decision of 27 May, 2013, the City Court of Tbilisi on
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Along with the judiciary, low corruption levels and ‘arm’s length’ relations between the business and the political sphere are vital for effective competition law enforcement. While a number of developing States struggle with these problems, low effectiveness of market regulation should not come as a huge surprise. Therefore, along with opening a competition authority, Georgia will need to invest much energy in making improvements in this context, in order to exercise an actual impact on the market. If it proves possible to successfully resolve the practical problems of effective competition law enforcement, the question will remain as to what actual benefits can the country achieve from it? Having powerful giants that dominate the market may seem a more successful demonstration of a growing economy; however, the key to growth for developing counties is investment in SMEs. As Arancha González, Executive Director of the International Trade Centre states: ‘SMEs are key drivers for economic growth, innovation, employment and social integration…the world’s most concentrated, booming and innovative engine’102. Competition law is a tool that protects SMEs and creates the necessary market environment for little companies to grow and to develop the economy without getting swallowed up by market dominants. The wealthiest corporations dominating current global markets, such as Microsoft, Intel, Google or Facebook, started as small low capital ventures. This does not mean that every SME should expect the same fate, but the whole magic of competition is that it selects the most successful entities and lets them flourish103. As discussed above, SMEs play an increasingly insignificant role in the Georgian economy, a good indicator of an economy’s lack of health and the urgent need for restrained State intervention. Stopping anticompetitive practices and abuses of dominance, competition law assists the market in getting rid of uncompetitive undertakings and paves the way for the most successful ones. It creates a healthier environment for business and a stronger market. Developing States strive to integrate into the world economy and have their global economic role grow. In order to increase their competitiveness on the international level, they should however first turn to the competitiveness of their own economy, make it full of strong, but not the Case N 3/362-13, Para. 6.5). The same position has been shared by the Appellate Court of Tbilisi. The Supreme Court of Georgia has recognized the case as inadmissible, thus letting the Appellate Court decision come into force. For more information, see: http://news.ge/ge/news/ story/122661-gadamzidma-kompaniebma-khadurs-sami-instantsia-mouges-da-akhla-zaralis- anazghaurebas-itkhoven. 102 Speech before the European Parliament’s Committee on International Trade in Brussels, Belgium. Delivered on 19 March 2014 (available at: http://www.intracen.org/news/Statement- at-the-European-Parliament-Committee-on-International-Trade/). 103 K. Davidson, Economic Development…, p. 10, 11.
VOL. 2015, 8(11) 32 ZURAB GVELESIANI necessarily giant enterprises, which are capable of effectively competing on the international level. Effective market regulation makes the economy competitive – competition enhances production, innovation, reduced poverty, creates wealth and lets consumers get a fair share out of the resulting gains. Competition law has more than symbolic role to play here, however its mere adoption, without effective enforcement, does grant club membership to the developed world. Market regulation is a process of effective law enforcement, state intervention into the market in order to correct its irregularities and enhance efficiency. Market regulation has the potential to make the economy stronger and healthier, develop the market, give space to SMEs and benefit consumers. Due to that, it is as desirable for developing countries as for the developed ones. The issue facing Georgia now is thus not to worry about adopting a new Law, or launching a competition authority, but to think about how to ensure its effectiveness and avoid repeating the mistakes of the past.
VII. Conclusion
Since earning its independence in 1991, Georgia has gone through almost two and a half decades of transformation. While the country has never rejected the chosen path of democratization, Europeanization and developing a market economy, its strategy on certain issues has been changing over time. Competition policy developments have not been steady or logical in the last decade. The question whether Georgia needs competition law has already been subject to much debate in the last ten years; it seems that even now there still is no general consensus on this issue. Is market regulation based on competition law as necessary in small economies, such as Georgia, as in wealthy nations? Absolutely yes! As Lewis answers “the really big distortions to competition happen in poor countries”104. Market regulation is the right choice for every market economy as it has the potential of enhancing market performance, turning it into a strong and competitive one, and bringing benefits to consumers105. Georgian experiences demonstrate well that a non-regulated
104 W. Lewis, The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability, University of Chicago Press, 2005, p. 15. 105 Direct consumer benefits have been well demonstrated by the Competition authority (GVH) in Hungary, another former socialist state, which passed a somehow similar path of transformation as Georgia. As GVH claimed in 2014, only in the period between 2008 and 2012, Hungarian consumers (a population of roughly 10 million) saved at least 58 billion HUF (in 2013 value, approx. 200 million EUR according to the 2013 exchange rate). Benefits are
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEED FOR COMPETITION LAW – DISCUSSING THE CASE OF GEORGIA 33 market becomes a playground for destructive anomalies. Well-chosen and restrained state intervention is the only known answer to the question how to avoid past mistakes and make the Georgian market healthier. This refers not only to the formal adoption of a new Law, and the formation of a new authority, but the overall process of law enforcement and the actual work conducted by the Competition Agency from now on. Georgia seems to be at a good starting point for effective market regulation. It has a European-type competition law, an already formed enforcement authority, previous good and bad experiences in this field, and a problematic market which needs active adjustments. If all these are wisely used, with the support of the political will of the government (that is, granting independence and freedom of actions to the Agency and not interfering with the market without absolute necessity), then Georgia has the potential to demonstrate that competition law is more than a symbolic attribute, and that it can bring actual benefits to the national economy and society.
Literature
Bache I., Jordan A., ‘Europeanization and Domestic Change’ [in:] Bache I., Jordan A. (eds.), The Europeanization of British Politics, Basingstoke 2006. Bočorišvili T., Sweet W., Ahern D., Politics, Ethics and Challenges to Democracy in ‘new Independent States’ CRVP, 2005. Cseres K., ‘Accession to the EU’s Competition Law Regime: A Law and Governance Approach’ (2014) vol. 7(9) YARS. Dabbah M., International and Comparative Competition Law, Cambridge University Press, 2010. Dam K., The Law-Growth Nexus: The Rule of Law And Economic Development, Brookings Institute Press, 2006. Davidson K., Economic Development, Competition and Competition Law, American Antitrust Institute, 2011. Drexl J., Competition Policy and Regional Integration in Developing Countries, Edward Elgar Publishing, 2012. El-Agraa A., The European Union: Economics and Policies Cambridge University Press, 2011. European Bank for Reconstruction and Development, Transition Report, 1999 (available from: http://www.ebrd.com/downloads/research/transition/TR99.pdf).
calculated from the prevented harmful effects, which were supposed to occur without the GVH involvement. For more information see: http://www.gvh.hu/en/press_room/press_releases/press_ releases_2014/direct_consumer_gains_from_gvh_s_activities_a_luc.html.
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Fetelava S., The Evolution of the Competition Theory and Antimonopoly regulation in Georgia, Grigol Bakradze State University, 2008 (available from: http://www.nplg.gov. ge/dlibrary/collect/0002/000330/avtoref-inglish.pdf). Fox E., Trebilcock M., The Design of Competition Law Institutions: Global Norms, Local Choices (Law and Global Governance), Oxford University Press, 2013. Free R., 21st Century Economics: A Reference Handbook, SAGE Publications, Inc, 2010. Këllezi P., Antitrust for Small and Middle Size Undertakings and Image Protection from Non-Competitors, Springer, 2014. Lewis W., The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability, University of Chicago Press, 2005. Mas-Collel A, ‘The Theory of Perfect Competition’ [in:] Donald J., Ehud K., Morton K., Nancy S., Frontiers of Research in Economic Theory: The Nancy L. Schwartz Memorial Lectures 1983–1997 (Econometric Society Monographs), Cambridge University Press, 1998. Mestvirishvili N., Mestvirishvili M., ‘I am Georgian and there-fore I am European” Re-searching the Europeanness of Georgia’ (available from: http://static.cejiss.org/data/ uploaded/1397214644292492/Article%2003.pdf). Mitchell L., Uncertain Democracy: U.S. Foreign Policy and Georgia’s Rose Revolution, University of Pennsylvania Press, 2011. Nodia G., Scholtbach A., The Political Landscape of Georgia: Political Parties: Achievements, Challenges and Prospects, Eburon Uitgeverij B.V., 2006. Nove A., An Economic History of the U.S.S.R., IICA, 1969. Prychitko D, Marxism [in:] Concise Encyclopedia of Economics (available at: http://www. econlib.org/library/Enc/Marxism.html). Saakashvili M., Bedukidze K., ‘Georgia, the Most Radical Catch-up Reforms’ [in:] Aslund A., Djankov S. (eds.), The Great Rebirth: Lessons from the Victory of Capitalism over Communism, Peterson Institute for International Economics, 2014. Shoemaker W., Russia and The Commonwealth of Independent States, Rowman & Littlefield, 2014. Smith A., An Inquiry into the Nature and Causes of the Wealth of Nations, 1776. Sokol D., Lianos I., The Global Limits of Competition Law, Stanford University Press, 2012. Sudetic C., The Philanthropy of George Soros: Building Open Societies, Public Affairs, 2011. Svante E., Cornell S., Starr F., The Guns of August 2008, M.E. Sharpe, Jun 8, 2009. Whish R., Bailey D., Competition Law, Oxford University Press, 2012.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Development of Private Enforcement of Competition Law in Lithuania
by
Raimundas Moisejevas*
CONTENTS
I. Introduction II. Legal rules on private enforcement of competition law in Lithuania 1. Legal background 2. Conditions of civil liability 3. Evaluation of evidence 4. Limitation periods and the duration of proceedings III. Lithuanian jurisprudence on private enforcement of competition law 1. UAB Šiaulių Tara v. AB Stumbras (2006) 2. LUAB Klevo lapas v. AB Orlen Lietuva (2010) 3. AB flyLAL-Lithuanian Airlines v. Air Baltic Corporation A/S and Airport Riga (2008) 4. AB Orlen Lietuva v. the Competition Council of the Republic of Lithuania (2011) 5. UAB Naftos grupė v. AB Klaipėdos nafta (2014) 6. Main qualifying features of Lithuanian private enforcement practice IV. Obstacles for the development of the private enforcement practice in Lithuania V. Conclusions
Abstract
The article reviews the jurisprudence of Lithuanian courts on private enforcement of competition law and identifies the main obstacles for the development of this practice. The analysis of the jurisprudence makes it possible to summarise that: most rulings of the Lithuanian courts relate to cases on the abuse of dominance; usually,
* Dr. Raimundas Moisejevas, Advocate and Associated Professor in Business Law Department, Faculty of Law, Mykolas Romeris University, Lithuania; [email protected].
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dominant undertakings were allegedly applying discriminatory conditions towards the injured party and; most of the claims were presented as follow-on actions after a decision of the Competition Council. The courts held that damages caused by a breach of competition law have to be recovered in accordance with Lithuania’s main principles of civil responsibility. At the same time, the courts made it clear that their jurisprudence is based on the rulings of European Courts and the main principles of EU competition law. The main obstacles for the successful development of antitrust damages claims in Lithuania are, inter alia: complexity of competition cases; difficulty in obtaining substantive evidence; proving a consequential relationship and; high legal costs. The article also analyses substantial and procedural provisions of Lithuanian legislation that regulate the submission of antitrust damage claims.
Résumé L’article examine la jurisprudence des cours lituaniens sur l’application privée du droit de la concurrence et identifie les principaux obstacles pour le développement de cette pratique. L’analyse de la jurisprudence permet de constater que la plupart des décisions des cours lituaniens concerne le cas de l’abus de position dominante; généralement les entreprises dominantes prétendument appliquaient des conditions discriminatoires à l’égard des victimes et la plupart des requêtes ont été présentées suite à la décision du Conseil de la concurrence («follow-on actions»). Les cours ont conclu que les dommages subis à cause de violation du droit de la concurrence doivent être récupérés conformément aux principes de la responsabilité civile prévus en droit lituanien. En même temps, les cours ont clairement indiqué que leur jurisprudence est fondée sur les décisions des cours européens et sur les grands principes du droit européen de la concurrence. Parmi les principaux obstacles au développement de l’application privée du droit de la concurrence en Lituanie nous pouvons indiquer: la complexité des affaires portant sur la violation du droit de la concurrence; la difficulté pour obtenir des preuves de violation; la difficulté de prouver un lien de causalité; les frais juridiques élevés. L’article analyse également des dispositions substantielles et procédurales de la législation lituanienne régissant les actions en dommages-intérêts en droit de la concurrence.
Classifications and keywords: antitrust damage; antitrust damage claims; Directive on antitrust damages actions; evidence; follow-on action; Lithuania; nullity; private enforcement of competition law; public enforcement of competition law.
I. Introduction
Lithuania’s first Law on Competition was adopted in 19921. The Law was significantly amended in 2004 as it was necessary to harmonize the Lithuanian
1 Lietuvos Respublikos konkurencijos įstatymas (1992 m. rugsėjo 15 d. įstatymo redakcija Nr. I-2878) // Valstybės žinios. 1992. No. 29-841.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES DEVELOPMENT OF PRIVATE ENFORCEMENT OF COMPETITION LAW… 37 legal system with acquis communautaire.2 The Competition Council of Lithuania and Lithuanian courts had been referring to the practice of the European Court of Justice (hereafter: ECJ) and the European Commission (hereafter: EC) many years before Lithuania entered the European Union (hereafter: EU). However, to the best of our knowledge, antitrust damages claims have not been in existence in Lithuania until 2003 when the first claim for antitrust damages was actually presented. Private enforcement of competition law is still quite an undeveloped legal area in Lithuania in comparison to its public enforcement. Undertakings lack clear information concerning the possibility to submit private enforcement claims and have a lot of worries related to proceedings in competition cases. The complexity of competition law cases and the lack of clear-cut jurisprudence mean that undertakings usually abstain from the submission of antitrust damages claims. This article covers the main judgments of Lithuanian courts that relate to private enforcement of competition law. Unfortunately, not all rulings of the courts and arbitral tribunals are available to public and legal review since parts of the claims were dealt with in arbitral tribunals on a confidential basis. Directive 2014/104/EU on antitrust damages actions (hereafter, Damages Directive) was signed into law on 26 November 2014 and published in the Official Journal of the European Union on 5 December 20143. This Directive has introduced a number of measures intended to facilitate private enforcement claims in EU Member States. After the Directive enters into force, all Member States will be obliged to modify their national legal systems4. Although antitrust damages claims are currently subject to the same legal rules as usual claims for damages, the situation will change. In a couple of years, the conditions for antitrust damages claims established in the national legal system of Lithuania, as well as of other EU Member States, will have to be significantly amended. The intended changes should increase the number of private enforcement of competition law cases in Lithuania.
2 Lietuvos Respublikos konkurencijos įstatymo pakeitimo ir papildymo, valstybės pagalbos ūkio subje ktams kontrolės įstatymo pripažinimo netekusiu galios ir civilinio proceso kodekso 1 straipsnio pakeitimo įstatymas (2004 m . balandžio 15 d. į stat ymo redakcija Nr. IX-2126) // Valstybės žinios. 2004. Nr. 63-2244. [The Law concerning amendment of the Law on Competition, repeal of the Law on state aid to the undertakings and amendment of the Article 1 of the Civil Procedure Code]. 3 http://ec.europa.eu/competition/antitrust/actionsdamages/directive_en.html 4 C.F. Weidt, ‘The Directive on Actions for Antitrust Damages After Passing the European Parliament’ ECLR 2014, 35(9); G. Downie, M. Charrier, ‘UK and EU Developments in Collective Action Regimes for Competition Law Breaches’ (2014) E.C.L.R, issue 8; E. Hjelmeng, ‘Competition Law Remedies: Striving for Coherence or Finding New Ways?’ (2013) 50 CMLR 1007.
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II. Legal rules on private enforcement of competition law in Lithuania
1. Legal background
Private enforcement of competition law in Lithuania is regulated by the Law on Competition, the Civil Code (hereafter, CC) and the Code of Civil Procedure (hereafter, CCP). Article 47 (1) of the Law on Competition provides that a person whose legitimate interests have been violated by actions performed in contravention of Articles 101 or 102 TFEU, or by any other anti-competitive actions that are prohibited by the Law on Competition, shall be entitled to bring an action for damages before the Vilnius Regional Court. The Vilnius Regional Court has thus exclusive jurisdiction as the 1st instance court to hear civil disputes concerning breaches of 101 or 102 TFEU and the provisions of the Lithuanian Law on Competition. It should be noted that disputes related to the challenge of decisions issued by the Competition Council (administrative acts) are heard by the Vilnius Regional Administrative Court and, subsequently, by the Supreme Administrative Court. Administrative courts are currently dealing with more competition law cases than civil courts because private undertakings tend to have legal disputes concerning breaches of competition law with the Competition Council rather than with each other. On the other hand, there are quite a few civil disputes between private undertakings that relate to unfair competition issues but these disputes are not related to anti-competitive agreements or the abuse of a dominant position. The ban on actions of unfair competition prohibits the performance of any actions contrary to fair business practices and good usages, provided such actions may be detrimental to the competitive potential of another economic entity. They include: usage, transfer, disclosure of information representing a commercial secret of another economic entity; imitating of the product or product packaging of another economic entity; proposal to the employees of a competing economic entity to terminate their employment contracts and similar unfair commercial practices. Under Article 47 of the Lithuanian Law on Competition, an injured person is entitled to present two types of claims. An injured person is entitled: 1) to present a claim seeking the termination of the illegal actions and 2) to present a claim seeking compensation for the damages incurred. In Lithuania, undertakings may choose between two different strategies in private enforcement cases. An injured person may present an antitrust damages claim in a follow-on action after the Competition Council adopts a resolution recognizing that an infringement of competition law had taken place. On the other hand, an injured person may present an antitrust damages
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES DEVELOPMENT OF PRIVATE ENFORCEMENT OF COMPETITION LAW… 39 claim without a prior decision of the Competition Council. In Lithuania, private enforcement claims are usually presented as follow-on actions after a decision of the Competition Council has been issued since it is quite difficult for an injured person to independently prove the claimed infringement. It should be noted that after receiving a claim based on an infringement of competition law, Lithuanian courts quite often refer to the Competition Council asking for its opinion concerning the alleged breach. Therefore, even if an injured person applies directly to the court, it is highly possible that the Competition Council will participate in the case in a certain status.
2. Conditions of civil liability
Actions for damages in private enforcement cases are governed by the basic principles on civil liability established in Articles 6.245-6.255 CC. Articles 6.246-6.249 CC specifically provide that in order to establish the civil responsibility of a given person, all four elements of civil responsibility have to be established. These elements are: a) unlawful act (infringement of competition law); b) fault; c) damages; d) causal link between the unlawful act (infringement of the Law on Competition) and damages. The notion of an unlawful act should be understood as an infringement of the provisions of Law on Competition or Articles 101 and 102 TFEU. The Civil Code provides that fault is presumed once the unlawful act is established. Therefore, if the Competition Council or the court recognizes that the accused undertaking has infringed competition law, the fault of such undertaking is presumed. The presumption of fault is rebuttable, however, and the respondent can present respective arguments during the proceedings. The simple fact that an undertaking has committed an infringement of competition law is not sufficient for a successful claim in private enforcement cases. The courts require that the claimant should prove a causal link between the unlawful act and damages. Article 6.247 CC provides that only those damages are going to be compensated which are related to actions giving rise to civil liability of the debtor in such a manner that the damages, taking into account their nature and the nature of the civil liability, can be imputed to the debtor as a result of his actions. In order to establish a causal link, the respondent should have performed his actions prior to the emergence of the damages and the damages should result from the respondents’ behaviour. On the other hand, it is not necessary to prove that the behaviour of the
VOL. 2015, 8(11) 40 RAIMUNDAS MOISEJEVAS respondent is the only cause of the damages – it is sufficient to prove that the actions of the respondent are a sufficient cause for the appearance of the damages, even if they are not the only reason for the damages5.
3. Evaluation of the evidence
Article 176 CPC provides that the goal of civil proceedings is for the court to ascertain that certain circumstances related to the dispute exist, or do not exist. The CPC does not specify ‘how’ confident the court must be (i.e. the degree of the confidence of the court that has to be achieved). The standard of a reasonable person may be viewed as a suitable criterion here and facts are considered to be proven when the court is completely or almost completely persuaded. The Civil Procedure Code establishes a balance of probabilities standard that allows the court to determine freely what evidence is substantial and persuasive6. Any factual data can be used as evidence in a civil case which would help the court conclude that any circumstances relevant for resolving the case exist, or do not exist. The collection of evidence might be very problematic in private enforcement cases since the claimant has limited powers to obtain evidence concerning anti-competitive behaviour, or anti-competitive agreements, of the respondent. Para 1 of Article 199 CPC provides that the party which asks the court to demand written evidence from another party should specify: what written evidence it is asking for; the grounds for believing that a certain party has the requested written evidence and; the circumstances that should be proved by this written evidence. In practice, it might be difficult for the injured party in a competition law dispute to identify what evidence exactly it is asking for and the circumstances that are going to be proved by this evidence. Article 177 CPC provides that expert evidence is acceptable in civil disputes. Actually, courts have asked experts to submit their findings concerning the amount of the damages in most cases on private enforcement in Lithuania. However, undertakings should remember that only the court has the right to appoint experts. Where parties on their own initiative ask experts to provide some given findings, such “expert” opinions would be treated as simple evidence. There was a case in Lithuania where the claimant provided the court, without being prompted to do so, a report on the calculation of damages
5 Lietuvos Respublikos civilinio kodekso komentaras. Šeštoji knyga: Prievolių teisė. T. 1, Justitia, 2003, p. 338. 6 Ž. Terebeiza, Laisvas įrodymų vertinimas civiliniame procese: teoriniai ir praktiniai aspektai (2007) 5(95) Jurisprudencija 79.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES DEVELOPMENT OF PRIVATE ENFORCEMENT OF COMPETITION LAW… 41 prepared by a recognized international audit company. However, the court disregarded such evidence and appointed its own court experts7. The Damages Directive should facilitate access to evidence by the claimant. The present Directive provides that it is appropriate to ensure that claimants are afforded the right to obtain disclosure of evidence relevant to their claim, without it being necessary for them to specify individual items of evidence sought. If the party needs specific pieces or categories of evidence to prove a claim or a defence, it will have the possibility to request that the court orders other parties to disclose the evidence. The Directive also regulates the disclosure of evidence contained in the file of the competition authority. It will be clear in two years how the EU Member States will transpose the particular provisions of the Directive into their national legal systems. It is already clear, however, that rules on the disclosure of evidence will be harmonized in the EU.
4. Limitation periods and the duration of proceedings
According to Article 1.125 CC, the limitation period for bringing an action for damages is three years. The limitation period starts after the claimant finds out, or can reasonably be expected to know, that certain behaviour constituted a breach of competition law and caused him damages. However, current Lithuanian legislation is going to be fundamentally changed since the Damages Directive provides that Member States shall ensure that the limitation period for bringing an action for damages is at least five years. Moreover, the Directive requires Member States to ensure that the limitation period is suspended if a competition authority takes action in order to investigate or process an infringement of competition law. To the best of our knowledge, 1st instance proceedings concerning civil disputes in relation to competition law infringements tend to take over 6 months to be resolved, and quite often exceed a year. Private enforcement cases are more complex than other disputes related to competition law and thus take more time. Proceedings may take much longer still if the judiciary decides to appoint court experts or ask the Competition Council to present an opinion on the alleged infringement. Moreover, claimants usually present their claims for damages in civil courts only after the Competition Councils’ investigation. When the authority starts investigating the actions of a particular undertaking in a complex case, it takes it 18 months on average until it adopts a resolution. Subsequently, parties recognized to be in breach of the Law on
7 Decision of 26 May 2006 of the Court of Appeals of Lithuania, civil case no. 2A-41/2006.
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Competition usually appeal the decision of the Competition Council to the Vilnius Regional Administrative Court. The resulting proceedings may take another 6 months or so. Afterwards, the judgments of the Vilnius Regional Administrative Court are usually appealed to the Supreme Administrative Court. These proceedings may last up to 12 months.
III. Lithuanian jurisprudence on private enforcement of competition law
Although Lithuania’s Law on Competition was adopted more than 20 years ago, there is still very little court practice on private enforcement. The main rulings of the courts that deal with antitrust damages claims are overviewed below.
1. UAB Šiaulių Tara vs. AB Stumbras (2006)
The case UAB Šiaulių Tara vs. AB Stumbras is considered the first Lithuanian case on private enforcement of competition law8. On 30 May 2002, the Competition Council of Lithuania adopted a decision recognizing that AB Stumbras abused its dominant position in the market of strong alcoholic beverages9. AB Stumbras has concluded a number of multilateral agreements concerning the provision of marketing services. The agreements concluded by AB Stumbras established, however, different payment conditions applicable to different contractual partners for the marketing services. The Competition Council concluded also that since some of these undertakings had received from AB Stumbras additional discounts for alcoholic beverages, they were able to sell these beverages cheaper than their competitors. The Competition Council held that AB Stumbras has, by establishing different conditions of compensation for marketing services, created unequal conditions of competition for its different contracting partners (including the claimant, UAB Šiaulių Tara). The Competition Council concluded that the actions of AB Stumbras amounted to an abuse of a dominant position and were contrary to Article 9 of the Law on Competition of Lithuania.
8 Decision of 26 May 2006 of the Court of Appeals of Lithuania, civil case no. 2A-41/2006. 9 Decision of the Competition Council of the Republic of Lithuania of 30 May 2002 No. 6/b on correspondence of the actions of SPAB Stumbras providing discounts and payment for the marketing services (advertising) to the Article 9 of the Competition Law.
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UAB Šiaulių Tara submitted a claim for damages against AB Stumbras on 2 January 2003 – half a year after the adoption of the resolution by the Competition Council. UAB Šiaulių Tara asked the court for an award of 2 864 809 LTL (829 706 EUR) in damages from AB Stumbras. The Kaunas Regional Court that dealt with this case as the 1st instance court satisfied the claim in part. The Kaunas Regional Court recognized that AB Stumbras abused its dominant position and caused damages to the claimant. However, the court decided to award the claimant only 500 000 LTL (144 810 EUR) in damages. UAB Šiaulių tara appealed the ruling of the Kaunas Regional Court since it believed that the amount of damages actually awarded was unreasonably low. The Court of Appeals recognized that AB Stumbras abused its dominant position on the basis of several reasons. First, the Court recognized that decisions of the Competition Council have great probative value. The Court granted substantial value to the decision of the Competition Council that recognized an abuse of a dominant position by AB Stumbras10. Second, the Court of Appeals held that since AB Stumbras has not appealed the decision of the Competition Council, it is possible to conclude that AB Stumbras acknowledged the circumstances established by the Competition Council. Finally, the Court of Appeals concluded that a comprehensive analysis of the facts and documents submitted to the Court make it possible to recognize that AB Stumbras had held and abused a dominant position. The Court of Appeals also recognized the existence of a consequential relationship between the abuse of dominance committed by AB Stumbras and the damages experienced by UAB Šiaulių tara. However, although the Court of Appeal recognized the entitlement to a compensation, the court decided to substantially reduce the amount of the compensation awarded by the 1st instance court setting it at the lower level of 301 633,37 LTL (87 359 EUR). The Court of Appeals was confronted with two different expert opinions concerning the calculation of damages. One opinion was prepared by an international audit company which concluded that claimant had experienced damages in the amount of 2 864 809 LTL (829 706 EUR). The other opinion was presented by an expert from the Forensic Science Centre of Lithuania. The second opinion concluded that UAB Šiaulių tara was entitled to receive only 301 633,37 LTL. The Court decided to accept the expert opinion provided by the Forensic Science Centre. The latter calculated the average payment for marketing services that AB Stumbras had paid to various of the undertakings involved and decided that such average payment should be provided to UAB
10 The Directive on antitrust damages actions established the ability of the claimant to rely on a final decision of a national competition authority.
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Šiaulių tara also. The Court also concluded that the claimant has not proved plausibly that it experienced damages because of lost markets. Two undertakings (UAB Belvedere prekyba and UAB Palink) submitted subsequently their own claims against AB Stumbras asking for the compensation of losses that had allegedly been caused by the abuse of dominance. AB Stumbras reached out of court settlements with these two claimants.
2. LUAB Klevo lapas v. AB Orlen Lietuva (2010)
On 10 July 2000, the Competition Council adopted a decision recognizing that AB Mažeikių nafta abused its dominant position in the Lithuanian national markets of petrol and diesel. The Competition Council found that those undertakings which had import licences, as well as a couple of undertakings without such import licences, had received from AB Mažeikių nafta substantial discounts on petrol and diesel. However, some companies, including the claimant LUAB Klevo lapas, found themselves in quite an unfavourable position. The Competition Council concluded that the agreements for the sale of petrol and diesel concluded by AB Mažeikių nafta implemented discriminatory provisions and were contrary to Article 9 of the Law on Competition that prohibits the abuse of a dominant position. AB Mažeikių nafta was subjected to a 100 000 LTL (28 960 EUR) fine. LUAB Klevo lapas submitted a claim for damages against AB Orlen Lietuva (the successor of AB Mažeikių nafta). LUAB Klevo lapas asked the court for the award of 36 606 156, 42 LTL (10 601 875 EUR) in damages. The claimant alleged that the discriminatory discounts applied by AB Orlen Lietuva had caused substantial damages to LUAB Klevo lapas leading to its subsequent bankruptcy. The claim of LUAB Klevo lapas was rejected by the 1st instance court as well as by the Court of Appeals. Subsequently, LUAB Klevo lapas appealed the case to the Supreme Court11. At present, this is the only private enforcement case which has been scrutinized by the Supreme Court of Lithuania. In its judgment, the Supreme Court relied on the principles of EU competition law established in key rulings of the European Court of Justice such as Courage v. Crehan12, Manfredi13 and City Motors Groep14. The Supreme Court concluded that EU law does not establish, at the moment, unified rules for the compensation of damages suffered in competition cases; the compensation of such damages
11 Decision of 17 May 2010 of the Supreme Court of Lithuania, civil case no. 3K-3-207/2010. 12 Case C-453/99 Courage v. Crehan [2001] ECR I-627. 13 Joined cases C-295/04 to C-298/04 Manfredi v. Assitalia SpA [2006] ECR I-06619. 14 Case C-421/05 City Motors Groep NV v. Citroën Belux NV [2007] ECR I-00653.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES DEVELOPMENT OF PRIVATE ENFORCEMENT OF COMPETITION LAW… 45 must therefore be done on the basis of national provisions. The Supreme Court held that the fact of a competition law breach occurring does not, in itself, make it possible to present a claim for damages – the claimant must prove that all of the above mentioned elements of civil responsibility are present. The Supreme Court focused on causality in order to determine whether the actions of AB Orlen Lietuva have caused the contested damages and the following bankruptcy of LUAB Klevo lapas. After analysing the factual circumstances of the case, the Supreme Court determined that LUAB Klevo lapas lacked financial resources even before AB Orlen Lietuva abused its dominant position by engaging in discriminatory pricing. The Supreme Court concluded also that AB Orlen Lietuva had awarded LUAB Klevo lapas beneficial terms of payment, which gave the claimant an even large economical advantage than the application of the abusive discounts provided to other undertakings. On the basis of the abovementioned arguments, the Supreme Court dismissed the claim of LUAB Klevo lapas.
3. AB flyLAL-Lithuanian Airlines v. Air Baltic Corporation A/S and Airport Riga (2008)
In 2008, AB flyLAL-Lithuanian Airlines submitted a damages claim against Air Baltic Corporation A/S and Airport Riga alleging that the two Latvian companies have breached Articles 101 and 102 TFEU. The claimant stated that Air Baltic Corporation A/S and Airport Riga had concluded an anti- competitive agreement and engaged in abuse. AB flyLAL-Lithuanian Airlines submitted that Air Baltic Corporation A/S is paying substantially lower fees for the services of the Riga Airport than other undertakings. The claim provided that since the Air Baltic Corporation A/S has received financially beneficial conditions from the Riga Airport, it was able to offer much cheaper tickets than AB flyLAL-Lithuanian Airlines. AB flyLAL-Lithuanian Airlines asked the court for the award of 199 830 000 LTL (57 874 768 EUR) in damages. In 2008, the Court of Appeals of Lithuania made a decision to arrest the property of the Riga Airport and of Air Baltic Corporation A/S in the amount of 199 830 000 LTL (57 874 768 EUR)15. The fact of the freezing of the assets of the respondents attracted a lot of attention since the Lithuanian court ruled to freeze assets in another country (Latvia).
15 Decision of the Court of Appeals of Lithuania of 31 December 2008, civil case no. 2-949/2008.
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It should be noted that the Latvian Competition Council recognized in 2006 that Airport Riga abused its dominant position through the award of illegal discounts to “Air Baltic Corporation” A/S. Therefore, as in other of the abovementioned cases, the claimant here was also relying on a decision already adopted by a competition authority, albeit a foreign one. Although AB flyLAL-Lithuanian Airlines presented its claim in 2008, the case is still pending before the Court of Appeals. It is expected that the Court of Appeals should reach a decision in 2015. However, it is also highly possible that the ruling of the Court of Appeals will not become final and will be appealed to the Supreme Court.
4. AB Orlen Lietuva v. the Competition Council of the Republic of Lithuania (2011)
This case is not a clear-cut private enforcement case. However, it is quite interesting since it dealt with a claim for damages submitted against the Competition Council. On 22 December 2005, the Competition Council adopted a resolution recognizing that AB Orlen Lietuva abused its dominant position and imposed upon it a fine in the amount of 32 000 000 LTL (9 267 840 EUR). In 2006, AB Orlen Lietuva paid the fine to the Lithuania state. However, in 2008 the Supreme Administrative Court repealed the original resolution of the Lithuanian Competition Council. Afterwards, AB Orlen Lietuva decided to present a claim for damages to the Competition Council. AB Orlen Lietuva claimed that the State has kept in its possession 32 000 000 LTL (9 267 840 EUR) without any legal basis. It was alleged that if AB Orlen Lietuva would have had this money, it could have earned more than 3 000 000 LTL (868 860 EUR) in revenue. Moreover, AB Orlen Lietuva claimed that it had to borrow 3 000 000 LTL (868 860 EUR) and paid the related interest. In total, AB Orlen Lietuva asked the Court for the award of 4 700 000 LTL (1 361 214 EUR) in damages from the State. The Supreme Administrative Court dismissed the claim of AB Orlen Lietuva and stated that the State should only be responsible if its institutions clearly breach the provisions of the law or legal principles. According to the Court, repealing a certain administrative act of the State, is not a satisfactory ground for the tortuous responsibility of the State16.
16 Decision of the Supreme Administrative Court of Lithuania of 14 July 2011, administrative case no. A502-3034/2011.
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5. UAB Naftos grupė v. AB Klaipėdos nafta (2014)
In 2011, UAB Naftos grupė presented a claim against AB Klaipėdos nafta asking for the compensation of its losses in the amount of 17 090 795,49 LTL (4 949 836 EUR), which allegedly originated from the breach of their Agreement on services. The claim was submitted to the Klaipėda Regional Court. The respondent, AB Klaipėdos nafta, submitted a counter claim and asked the Court to recognize that the Agreement on services is in fact not valid since it is contrary to Article 5 of the Law on Competition. The respondent also asked to adjudge from UAB Naftos grupė a total of 34 778 000 LTL (10 072 405 EUR) in losses, which it allegedly experienced. The respondent asked also to have the case transferred to the Vilnius Regional Court since, according to Article 47 of the Lithuanian Law on Competition, the Vilnius Regional Court has exclusive jurisdiction to deal with cases related to the breach of Articles 101 or 102 TFEU or other restrictive actions prohibited by the Law on Competition. The Klaipėda Regional Court, which had received the original claim, decided to transfer the case to the Vilnius Regional Court. On 17 June 2014, the Court of Appeals unfortunately adopted a confidential decision in this case and the circumstances of the dispute remain undisclosed17. The Court of Appeals has recognized as invalid those specific provisions of the Agreement on services which provided exclusive rights to reload gasoil to UAB Naftos grupė. The Court decided also to adjudge 2 988 341,14 LTL (865 483,37 EUR) to the claimant UAB Naftos grupė. Since the judgment is confidential, it is difficult to comment on whether any important competition law issues have been involved in this case.
6. Main qualifying features of Lithuanian private enforcement practice
Notwithstanding the very limited Lithuanian court practice in antitrust damages litigation, the main features of the existing, sparse jurisprudence can be outlined as follows: a) Almost all of the mentioned cases concerned the abuse of dominance. Moreover, these cases mainly dealt with abuses taking the form of the application of discriminatory conditions towards the injured undertakings. It can be assumed that the fact that most antitrust damages claims are brought against dominant undertakings is not a specific characteristic of Lithuania. After analyzing private enforcement cases from Poland,
17 Decision of the Court of Appeals of Lithuania of 17 June 2014, civil case no. 2A-606/2014.
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Latvia, Estonia, Slovakia as well as other countries, it came as no surprise that most of such cases originated in the abuse of dominance18. This fact may have a number of possible explanations. First, it might be simpler to determine and to prove an abuse of dominance than anti- competitive agreements. Second, a company that suffered from an abuse might be more inclined to present a claim to the court, or approach the Competition Council, than a company which has participated in an anti-competitive agreement as a counterpart because the Competition Council could impose a fine on both undertakings that have concluded the anti-competitive agreement. Third, for those not party to an anti- competitive agreement, it is really difficult to collect evidence concerning such an agreement. An undertaking may suffer damages because of an anti-competitive agreement, but it might have no information that such an agreement has been concluded; b) In most cases, antitrust damages claims have been submitted as follow-on actions. This feature is common to most antitrust damages cases in EU Member States and can be easily explained. First, private enforcement cases are very complex and often suffer from lack of evidence. Moreover, specific expert knowledge in competition law is required. The Competition Council has competition law experts and is empowered to carry out inspections (with prior authorization of the Vilnius Regional Administrative Court) in order to collect evidence for a comprehensive investigation. Second, since antitrust damages cases are complex, they could prove very lengthy and involve huge legal costs. An investigation performed by the Competition Council would allow the claimant to save a considerable amount in costs. Third, if the undertaking may base the claim on the prior decision of the Competition Council, it is much easier to persuade the court that the claim is sound. Fourth, because of the complexity of competition cases, undertakings might quite often have a lot of doubts whether there a competition law infringement actually occurred – a prior decision of the Competition Council would eliminate any doubts concerning the breach; c) Antitrust damages claims have so far only been submitted by undertakings – consumers have not been acting as claimants yet;
18 M. Brkan, T. Bratina, ‘Private Enforcement of Competition Law in Slovenia: A New Field to Be Developed by Slovenian Courts’ (2013) 6(8) YARS 75–106; A. Jurkowska-Gomułka, ‘Private Enforcement of Competition Law in Polish Courts: The Story of an (Almost) Lost Hope for Development’ (2013) 6(8) YARS 107–128; A. Piszcz, ‘Still-unpopular Sanctions: Developments in Private Antitrust Enforcement in Poland After the 2008 White Paper’ (2012) 5(7) YARS 55–77; K. Sein, ‘Private Enforcement of Competition Law – the Case of Estonia’ (2013) 6(8) YARS 129–140.
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d) Legal doctrine on private enforcement is not sufficiently developed in the jurisprudence of Lithuanian courts. One reason for that is the lack of cases. Another reason is that only one case has reached the Supreme Court so far, gathering the judges with the strongest theoretical background.
IV. Obstacles for the development of the private enforcement practice in Lithuania
It should be noted that the reviewed jurisprudence does not reflect all of the antitrust damages claims in Lithuania. One private enforcement case submitted to one of Lithuania’s arbitral tribunals has been dealt with here; it is also known that more competition-related claims have been submitted to arbitration. Moreover, after the Damages Directive enters into force in Lithuania, the national legal system will be amended. These changes will reduce the number of obstacles for antitrust damages claims. A number of barriers preventing an increase in the number of antitrust damage claims in Lithuania includes: a) The complexity of competition cases. This obstacle causes substantial legal costs for the injured party in order to submit the claim. In case of a successful litigation, the legal costs of the injured party will be at least party compensated by the respondent, but the complexity of competition cases means that the final outcome is usually not completely clear; b) The lack of clear-cut jurisprudence of Lithuanian courts; c) Prolonged litigation in antitrust damages claims. This factor is partly caused by the complexity of competition cases. Proceedings may last even far longer if the injured party decides that before presenting its private claim to the court, it would submit a complaint to the Competition Council. In this case, proceedings are likely to last approximately three years longer; d) High legal standard for proving the causal relationship between anti- competitive actions and the damages incurred. Lithuanian courts have already outlined that even if the Competition Council adopts a resolution recognizing a competition law breach, all allegedly injured undertakings are obliged to prove the causal relationship between the illegal actions and the damages they themselves suffered; e) Difficulties related to the calculation of antitrust damages actually suffered. As mentioned, the Court of Appeal has not accepted in one of its cases the damages calculations report prepared by a recognized
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international audit company. Moreover, there is still no jurisprudence to clearly indicate how to calculate damages in competition law cases. There is hope that the Damages Directive will add more clarity concerning the calculation of damages since the Commission has adopted a Communication on quantifying harm in actions for damages based on breaches of Article 101 or 102 of the TFEU.19 Moreover, the Directive has established that EU Member States must ensure that it shall be presumed that cartel infringements cause harm.
V. Conclusions
Public enforcement of competition law is much more developed in Lithuania at the moment than its private enforcement. It is usually thought that the Competition Council is the only entity responsible for the enforcement of competition law. The Directive on antitrust damages actions is introducing a number of important measures for the facilitation of antitrust damages claims. The Directive will harmonize national rules of EU Member States on the submission of antitrust damages claims. However, for the number of private enforcement actions to increase, it is necessary to have more cases of successful private litigations. To a certain extent, this is a vicious circle. So far, all private enforcement claims in Lithuania were brought forth by undertakings – there are no antitrust damages claims submitted by consumers. However, the Parliament of Lithuania has adopted an amendment of the Code on Civil Procedure that will regulate group actions. It can be hoped that the present amendment will create a legal platform for consumers to submit antitrust damage claims.
Literature
Brkan M., Bratina T., ‘Private Enforcement of Competition Law in Slovenia: A New Field to Be Developed by Slovenian Courts’ (2013) 6(8) YARS. Downie G., Charrier M., ‘UK and EU Developments in Collective Action Regimes for Competition Law Breaches’ (2014) E.C.L.R, issue 8.
19 Communication from the Commission on quantifying harm in actions for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union, OJ [2013] C 167/07.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES DEVELOPMENT OF PRIVATE ENFORCEMENT OF COMPETITION LAW… 51
Hjelmeng E., ‘Competition Law Remedies: Striving for Coherence or Finding New Ways?’ (2013) 50 CMLR. Gumbis J., Juonys M., Keserauskas Š., ‘National report for Lithuania concerning the conditions of claims for damages in case of infringement of EC competition rules’ [available at http://ec.europa.eu/competition/antitrust/actionsdamages/national_reports/ lithuania_en.pdf]. Jurkowska-Gomułka A., ‘Private Enforcement of Competition Law in Polish Courts: The Story of an (Almost) Lost Hope for Development’ (2013) 6(8) YARS. Piszcz A., ‘Still-unpopular Sanctions: Developments in Private Antitrust Enforcement in Poland After the 2008 White Paper’ (2012) 5(7) YARS. Sein K., ‘Private Enforcement of Competition Law – the Case of Estoni’ (2013) 6(8) YARS. Terebeiza Ž., ‘Laisvas įrodymų vertinimas civiliniame procese: teoriniai ir praktiniai aspektai’ (2007) 5(95) Jurisprudencija. Weidt C.F., ‘The Directive on Actions for Antitrust Damages After Passing the European Parliament’ (2014) ECLR 2014, 35(9).
VOL. 2015, 8(11)
Individuals and the Enforcement of Competition Law – Recent Development of the Private Enforcement Doctrine in Polish and European Antitrust Law
by
Maciej Gac*
CONTENTS
I. Introduction II. Development of the private enforcement doctrine in the European Union 1. CJEU and private enforcement 2. EC and private enforcement III. Private enforcement and the Polish system of antitrust law 1. UOKiK policy 2. Polish jurisprudence 3. Legislative changes 4. Polish experience with private enforcement – evaluation attempt IV. ‘Private enforcement package’ – towards more effective protection of individuals against anti-competitive behaviors 1. General description 2. Specific elements V. Evaluation attempt VI. Conclusion
Abstract
The following article focuses on the issue of private enforcement of competition law as one of the key elements of the current European and national debate
* Maciej Gac, PhD candidate, Jagiellonian University in Kraków and University of Toulouse; [email protected]. This research was supported by the grant from National Science Centre in Poland awarded at the basis of decision no. DEC-2013/09/N/HS5/00666.
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on the efficiency of competition law. By analyzing this concept, the article aims to determine the influence of the European private enforcement model on the national competition law enforcement practice. The goal of the analysis is to answer two main questions: 1) Does the current convergence of the national competition law enforcement system towards the European model guarantee the establishment of an effective, public-private system of antitrust enforcement? 2) Under which conditions may the development of private methods of antitrust enforcement lead to an increase in the efficiency of Polish and European competition law? In order to address these questions, the article analyses the development of the private enforcement doctrine in the European Union and Poland. It refers to European and Polish jurisprudence on private enforcement, the competition policy of the European Commission as well as of the Polish competition authority – the UOKiK President. It also covers recent legislative changes introduced in the European and national legal orders. The analysis leads to the conclusion that the current convergence of the national antirust system towards the European model did not lead to the establishment of an effective mechanism of private enforcement in Poland. Nevertheless, the assessment of recent changes at the European level gives grounds to assume that the adoption of the Directive on Damages Actions, and its transposition into the national legal order, might overcome this problem and allow for better protection of individuals against anti-competitive behaviors.
Resumé L’article est concentré autour de la question d’application privée du droit de la concurrence comme un des éléments clés du débat européen et national sur l’efficacité du droit de la concurrence. En analysant le concept de «private enforcement», l’article vise à déterminer l’influence du modèle européen d’application privée du droit de la concurrence sur la pratique nationale en droit de la concurrence. Le but de l’analyse est de répondre aux deux questions suivantes: 1) Est-ce que la convergence actuelle de système national du droit de la concurrence vers le modèle européen garantit l’établissement du système efficace d’application du droit de la concurrence? 2) Dans quelles conditions le développement des méthodes privées d’application du droit de la concurrence peut mener à l’augmentation d’efficacité du droit polonais et européen de la concurrence? Afin de répondre aux questions mentionnées ci-dessus, l’auteur analyse le développement de la doctrine du «private enforcement» dans l’Union européenne et en Pologne. L’article se réfère à la jurisprudence des cours européennes et nationales sur l’application privée du droit de la concurrence, à la politique de concurrence de la Commission européenne et l’Autorité nationale de la concurrence, ainsi qu’aux récentes modifications législatives introduites dans l’ordre juridique européen et national. L’analyse effectuée mène à la conclusion que la convergence actuelle de système polonais du droit de la concurrence au modèle européen n’a pas permis
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 55
d’établir un mécanisme efficace d’application privée du droit de la concurrence en Pologne. Néanmoins, l’analyse des changements introduits récemment dans le domaine de «private enforcement» au niveau européen, donne des raisons à croire que l’adoption d’une directive sur les actions privées et sa mise en œuvre dans l’ordre juridique national, peut résoudre ce problème et permettre une meilleure protection des individus contre les violations du droit de la concurrence.
Classifications and key words: collective redress; damages actions; group litigation; private enforcement; public enforcement.
I. Introduction
The concept of private enforcement of competition law has been discussed in Europe for over a decade already and yet, it can still be regarded as a novelty, rather than the standard in the application of competition law. The realization is often stressed that in order to increase the efficiency of antitrust provisions, private enforcement models must be developed, popularized and more commonly used. Nevertheless, once this general standpoint is put into practice, the continuous underdevelopment in the enforcement of competition law by individuals is very noticeable. The European Commission (hereafter, EC) has recently proposed important changes in the area of private enforcement1 and all EU Member States (hereafter, MS) are required to adapt their national legal systems to the standards developed at the EU level. In today’s legal context, it thus seems crucial to answer two key questions: 1) Does the current convergence of a national competition law system towards the European model guarantee the establishment of an effective, public-private system of antitrust enforcement? 2) Under which conditions may the development of private methods of competition law enforcement lead to an increase in the efficiency of Polish and European antitrust law? This article aims to provide answers to these questions. It will not only evaluate current Polish and European experiences in the area of private antitrust enforcement, but will also create grounds for determining the possible direction for its future evolution. The responses given to the above questions will provide the basis for addressing one of the main problems discussed within the ongoing debate on the enforcement of competition law: how to increase its efficiency and ensure an appropriate balance between public and private enforcement methods?
1 See Section IV of this article.
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II. Development of the private enforcement doctrine in the European Union
Private enforcement of competition law, which may be defined as an individually initiated litigation before a court in order to remedy an antitrust infringement2, is not a new concept in the European Union (hereafter, EU). Private enforcement has been widely debated for over 10 years now, and has led to the introduction of several legal instruments at both the EU and national level. Nevertheless, as current experiences show, the process of developing private antitrust enforcement in Europe is far from being over. While its usefulness is widely recognized3, the question that remains is how to establish an effective system of private antitrust enforcement at the European and national level. Importantly, European attempts to address this question have a dual character. On the one hand, they are characterized by the important role played by the Court of Justice of the EU (hereafter, CJEU or Court) in the formulation of the private enforcement doctrine. On the other, they are determined by the activities of the Commission that aim to approximate national antitrust systems and establish a common European private enforcement model. Although both initiatives may be regarded as complementary, recent experiences in this area show also a risk of their mutual incoherence4.
1. CJEU and private enforcement
The jurisprudence of the CJEU on private enforcement has developed significantly in the course of the last decade. A path for private actions was already opened with the Court confirming the direct effect of EU competition law provisions5 and later strengthened by the modernization of the EU
2 K. Huschelrath, S. Peyer, Public and Private Enforcement of Competition Law – A Differentiated Approach, ZEW Discussion Paper No. 13-029, April 2013, p. 5, available at: http://ftp.zew.de/pub/zew-docs/dp/dp13029.pdf. 3 R. Stefanicki, Prywatno-prawne środki dochodzenia roszczeń z tytułu naruszenia reguł konkurencji, Warszawa 2014, p. VII–VIII. 4 See para. IV.2 and IV.3 in thisarticle. 5 A. Jurkowska, Prywatno-prawne wdrażanie wspólnotowego prawa konkurencji, Zeszyty CEN, z. 19, Warszawa 2004, p. 20; A. Jurkowska-Gomułka, Publiczne I prywatne egzekwowanie zakazów praktyk ograniczających konkurencję, Warszawa 2013, p. 122; see also judgments of the Court in: C-127/73 BRT v. SABAM [1974] ECR 00313;C-234/89 Delimitisv. HenningerBrau AG [1991] ECR I-00935; C-333/94 P Tetra Pak International SA v. Commission [1996] ECR I-05951; C-126/97 Eco SwissChina Time Ltd. v. Benetton International NV [1999] ECR I-03055.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 57 antitrust enforcement system6. However, it still took a while for the Court to declare that individuals have a right to initiate private lawsuits after sustaining an antitrust injury. In fact, it wasn’t until the 2001 Courage judgment when the Court first held that: ‘The full effectiveness of Article 85 of the Treaty [Article 101 TFEU] […] would be put at risk if it were not open to any individual to claim damages for loss caused to him by a contract or by conduct liable to restrict or distort competition’7. The CJEU thus confirmed that the private enforcement method shall constitute an important part of an effective antitrust enforcement system. The Court stated also that the lack of a private enforcement mechanism could deprive individuals of appropriate protection and lead to a situation where the efficiency of EU competition law would be threatened8. Subsequent judgments, rendered in the Manfredi9, Pfleiderer10, Donau- Chemie11 and Otis12 case, led to the formulation of the main principles of the European private enforcement doctrine and addressed several procedural issues of key importance for its efficiency13. It may thus be said that the CJEU played not only an active role in creating the grounds for the development of private enforcement, but became one of the main actors in determining its current character. According to some authors, CJEU jurisprudence constituted a response to important limitations of private enforcement and established the grounds for its evolution14.
6 E. Camilleri, ‘A decade of EU antitrust private enforcement: chronicle or failure foretold?’ (2013) 34(10) ECLR 531. 7 Case C-453/99 Courage Ltd v Bernard Crehan and Bernard Crehan v Courage Ltd and Others [2001] ECR I-06297, para 26. 8 V. Milutinovic, ‘Private enforcement – Upcoming issues’, [in:] G. Amato (ed.), EC Competition law: A critical assessment, Oxford 2007, p. 727. 9 Joined cases C-295/04 to C-298/04, Manfredi v. Lloyd AdriaticaAssicurazioniSpA et al. [2006] ECR I-06619. 10 Case C-360/09 Pfleiderer AG v Bundeskartellamt [2011] ECR 05161. 11 Case C-536/11 Bundeswettbewerbsbehörde v. DonauChemie AG and Others, ECLI:EU:C:2013:366. 12 Case C-199/11 Europese Gemeenschap v. Otis NV and Others, ECLI:EU:C:2012:684. 13 See for example the Manfredi judgment where the Court confirmed the broad legitimacy of parties entitled to initiate private proceedings, argued in favour of a wide scope of damages, and stressed that the limitation period for bringing a damages claim provided in national law shall not render the exercise of the right to compensation practically impossible or excessively difficult. 14 See E. De Smijter, D. O’Sullivan, ‘The Manfredi judgment of the ECJ and how it relates to the Commission’s initiative on EC antitrust damages actions’ (2006) 3 Competition Policy Newsletter; M. Carpagno, ‘Private Enforcement of Competition Law Arrives in Italy: Analysis of the Judgment of the European Court of Justice in Joined Cases C-295-289/04 Manfredi’ (2006) 3(1) The Competition Law Review; A. Jurkowska, ‘Roszczenia z tytułu naruszenia wspólnotowego prawa ochrony konkurencji przez podmioty prywatne – glosa do wyroku ETS z 13.07.2006 r.
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Apart from creating a frame for private enforcement, the Court played also an important role in resolving its current problems. The Pfleiderer and DonauChemie judgments, of 2011 and 2013 respectively, addressed the issue of access to leniency materials by private parties claiming damages. Although it was widely recognized that limited claimants’ access to proofs of violations was one of the main obstacles in the development of private actions, it was still necessary to determine if EU law limits access to leniency documents15. Referring to this question in Pfleiderer, the CJEU accepted that leniency programmes were a useful tool in the fight against cartels16. Yet the Court also stressed that they were not the only instrument contributing to the maintenance of effective competition – private damages actions could also play a significant role here17. Despite accepting that the effectiveness of national leniency programmes could be threatened if leniency documents were to be disclosed18, the Court concluded therefore that the provisions of EU law do not preclude a person adversely affected by an antitrust infringement from obtaining access to leniency documents when seeking compensation19. The Pfleiderer ruling was more than just an answer to the dilemma of the national court hearing the original case. Most importantly, it dealt with limitations facing damages actions in Europe20. The main barrier to their effective development (limited access to evidence) could have been eliminated. Moreover, the asymmetry in the position of injured individuals and accused undertakings was decreased. Finally, the importance of private actions in the overall competition law enforcement system was strengthened. The standpoint expressed in Pfleiderer was further developed in DonauChemie. The Court was supposed to determine here if a given national rule contradicted EU law. The rule in question granted access to leniency materials subject to the consent of the undertaking that submitted them. According to the CJEU, while deciding on the disclosure of leniency materials, a national court should always have the right to weigh the two opposing interests: w połączonych sprawach: od C – 295 do 298/04 Manfredi’ (2009) 3 Europejski Przegląd Sądowy. 15 G. Goddin, ‘The Pfleiderer Judgment on Transparency: The National Sequel of the Access to Document Saga’ (2012) 3(1) Journal of European Competition Law & Practice 40-42. 16 Case C-360/09 Pfleiderer AG, para. 25. 17 Ibidem, paras. 28–29. 18 Ibidem, paras. 26–27. 19 Ibidem, para. 33. 20 M. Gac, ‘Public versus private enforcement of European competition law – the evolution of case-law on access to leniency materials after Pfleiderer judgment’ [in:] K. Dobosz, M. Scheibe, K. Nowak (eds.), In short but to the point – comments on EU law, Kraków 2013, p. 199–201.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 59 the right to access evidence and the requirement to protect information provided by an undertaking21. In the opinion of the CJEU, national court must have such prerogative in order to preserve a proper balance between public and private enforcement and ensure effective application of antitrust provisions22. As a result, the Court held that any rule of national law which limits the competences of a court to assess the possibility of access to leniency documents, should be regarded as hindering rights conferred on individuals under the Treaty and contrary to EU law23. Finally, the CJEU played an active role in broadening the scope of the private enforcement doctrine. This may be illustrated by the Otis ruling where the Court held that the EU may initiate a private action and bring a claim for damages before a national court if it is a victim of an antitrust infringement24. By granting such right to the EU, the Court confirmed that despite all the risks resulting from such construction, in particular the imbalance in the procedural position of the parties, a wide and effective private enforcement model must be ensured in Europe25.
2. EC and private enforcement
The evolution of the Court’s jurisprudence was followed by changes in the policy of the Commission providing a positive response to the doctrinal developments of the CJEU. Neelie Kroes, former EU Commissioner responsible for competition, stated that it was not enough to claim that individuals injured by anti-competitive behaviors shall have a right to claim damages. In her opinion, it was also necessary to provide them with an effective means of enforcing this right in court26. The Commission took its first steps to achieve this objective at the end of 2003 when it decided to launch comparative studies of the relevant legal systems found in MS. Its goal was to identify what national rules were governing, at that time, damages claims resulting from antitrust violations. The results of this
21 Case C-536/11 Bundeswettbewerbsbehörde v DonauChemie AG, para. 30. 22 Ibidem, para. 31, 51. 23 Ibidem, para. 31. 24 Case C-199/11 EuropeseGemeenschap v Otis NV, para. 77. 25 A. Vallery, ‘Otis: Can the Commission be a Victim in Addition to Acting as a Police Officer, a Prosecutor and a Judge?’ (2013) 4(3) Journal of Competition Law & Practice 232–236. 26 N. Kroes, ‘Enhancing Actions for Damages for Breach of Competition Rules in Europe’ SPEECH/05/533,available at: http://europa.eu/rapid/press-release_SPEECH-05-533_ en.htm?locale=en.
VOL. 2015, 8(11) 60 MACIEJ GAC so-called Ashurst Report27 were shocking. The Report determined that private enforcement mechanisms were totally underdevelopment in Europe, and that an astonishing diversity of national solutions was being used across the EU28. Such critical assessment confirmed that more decisive steps had to be taken by the EC, national legislators and national competition authorities (hereafter: NCAs) in order to provide individuals with effective safeguards against anti- competitive behaviors. As a result, a Green Paper on damages actions29 was published one year later, and the EC initiated a widespread European debate on private enforcement. Its conclusion was clear: facilitating private actions was a logical next step in the development of antitrust enforcement and an important element in the creation of a competitive economy30. The works conducted in the following years led to the publication of a White Paper on damages actions31. The document was based on European jurisprudence and the results of extensive public consultations and supposed to constitute a response to the limitations of private enforcement. It argued in favour of more liberal rules on the disclosure of evidence, easier calculation of damages, and more effective enforcement mechanisms. It also spoke for the adoption of a binding European legal instrument on private actions which would guarantee a greater level of transparency, coherence and efficiency32. Despite the wide scope of the proposed changes, the desired goal of increasing the role of private antitrust enforcement was not achieved in Europe. The attempt to propose a directive on private actions failed and so did the discussion on private enforcement. However, some authors say that the White Paper constituted a turning point in the development of the European private enforcement doctrine33. It codified and restated existing acquis on the right of individuals to claim compensation. It also marked a point of no return – as A. Komninos stated: ‘it showed that even if the whole initiative to introduce
27 Comparative report – Study on the conditions of claims for damages in case of infringement of EC competition rules, available at: http://ec.europa.eu/competition/antitrust/actionsdamages/ comparative_report_clean_en.pdf. 28 Ibidem, p. 1. 29 Green Paper – Damages actions for breach of the EC antitrust rules, COM(2005) 672, 19.12.2005. 30 Commission Staff Working Paper – Annex to the Green Paper – Damages actions for breach of the EC antitrust rules, SEC(2005) 1732, p. 9–11, 31 White paper on damages actions for breach of the EC antitrust rules {SEC(2008) 404} {SEC(2008) 405} {SEC(2008) 406} /* COM/2008/0165 final */. 32 Commission Staff Working Paper accompanying the White paper on damages actions for breach of the EC antitrust rules {COM(2008) 165 final} {SEC (2008) 405} {SEC (2008) 406} /* SEC/2008/0404 final */, pt. 332–333. 33 A. Komninos, ‘The Road to the Commission’s White Paper for Damages Actions: Where We Came From’ (2008) 4(2) Competition Policy International.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 61
Community measures for private actions were abandoned, the existing acquis itself was a Community minimum from which there can be no departure’34. The last stage of the Commission’s activity in the area of private enforcement took place between 2011 and 2014 and covered two key initiatives: the European debate on group litigation35 and the EC’s recent works on a private enforcement directive36. The EC initiated a discussion on group litigation in February 2011. Its goal was to identify what legal principles underpin national collective redress systems, and to determine whether it is possible to introduce such instrument at the European level. However, formulating a common position on this issue proved to be hard to do. The majority of the MS, most of legal experts, and all consumers argued in favour of the introduction of a collective redress mechanism on the EU level. Still, business representatives and certain MS were against European intervention in this area, claiming that the EC’s proposal on collective redress would have no legal value and would infringe the rules of subsidiarity and proportionality37. Despite the disagreement between the supporters and the opponents of group litigation, public consultations confirmed that introducing a collective redress mechanism could bring several benefits to individuals enforcing competition law. It would limit the costs of private actions, increase access to proofs of antitrust violation, and reduce information asymmetry between individuals and undertakings. Hence, the European Parliament decided to speak in favour of the development of an EU collective redress mechanism. It stated that: ‘action is needed at EU level in order to improve the current EU regulatory framework so as to allow victims of infringements of EU law to be compensated for the damage they sustain and thus contribute to consumer confidence and smoother functioning of the internal market’38. In the end however, the EC decided to take a rather conformist approach while dealing with the results of the public consultations procedure. Instead
34 Ibidem, p. 98. 35 Commission Staff Working Paper Document Public Consultation: Towards a Coherent European Approach to Collective Redress, SEC(2011)173 Final. 36 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, OJ [2014] L 349/1. 37 See Evaluation of contributions to the public consultation and hearing: ‘Towards a Coherent European Approach to Collective Redress’, Study JUST/2010/JCIV/CT/0027/A4, available at: http://ec.europa.eu/competition/consultations/2011_collective_redress/study_heidelberg_ overview_en.pdf. 38 European Parliament resolution of 2 February 2012 on ‘Towards a Coherent European Approach to Collective Redress’, 2011/2089(INI), para. 4.
VOL. 2015, 8(11) 62 MACIEJ GAC of proposing an EU instrument on group litigation, it published non-binding recommendations on common principles for collective redress39. Undoubtedly, such solution is easier to adapt to the differences existing between MS. However, the question remains: will such an act actually guarantee greater efficiency of private enforcement? Non-binding recommendations risk preserving the current status quo which, according to the EC’s and the Parliament, may be described as a complex legal patchwork of national solutions, each of which is unique and none of which is fully effective40. Hence, can the Commission’s recent activity in the area of on group litigation be considered as a step forward? Or rather, is it a step back in the development of an effective mechanism of private enforcement in Europe41? The second of the recent initiatives undertaken by the EC in the private enforcement field concerns a proposal for a directive on antitrust damages actions. This initiative can be regarded as a much more far-reaching solution. Its specific elements will be described in details in the last part of this article. Suffice to say here that due to the proposed legislative method as well as the scope of the pursued objectives, this initiative may be considered as an important step in the development of the private enforcement doctrine in Europe. Its introduction may finally ensure that all individuals injured by an anti-competitive behavior will be entitled to effective protection, and that the principles stipulated by the CJEU as early as 2001 will finally be achieved. To sum up, the CJEU and the EC were the main actors in the development of the European private enforcement doctrine in the course of the last decade. Through their judicial and legislative activity, they led to the establishment of key elements of the private enforcement mechanism, which if adopted at national level, could lead to better protection of individuals against anti- competitive behaviors. Yet in Europe’s decentralized antitrust enforcement system, EU policy depends strongly on the activities of national courts, legislators, NCAs and individuals because they are all involved in the design and practical use of private enforcement mechanisms. As a result, the steps undertaken at the European level may be squandered by the reluctance
39 See Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law, OJ [2013] L 20/60. 40 Commission Staff Working Paper Document Public Consultation: Towards a Coherent European Approach to Collective Redress…, pt. 9; European Parliament Directorate General for Internal Policies, Overview of existing collective redress schemes in EU Member States, July 2011, pt. 3, available at: http://www.europarl.europa.eu/ document/activities/cont/201107/2011 0715ATT24242/20110715ATT24242EN.pdf. 41 See M. Gac, ‘The road to collective redress in the European Union: 2011 – a step forward or a step back in the introduction of a collective redress mechanism’ [in:] K. Dobosz (ed.), Current developments of the European Union Law 2011/2012, Kraków 2013, p. 93–109.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 63 of national legislators and NCAs to create effective private enforcement mechanisms, and by the unwillingness of individuals to use them and courts to support their development. In order to fully evaluate the European private enforcement doctrine, a reference to national practice is thus required. It will help to correctly assess whether the current convergence of national systems towards the European model guarantees the establishment of an effective antitrust enforcement system in the EU.
III. Private enforcement and the Polish competition law system
The Polish competition law system may be regarded as an example of approximation of national solutions towards the model developed at the EU level. Therefore, the second part of the article will be devoted to the analysis of the policy of the Polish competition authority, national jurisprudence, and legislative changes introduced in this area in the course of the last decade. The goal of this analysis will be to ascertain if the approximation of Polish antitrust law and practice towards the European model has led to the establishment of effective methods of private antitrust enforcement, and created grounds for the development of a comprehensive public-private system of antitrust enforcement in Poland.
1. UOKiK policy
The first area where it is possible to try assessing the influence of the European private enforcement doctrine on the Polish competition law system concerns the activity of the Polish competition authority – the UOKiK President. The analysis of the NCA’s policy during the last decade shows strong support of the UOKiK President for the development of private antitrust enforcement in Poland. This is reflected in competition policy documents for 2008, 2011 and 2014. They show that the promotion of private enforcement among consumers and entrepreneurs (as potential victims of antitrust infringements) was one of the NCA’s goals in the last decade42. Individuals’ knowledge on private enforcement was supposed to have been increased thanks to the conduct of informative campaigns leading to their more frequent use. According to the UOKiK’s most recent policy document, greater importance of the private
42 Polityka konkurencji na lata 2008–2010, UOKiK, Warszawa 2008, p. 151–152; Polityka konkurencji na lata 2011–2013, UOKiK, Warszawa 2011, p. 44–46; Polityka konkurencji na lata 2014–2018, UOKiK, Warszawa 2014, p. 76–80.
VOL. 2015, 8(11) 64 MACIEJ GAC method is supposed to establish an effective, bipolar(public-private) system of antitrust enforcement. At the same time, it should motivate individuals to disclose existing cartels, and make it possible to adapt the national policy to changes developed at the EU level43.This view finds confirmation in statements made by recent UOKiK Presidents. Already in 2007, C. Banasiński argued in favour of introducing a clear basis for the enforcement of competition law by individuals injured by antitrust infringements in Poland44. Three years later, M. Krasnodębska-Tomkiel said that: ‘Private enforcement is a solution worth propagating. In my opinion, it constitutes an important support to the activities undertaken by the competition authority in the area of public enforcement and serves individuals injured by antitrust infringements to enforce their rights by the mean of civil proceedings’45. Nevertheless, despite recognizing the need to develop the private enforcement mechanism in Poland, the NCA failed to take any decisive steps in order to achieve this objective in the course of the entire last decade. First, it did not present any legislative proposals on private enforcement, which could have potentially formed part of the Polish competition law reforms of 2007 or 2014. Second, it did not publish any guidelines or recommendations concerning private enforcement. Finally, despite evoking information campaigns as one of the key steps in developing the private enforcement doctrine in Poland46, the NCA has never conducted any such campaigns. Even with strong support of the idea of private enforcement, the Polish NCA was thus unable to ensure effective means by which the European doctrine could reach its Polish addresses.
2. Polish jurisprudence
National jurisprudence represents the second area where the approximation of the Polish antitrust system towards the EU private enforcement doctrine can be observed. Its significance is especially important in the decentralized system of EU antitrust enforcement where, according to Regulation 1/2003, ‘National courts have an essential part to play in applying the Community
43 Polityka konkurencji na lata 2014-2018, UOKiK, Warszawa 2014, p. 75–76. 44 M. Bernatt, ‘Relacja ze spotkania okolicznościowo-naukowego Centrum Studiów Antymonopolowych i regulacyjnych’ (Wydział Zarządzania UW, 20 czerwca 2007 r.), pt. 2.2, available at: http://www.cars.wz.uw.edu.pl/tresc/konferencje/01/sprawozdanie_private_ enforcement.doc. 45 See ‘Aktualne problemy polityki konkurencji’ – wystąpienie Prezes UOKIK dr Małgorzaty Krasnodębskiej-Tomkiel, Konferencja jubileuszowa z okazji XX-lecia UOKiK, 27.05.2010, p. 6, available at: www.uokik.gov.pl/download.php?plik=8422. 46 See UOKiK, Polityka konkurencji na lata 2008-2010, Warszawa 2008, p. 151–152.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 65 competition rules. When deciding disputes between private individuals, they protect the subjective rights under Community law, for example by awarding damages to the victims of infringements. The role of the national courts here complements that of the competition authorities of the Member States’47. Two main particularities come to light when analyzing Polish jurisprudence on private enforcement: the support expressed by national courts to the idea of private enforcement, and the low number of private antitrust cases in Poland. Hence, while the position of the national judiciary seems to create solid grounds for the development of private enforcement in Poland, courts struggle to provide a positive response to the EU doctrine due to the reluctance of individuals to actually initiate private actions48. Referring to specific elements of domestic jurisprudence, it can be stated first that an individual’s right to enforce competition law before a court was recognized in Poland long before the CJEU’s Courage ruling. Already at the end of 1993, the Polish Antimonopoly Court, while referring to the problem of private enforcement, held that: ‘The lack of a public interest violation does not mean that an individual injured by the illegal behavior of a certain undertaking, may not protect its fundamental rights. There is no obstacle in enforcing such rights before the court’49. This standpoint was confirmed in a Polish Supreme Court judgment of May 2001 where it was held that: ‘Individual rights of market participants may be enforced by way of claims brought before common courts of law or administrative courts’50. This judicial line was reaffirmed once again in a ruling of the Polish Antimonopoly Court delivered in January 2003. It was stated therein that: ‘Due to the public character of the antimonopoly act, its goal is not the direct protection of individual rights of market participants injured by the activities of other undertakings. Such protection constitutes the subject of the activity of the common courts of law’51. The above jurisprudence confirms that Polish courts had already established strong grounds for the adoption of the private enforcement doctrine into the national legal order when the doctrine had only just started to develop in the EU. The right to directly enforce antitrust provisions, and claim compensation in case of an antitrust injury, could thus have been based on national
47 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ [2003] L 1/1; para 7 of the Preamble. 48 See A. Jurkowska-Gomułka, ‘Private Enforcement of Competition Law in Polish Courts: The Story of an (Almost) Lost Hope for Development’ (2013) 6(8) YARS 107–128. 49 Judgment of the Polish Antimonopoly Court of 29 December 1993, XVIIAmr 42/93, (1994) 5 Wokanda. 50 Judgment of the Polish Supreme Court of 29 May 2001, I CKN 1217/98, (2002) 1/13 OSNC. 51 Judgment of the Polish Antimonopoly Court of 15 January 2003, XVII Ama 29/2002.
VOL. 2015, 8(11) 66 MACIEJ GAC jurisprudence and, as many authors stressed, on general rules of civil law52. Despite having solid legal grounds, the importance of private enforcement in Poland did not increase however. Moreover, courts dealing with private antitrust cases were faced with difficulties, which significantly hampered progress in this area. The first problem faced by the Polish judiciary was the limited number of cases brought before them by individuals injured by antitrust infringements. According to a report prepared by A. Jurkowska-Gomułka, the number of private enforcement cases initiated before Polish courts between 1999 and 2012 was very low – it did not exceed 1053. Moreover, as the author highlights, none of these cases was initiated by consumers – they were all were brought forward by entrepreneurs. Furthermore, almost all of the proceedings concerned abuse of dominance and aimed to confirm the nullity of a contract resulting from anti-competitive behavior. None of the claims sought compensation for an antitrust infringement and none involved a violation of EU competition law provisions. The second problem concerned the content of the cases brought before Polish court. Without going into detail, only one issue analyzed so far by the Polish judiciary – the binding force of UOKiK decisions – gave grounds for a private enforcement debate and led to its development. The binding force of an antitrust decision on a civil court deciding in a given case is of crucial importance to follow-on actions, and ended up the focus of the Polish judiciary for over 10 years. While early judgments argued in favour of the independence of civil courts54, the most recent views state quite the opposite. In its judgment of July 2008, the Supreme Court held that a final decision of the UOKiK President in a particular case should be binding upon the court dealing with the same practice, unless the NCA issued a commitments decision. According to the Court: ‘It shall not raise any doubts that it would be undesirable if the evaluation of the same practice by the court and the competition authority could be divergent. It appeals to claim that the final decision of the competition authority on the abuse of a dominant position
52 See, e.g., M. Bernatt, ‘Prywatny model ochrony konkurencji oraz jego realizacja w postępowaniu przed sądem krajowym’ [in:] E. Piontek (ed.), Nowe tendencje w prawie konkurencji Unii Europejskiej, Warszawa 2008, p. 448–449; P. Podrecki, Porozumienia monopolistyczne i ich cywilnoprawne skutki, Kraków 2000, Chapter IV, Letter B, all claiming that a right for compensation in the case of competition law violations may be derived from Article 417 of the Civil Code (tort liability) and Article 471 of the Civil Code (unjust enrichment). 53 See A. Jurkowska-Gomułka, Comparative competition law private enforcement and consumer redress in the EU 1999–2012, available at: http://www.clcpecreu.co.uk/pdf/final/ Poland%20report.pdf; see also D. Hansberry-Biegunska, ‘Poland’ [in:] I. K. Gotts (ed.), The Private Competition Enforcement Review, 4th ed., London 2011, p. 251–259. 54 See e.g. Judgment of the Polish Supreme Court of 22 February 1994, I CRN 238/93.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 67 shall be binding upon the civil court. Such standpoint is consistent with the rule that civil courts are generally bound by final administrative decisions’55. The aforementioned ruling could be regarded as a positive step in the development of the private enforcement doctrine in Poland, and an attempt to approximate Polish enforcement practice with the EU model. Despite its significant importance for private follow-on actions, the ruling did not, however, result in a practical increase in the number of proceedings initiated by victims of antitrust infringements. Due to the lack of a reciprocal link between jurisprudence and individuals’ will to open private actions, the importance of jurisprudence in the development of the private enforcement method was once again put in question. The last limitation of Polish jurisprudence in the area of private enforcement results from its character and problems with its accessibility. Judgments are rendered in individual cases and do not have binding effects on other courts deciding on the same subject matter. Moreover, access to jurisprudence, which could potentially foster a public debate on private enforcement and promote a doctrinal analysis of the discussed issue, is largely limited in Poland56. The possible influence of Polish jurisprudence on the development of the private enforcement doctrine is thus not only limited by the low number of domestic private enforcement cases and their restricted substantive content, but also by problems in accessing existing rulings.
3. Legislative changes
The final area where changes concerning the issue of private enforcement may be observed, relates to legal reforms introduced in Poland in the course of the last decade. These include: the Polish Act on Competition and Consumer Protection (hereafter: Competition Act) of 200757, the Law on Group Litigation of 200958, and a reform of the Competition Act adopted by the Polish Parliament in 201459. All of these legislative steps contain
55 Resolution of the Polish Supreme Court resolution of 23 July 2008, III CZP 52/2008, (2009) 2 Monitor Prawniczy 90. 56 A. Jurkowska-Gomułka, Comparative competition law private enforcement and consumer redress in the EU 1999-2012…, p. 3. 57 Act of 16 February 2007 on Competition and Consumer Protection (Journal of Laws 2007 No. 50, item 331, amendments: Journal of Laws 2007 No. 99, item 99; Journal of Laws 2007 No. 171, item 1206 as amended). 58 Act of 17 December 2009 on Pursuing Claims in Group Proceedings (Journal of Laws from 2010, No. 7, item 44). 59 Act of 10 June 2014 amending the Act on Competition and Consumer Protection and Act – Code of Civil Procedure (Journal of Laws 2014, item 945).
VOL. 2015, 8(11) 68 MACIEJ GAC a response, however limited, to particular problems of the private enforcement method. The first legal instrument requiring attention here is the Competition Act of 2007. Although the act did not establish a separate private enforcement mechanism, its authors believed that it opened a path for the development of private actions in Poland. According to the earlier Competition Act of 2004, antitrust proceedings could be opened in Poland ex officio or by means of a complaint. The possibility of initiating administrative proceedings on the basis of an individual complaint was intentionally removed. Public enforcement on the basis of the Competition Act of 2007 was thus to be limited to the NCA’s own initiative to take action against a company engaged an anti-competitive conduct. According to A. Piszcz the reform had little in common with the approach expressed by the Commission in the Green and White Paper on damages actions60. According to the authors of the Competition Act of 2007 the above change was meant to enhance private enforcement and develop a comprehensive, dual system of competition law enforcement in Poland. It was argued that: ‘The proposed change is inspired by EU policy which aims to increase the importance of private enforcement of competition law in EU Member States’61. It was also said that the reform was needed to increase the efficiency of competition law enforcement, accelerate public proceedings and give strong incentives to individuals to submit damages claims. According to the justification to the draft Competition Act of 2007: ‘In the public enforcement system, only the most important violations of competition law, having particularly negative influence on competition, shall be examined. Whereas individuals injured by antitrust infringements shall enforce their rights (claim for the nullity of the agreement, cessation of violation or damages) before civil courts. The bi-polar model, in which two ways of competition law enforcement exist next to each other, shall ensure a complementary character of public and private enforcement’62. Many scholars criticized the proposed changes claiming that the reform did not provide a sufficient justification for such a far-reaching change, and did not have an appropriate basis in the EU competition law enforcement model63. Despite these criticisms, the new solutions were adopted. However,
60 See A. Piszcz, ‘Still-unpopular Sanctions: Developments in Private Antitrust Enforcement in Poland after 2008 White Paper’ (2012) 5(7) YARS 62. 61 See p. 20 of the justification to the Act on Competition and Consumer Protection, available at: http://orka.sejm.gov.pl/Druki5ka.nsf/0/06AED0325C1F3B3FC125722600445A4A /$file/1110.pdf. 62 Ibidem, p. 17. 63 See M. Bernatt, Sprawiedliwość proceduralna w postępowaniu przed organem ochrony konkurencji, Warszawa 2011, p. 158 et seq.; M. Krasnodębska-Tomkiel, D. Szafrański,
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 69 the Competition Act of 2007 had an inherent weakness from the start: while complaint-based proceedings were abolished, the Act did not contain an effective mechanism for private actions. As a result, private antitrust enforcement had limited chances of success. The second reform introduced into the Polish legal system in the course of the last decade, which may be regarded as providing a response to the European private enforcement debate, concerns the adoption of an Act on Pursuing Claims in Group Proceedings. This Act established a possibility to use group proceedings inter alia in the case of competition law infringements. Many authors regarded this act as an attempt to respond to the limited efficiency of private actions in Poland64. The act allowed for the grouping within one proceeding of at least 10 individuals injured by the same infringement. Thanks to this construction, the new legislation was supposed to overcome several difficulties faced by private enforcement, such as limited access to proofs of a violation, information asymmetry, high costs of proceedings, or low incentive to sue. As it was stated in the justification of the Act: ‘Group litigation allows for increased access to justice in cases where pursuing a claim is more preferential within such proceedings than in an individual dispute (e.g. in case of small damages claims from the same party which caused the injury), and as a result leads to increase of judicial protection’65. Despite the novelty of the group litigation instrument and its far-reaching goals, its empirical analysis from a 4-year perspective shows the limited practical significance of this mechanism, especially in the area of competition law. According to the data provided by the Polish Ministry of Justice, in the period from 2010 to 2012, 93 group litigations were initiated before Polish courts66. Still, while the number of group proceedings was rather satisfactory in the first two years of the functioning of the act, the year 2013 showed a decrease in the number of group claims67. Moreover, most of the proceedings proved very long and caused major difficulties for the group plaintiffs due to the formalized character of the conditions for initiating a claim and conducting
‘Skuteczność prawa antymonopolowego’, [in:] T. Giaro (ed.), Skuteczność prawa, Warszawa 2010, p. 107–108; see also A. Piszcz, ‘Still-unpopular Sanctions...’, p. 62. 64 See M. Sieradzka, Ustawa o dochodzeniu roszczeń w postępowaniu grupowym. Komentarz, Warszawa 2010, p. 15–16, T. Jaworski, P. Radzimierski, Ustawa o dochodzeniu roszczeń w postępowaniu grupowym. Komentarz, Warszawa 2010, p. 4. 65 See justification to the Act on Pursuing Claims in Group Proceedings, p. 2–3, available at: http://orka.sejm.gov.pl/Druki6ka.nsf/0/0E73993108750163C125758A004227CB/$file/1829.pdf. 66 See statistics of the Polish Ministry of Justice for the period 2010-2012 available at: bip. ms.gov.pl/pl/dzialalnosc/statystyki/statystyki-2013/download,2350,15.html. 67 See results of a debate: ‘Pozwy zbiorowe – prawo i pratyka’ (in English: Collective actions – law and practice) organized by PAP on 16.01.2014, available at: http://www.bankier. pl/wiadomosc/Pozwy-zbiorowe-w-liczbach-3038473.html.
VOL. 2015, 8(11) 70 MACIEJ GAC the proceedings68. It also needs to be noted that only five of such cases concerned violations of unfair competition rules, and they were all initiated by companies, not individuals69. Finally, none of these cases concerned a violation of antitrust provisions70. The last legal instrument that needs to be analyzed here is the Act amending the Competition Act and the Code of Civil Procedure (hereafter: Amending Act), adopted by the Polish Parliament in June 201471. The Amending Act has two main objectives: to increase the efficiency of competition law enforcement and to simplify competition proceedings72. It also tries to respond to current European and international antirust policy with the goal to ‘increase detection of most significant violations of antitrust law, strengthen the position of weaker participants of the market and informalize and accelerate applied procedures’73. While both goals are worthwhile, the following question arises: does this recent reform allow for better protection of weaker parties against antitrust infringements? In other words, does it provide effective solutions to current limitations of private enforcement in Poland? The changes proposed by the Amending Act refer mainly to the leniency programme, concentration control, antimonopoly proceedings, and the fining policy. Their analysis makes it possible to conclude that the Polish legislator omitted the current European debate on private enforcement from its reform proposal. While the justification of the draft Amending Act stressed the need to strengthen the position of weaker market participants, very few provisions of the new legislation actually aim to increase the efficiency of private enforcement. They include the introduction (Article 635 of the Code of Civil Procedure) of the right of the UOKiK President to participate in civil damages proceedings as an amicus curiae. They also include the prolongation (new wording of Article 93 of the Competition Act) of the limitation period for pursuing anti-competitive practices by the UOKiK from 1 to 5 years. The first change allows for greater participation of the NCA in private proceedings, and may thus lead to an increase in the efficiency of private actions. The second change may have a positive, indirect influence on follow-on actions
68 I. Gabrysiak, Postępowanie grupowe w polskim prawie, FundacjaInstytutPrawPublicznych, Warszawa 2014, p. 23–24. 69 See results of a debate: ‘Pozwy zbiorowe – prawo i pratyka’ organized by PAP on 16.01.2014, available at: http://www.bankier.pl/wiadomosc/Pozwy-zbiorowe-w-liczbach-3038473.html. 70 A. Jurkowska-Gomułka, Comparative competition law private enforcement…, p. 3. 71 Act of 10 June 2014 amending the Act on Competition and Consumer Protection and Act – Code of Civil Procedure (Journal of Laws 2014, item 945). 72 See justification to the project of Act amending the Act on Competition and Consumer Protection and Act – Code of Civil Procedure, p. 1, available at: http://orka.sejm.gov.pl/ Druki7ka.nsf/0/9F27C3A04DCCA6E8C1257BE3003730DF/%24File/1703.pdf. 73 Ibidem, p. 1.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 71 brought by individuals injured by antitrust infringements. A longer period for the NCA to discover and pursue anti-competitive behavior may lead to an increase in the time when individuals are entitled to bring private actions. According to Article 442 of the Polish Civil Code, individuals injured by a law infringement may claim compensation within 3 years from the date when they had found out about the injury and the person responsible for the infringement. Extending the time for the UOKiK President to pursue infringements may thus indirectly result, in the case of follow-on actions, in a potentially longer time for the detection of infringements and pursuing a damages claim by an injured individual. Apart from these two procedural modifications, the Amending Act does not contain any other changes that might increase the efficiency of private actions in Poland. In fact, some of its amendments may actually be regarded as undermining the efficiency of the private method. This could be the case with the new paragraphs 2a and 2b of Article 47933 of the Polish Code of Civil Procedure which is meant to limit access to leniency materials by private damages claimants. According to the justification to the Amending Act, this change aims to preserve the attractiveness of leniency and ensure public trust in the activity of the UOKiK President74. However, the new rule seems to contradict the Pfleiderer and DonauChemie rulings. By subordinating access to leniency materials to the approval of the undertaking, it practically eliminates the possibility of access to these documents by injured individual, and significantly decreases their chances to obtain proof of the infringement. It can be stated therefore that the most recent legislative measure adopted in the area of Polish antitrust provisions fails to respond to the European private enforcement debate. While the EC and CJEU strongly reaffirm the need to increase the protection of individuals against antitrust infringements, the Polish legislator has focused instead on the development or enhancement of the public enforcement method, omitting private actions. Such approach is rather disappointing, and does not correspond with the need to strengthen the position of weaker market participants expressed in the justification to the draft reform.
4. Polish experience with private enforcement – evaluation attempt
The evaluation of the Polish competition law enforcement system shows that the desired goal of increasing the importance of the private mechanisms was not fully realized, despite the legal changes introduced in the last decade,
74 Ibidem, p. 26–27.
VOL. 2015, 8(11) 72 MACIEJ GAC and the gradual approximation of national solutions with the European model. First, the policy of the UOKiK President in the area of private enforcement has neither lead to an increase in individuals’ knowledge on private enforcement measures, nor to the introduction of effective private enforcement mechanisms. Despite the NCA’s declared support of the private enforcement idea, it did not come forward with proposals that could make it possible to adapt European solutions to the Polish reality. Second, legal reforms introduced in Poland between 2004 and 2014 did not lead to the establishment of effective private enforcement mechanisms; mainly focusing on the enhancement of the public enforcement method, private actions were left to be debated. As a result, the 2004 status quo was preserved. Individuals have a possibility to enforce their rights in courts if they suffered an antitrust injury but they are deprived of effective mechanisms to do so. This situation did not improve with the elimination of complaint- based proceedings, or the introduction of a group litigation mechanism. Both solutions were intended to encourage individuals to enforce their rights in courts. Yet they were unable to respond to the numerous limitations facing private actions, such as restricted access to proofs, difficulties with assessing the case and calculating damages, and high costs of private proceedings. As the practice of competition law enforcement in Poland has shown, the number of private actions remained very low in the last decade, and numerous individuals injured by antitrust infringements were left without due compensation. Finally, one of the NCA’s most important goals of the last decade – educating individuals on private enforcement methods – was not achieved. According to the UOKiK competition policy for 2014–2018, consumers’ and enterprises’ knowledge on private enforcement is limited. Information campaigns are thus necessary in order to inform the public on possible protective measures against anti-competitive behaviors75. It is fair to say therefore that despite important changes introduced at the European and national level, the private enforcement doctrine was not able to reach its Polish addresses. It can also be stated that the current convergence method of the Polish competition law system towards the European model did not lead to satisfactory results in the area of private enforcement. While public enforcement has gradually strengthened its position in the course of the last decade, private enforcement struggles to complement it. This can, of course, be explained by the failure of the UOKiK’s competition policy, limited activity of the Polish legislator, and the lack of the so-called ‘litigation culture’ among Polish citizens. Still, the analysis of private antitrust enforcement in Europe confirms
75 Polityka konkurencji na lata 2014-2018…, p. 76.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 73 that Poland is not an isolated case. According to current statistics, the number of private actions brought by individuals injured by anti-competitive behaviors before national courts is still far from satisfactory76. Between 2006 and 2012, only 28% of the EC’s final infringements decisions, including cartels, were followed by damages claims. Moreover, a great majority of private antitrust cases takes place in a few MS only77, causing an undesirable imbalance in the protection of EU citizens against competition law infringements among MS. The astonishing diversity and underdevelopment in the area of private antitrust enforcement in Europe persists. As the Polish example illustrates, a lot has to be done in order to improve this situation. Addressing one of the questions posed in the introduction to this paper, it has to be said that the recent convergence of the national competition law system towards the European model did not guarantee the establishment of an effective, public-private system of antitrust enforcement. First, the proposed method of such convergence, based on CJEU jurisprudence and soft laws issued by the Commission, did not lead to the introduction of effective mechanisms of private enforcement at the national level. Second, it created a risk of incoherent solutions being used in different jurisdictions, and an unequal level of protection given to EU citizens against anti-competitive behaviors across MS. Finally, the solutions proposed by the EC, even if introduced at the national level, did not ensure an increase in the efficiency of the private method. As the Polish example of group litigation shows, the adoption of an innovative legal mechanism did not result in the increase in the number of private antitrust actions. It may thus be claimed that the adoption of a Directive on Damages Action may be regarded as a step forward in the development of the private enforcement doctrine. Clearly, it is too early yet to evaluate its final outcome because of the need to transpose the directive into the national legal orders of all MS. However, the initial analysis of its provisions, as well as the character of the proposed legislative method, make it possible to say that the current shortcomings of the private enforcement doctrine in the area of Polish and European competition law may be finally resolved.
76 See Commission Staff Working Document Impact Assessment Report Damages action for breach of EU antitrust rules accompanying the proposal for a Directive of the European Parliament and of the Council 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, SWD(2013) 203 final, paras. 52-53. 77 According to the aforementioned report, the vast majority of antitrust damages actions were initiated in 3 European jurisdictions: the UK, Germany and the Netherlands.
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IV. ‘Private enforcement package’ – towards more effective protection of individuals against anti-competitive behaviors
The EC’s latest proposal in the area of private enforcement consists of several legal instruments meant to provide an effective response to the limited efficiency of private actions. Most of the proposed solutions were well known in Europe already, since they were widely debated in the course of the last decade. However, the EC proposing to use a directive as the main legal instrument in this area constituted an important novum here. As such, the earlier soft law approach was replaced by a directive, aiming to harmonize national rules on damages claims and establish a common European private actions mechanism. While such attempt is to be welcomed, the question remains whether it ensures the establishment of an effective instrument of private enforcement in Europe?
1. General description
The EC’s proposal, published in June 2013, comprised several documents including, most importantly: – Proposal for a directive on certain rules governing actions for damages under national law for infringements of the competition law provisions of the MS and of the EU (hereafter, Directive); – Communication and Practical Guide on quantifying harm in actions for damages based on breaches of Article 101 or 102 of the TFUE78 (hereafter, Communication and Practical Guide); – Recommendation on common principles for injunctive and compensatory collective redress mechanisms in the MS concerning violations of rights granted under Union Law79 (hereafter, Recommendation). Despite the fact that the character of the proposed documents differs (binding and non-binding solutions), some authors argue that together they form a sort of ‘private enforcement package’, providing a comprehensive and complementary
78 Communication from the Commission on quantifying harm in actions for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union, C(2013) 3440, 11.6.2013; Commission Staff Working Document – Practical Guide on Quantifying Harm in Actions for damages based on breaches of Article 101 or 102 of the Treaty on the Functioning of the European Union, SWD(2013) 205, 11.6.2013. 79 Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law, OJ [2013] L 201/60.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 75 approach to the issue of private enforcement80. What should also be emphasized is that the Communication, Practical Guide and Recommendation seem to continue earlier Commission practice of proposing soft law mechanisms in the area of private enforcement. By contrast, the Directive constitutes an important novum in this context. Thanks to its binding power, it aims to ensure greater coherence and to overcome the diversity of national solutions81. Apart from this goal, the Directive aims also to achieve two other objectives: ensure optimal interaction between public and private enforcement, and guarantee that victims of antirust infringements will be able to obtain full compensation for the harm that they had suffered. Due to these far-reaching goals and the proposed legislative method, the ‘private enforcement package’ is regarded by many as an important step in bringing a new quality to the European debate on damages actions in the area of antitrust law82. Undoubtedly, it would be premature to attempt to evaluate it at this stage. The Directive was actually only adopted by the Council on 10 November 2014, and entered into force on 26 November 2014. Before the Directive can be fully evaluated, it must first be transposed into the national legal orders of the MS and then actually applied by individuals. However, it is fair to say already that an important step in the area of private antitrust enforcement has been taken in Europe and doors have been opened for better protection of individuals against antitrust infringements.
2. Specific elements
It can be noted referring to the specific elements of the ‘private enforcement package’ that they are construed with a view of achieving two main objectives: increasing efficiency of the private method and guaranteeing an appropriate balance between public and private enforcement. Although these goals may be often difficult to reconcile83, the EC proposes several solutions that might ensure their mutual attainment.
80 A. Piszcz, ‘Pakiet’ Komisji Europejskiej dotyczący powództw o odszkodowanie z tytułu naruszenia unijnych reguł konkurencji oraz zbiorowego dochodzenia roszczeń’ (2013) 5(2) iKAR 54. 81 R. Gamble, ‘Whether neap or spring, the tide turns for private enforcement: the EU proposal for a Directive on damages examined’ (2013) 34(12) ECLR 612. 82 S. Wisking, K. Dietzel, ‘European Commission finally publishes measures to facilitate competition law private actions in the European Union’ (2014) 35(4) ECLR 193; R.H. Lande, ‘The Proposed Damages Legislation – Don’t Believe the Critics’ (2014) 5(3) Journal of Competition Law & Practice; R. Gamble, ‘Whether neap or spring…’, p. 619. 83 A. Schwab, ‘Finding the Right Balance – the Deliberations of the European Parliament on the Draft Legislation Regarding Damage Claims’ (2014) 5(2) Journal of European Competition Law & Practice 65–67.
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First, the EC argues in favour of increased access to evidence concerning antirust infringements. In order to overcome ‘information asymmetry’ between injured individuals and accused undertakings, the Commission proposes a set of provisions that allow wider access to proofs of violations. According to Article 5 of the Directive, an individual injured by a competition law infringement and claiming the resulting damages may, upon a reasonably justified demand, be granted by the court hearing the case access to evidence being in the possession of a defendant or a third party. In order to avoid excess, such disclosure shall be limited by the principle of proportionality requiring, inter alia, that disclosure of evidence is limited to specific types of documents and does not lead to the discovery of confidential information. The aforementioned change constitutes an important novum in the current construction of private enforcement in Europe. By broadening access to proofs of antitrust violations, it significantly increases the chances for a positive outcome of private claims. It also responds to the need, already recognized in the White Paper, stating that: ‘it is essential to overcome this structural information asymmetry and to improve victims’ access to relevant evidence’84. Although the above change aims to increase the efficiency of private actions, it is also clear that the EC tries to preserve an appropriate balance between the public and the private method. In the following provisions (Article 6 & 7), the Directive argues in favour of absolute or temporary protection of certain categories of documents. Accordingly, leniency statements and settlement submissions shall be completely excluded from the possibility of disclosure. Documents prepared by the parties for the purpose of competition proceedings or those drawn up by competition authorities may be disclosed only after the termination of the proceedings. The second group of solutions proposed in the Directive refers to the relationship between private actions and public proceedings. They concern the binding force of decisions issued by competition authorities. Article 9 of the Directive stipulates that a final decision of a NCA declaring the existence of an anti-competitive behavior shall be binding upon a court deciding on damages, and shall constitute proof of an antitrust violation. In the opinion of the EC: ‘the possibility for the infringing undertaking to re-litigate the same issues in subsequent damages actions would be inefficient, cause legal uncertainty and lead to unnecessary costs for all parties involved and for the judiciary’85. A similar approach to the relationship between private and public proceedings seems also to result from the text of the Recommendation. They
84 White paper on damages actions for breach of the EC antitrust rules {SEC(2008) 404} {SEC(2008) 405} {SEC(2008) 406} /* COM/2008/0165 final */. 85 Proposal for a directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 77 states (point 33) that in these areas of law where a public authority may render a decision on a legal violation, collective proceedings shall not conflict with public proceedings concerning the same infringement. In order to achieve this objective, the Recommendation foresees a general prohibition to initiate a collective action if a public authority is already dealing with the case. If the collective action was initiated prior to the initiation of public proceedings, the EC argues in favour of giving the court the possibility to stay the civil proceedings until the case is finally resolved by the public authority. The approach of the EC should be supported. On the one hand, it ensures greater coherence between public and private proceedings. On the other, it increases the chances for a positive outcome of follow-on actions. Moreover, as some authors claim, it brings greater clarity to the discussed matter which, especially in Poland, was for a long time the subject of inconsistent jurisprudence and uncertainty on the side of individuals imitating private actions86. Finally, the Directive refers to such issues as limitation periods, the passing-on of overcharges, and the quantification of harm. While they do not directly refer to the relationship between public and private enforcement, they are crucial for the efficiency of private actions. The EC’s proposals should be supported also for aiming to extend the time in which private claims can be submitted (Article 10); giving indirect purchasers the right to sue for damages (Article 12-15); and facilitating rules on proving and quantifying antitrust harm (Article 17). These provisions broaden the scope of possible damages claims, provide greater flexibility to courts determining the existence of an antitrust injury, and finally facilitate the process of assessing harm. They may therefore positively influence the private enforcement process and lead to an increase in the importance of antitrust damages claims in Europe.
3. Evaluation attempt
When evaluating the Directive, as well as other elements of the ‘private enforcement package’, it seems at first sight that they constitute an important step in the development of the European private enforcement doctrine. The expectation is justified that a coherent approach to the issue of private antitrust enforcement may be finally established in Europe because of the scope of the proposed changes, the goals pursued by the Commission, and the applied legislative method (directive). Many authors stress however that provisions of the Member States and of the European Union, COM(2013) 404, 11.6.2013, para. 4.3.1. 86 A. Piszcz, ‘Pakiet’ Komisji Europejskiej…’, s. 60.
VOL. 2015, 8(11) 78 MACIEJ GAC the European discussion on private enforcement is far from being over87. The adoption of the Directive will greatly foster the debate, but it is unlikely to bring it to an end. First, according to many, the implementation process of the Directive may be a really difficult and complex task, requiring the reconciliation of the EC’s proposal with different national legal traditions88. Problems in Poland might surround the Directive’s rules on the disclosure of evidence. These will oblige the national legislator to introduce several exemptions (e.g. proportionality test) to current general disclosure rules stipulated in the Polish Code of Civil Procedure. Furthermore, solutions such as the rebuttable presumption of harm caused by an antitrust infringement, or possibility to estimate the size of the harm by a court, will require significant changes in Poland’s traditional approach to the issue of damage and its assessment. For those reasons, some authors highlight that the transposition process may lead to the limitation of the efficiency of the proposed private enforcement mechanism. This may happen if the solutions included in the Directive prove too difficult to reconcile with the legal traditions of different MS. In the opinion of A. Piszcz, such situation often occurs when the EU tries to harmonize these areas of law, which involve procedural rules formulated differently in national legal systems89. The second problem concerns the scope of the Directive, which is said to leave several questions unanswered90. Commentators list here issues such as: causation, remoteness and quantification of consequential loss, which were not codified in the damages package. By leaving these matters to be determined by national laws, the Directive risks the creation of varying approaches to these issues. This may in turn lead to legal uncertainty in cases of cross-border litigation and, as a result, limited efficiency of the private enforcement method. The last problem refers to the Commission’s attempt to reconcile two objectives within one Directive: increased efficiency of private enforcement and an appropriate balance between the public and the private method. As previously mentioned, while both aims seem crucial from the perspective of the entirety of the competition law enforcement system, their parallel attainment may be sometimes hard to achieve. This is especially so with respect to access to leniency materials. While specific solutions are proposed in order to preserve the public enforcement mechanism, their practical application may jeopardize the efficiency of the private method. Comments are made
87 R.H. Lande, ‘The Proposed Damages Legislation…’, p. 123–124; A. Howard, ‘Too little, too late? The European Commission’s Legislative Proposals on Anti-Trust Damages Actions’ (2013) 4(6) Journal of European Competition Law & Practice 463–464. 88 A. Piszcz, ‘Pakiet’ Komisji Europejskiej…’, p. 67. 89 Ibidem, p. 67. 90 A. Howard, ‘Too little, too late…’, p. 464.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 79 therefore that a more flexible approach should have been adopted in order to reconcile public enforcement policy with the CJEU’s jurisprudence on access to leniency materials. This could comprise of a possibility to disclose leniency documents after the termination of public proceedings, combined with a residual liability of leniency recipients91. Undoubtedly, this is merely one of the possible solutions, but it already shows that a risk of tension between public and private enforcement may still appear, and may require the EC to reconsider its current standpoint. Finally, it shall be stressed that the Commission’s decision to use a soft- law instrument in the area of group litigation is rather disappointing. The proposed legislative method seems to provide an only partial response to the current problems of private enforcement. Due to its non-binding nature and strong dependence on MSs’ will, this approach has limited chances of success. Moreover, the character of the solutions proposed by the Commission (e.g. opt-in mechanism, limitation of standing to sue to representative bodies, exclusion of contingency fees) seems to be more preservative than the instruments already developed in many national legal orders. It may thus be stated that the EC’s proposal on group litigation constitutes more of a step back than a step forward towards the introduction of effective European mechanism of collective redress. It also fails to provide an appropriate answer to the current discussion on collective actions in antitrust cases.
IV. Conclusion
It can be said in summary that current Polish and European experiences on private antitrust enforcement illustrate that the European debate of the last decade did not lead to the actual increase in the protection of individuals against competition law infringements. Solutions developed by the CJEU and the Commission were not able to reach its addresses at the national level. As a result, an effective system of private enforcement has not been established in Europe for two main reasons. On the one hand, the failure resulted from the proposed method of convergence (soft laws). On the other, it was a consequence of the limited activity of the Polish legislator and the NCA in developing more effective mechanisms of private enforcement. As such, despite the fact that 13 years have gone by since the Courage judgment, the principle of full compensation in the case of antitrust infringements still
91 C. Cauffman, ‘The European Commission Proposal for a Directive on Antitrust Damages: A first Assessment’ (2013) 13 Maastricht European Private Law Institute Working Paper, p. 15–16, available at: http://ssrn.com/abstract=2339938.
VOL. 2015, 8(11) 80 MACIEJ GAC struggles to find its practical significance in Poland. Looking at this issue from the European perspective, it is necessary to state that the underdevelopment and diversity of national solutions on private enforcement, already identified by the Ashurst Report, is still present. Moreover, this state of affairs causes important limitations to equal and effective protection of European citizens against anti-competitive behaviors across MS. Nevertheless, this negative assessment of the European private enforcement doctrine may finally change, provided the Directive on Damages Actions is finally implemented and applied in practice. Despite its several limitations, it creates a chance for the introduction of a universal private enforcement mechanism, something that has long since been overlooked in the European debate on private antitrust enforcement. Its introduction may also greatly increase the chances for victims of antitrust infringements not only to obtain a protective measure, but also a strong incentive to participate in antitrust enforcement. Thanks to the Directive, the missing link between the European doctrine and national practice of antitrust enforcement may thus finally be established and lead to an increase in the protection of individuals against anti-competitive behaviors.
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YEARBOOK OF ANTITRUST AND REGULATORY STUDIES INDIVIDUALS AND THE ENFORCEMENT OF COMPETITION LAW… 81
Gac M., ‘Public versus private enforcement of European competition law – the evolution of case-law on access to leniency materials after Pfleiderer judgment’ [in:] Dobosz K., Scheibe M., Nowak K. (eds.), In short but to the point – comments on EU law, Kraków 2013. Gamble R., ‘Whether neap or spring, the tide turns for private enforcement: the EU proposal for a Directive on damages examined’ (2013) 34(12) ECLR. Goddin G., ‘The Pfleiderer Judgment on Transparency: The National Sequel of the Access to Document Saga’ (2012) 3(1) Journal of European Competition Law & Practice. Hansberry-Biegunska D., ‘Poland’ [in:] Gotts I. K. (ed.), The Private Competition Enforcement Review, 4th ed., London 2011. Howard A., ‘Too little, too late? The European Commission’s Legislative Proposals on Anti-Trust Damages Actions’(2013) 4(6) Journal of European Competition Law & Practice. Huschelrath K., Peyer S., ‘Public and Private Enforcement of Competition Law – A Differentiated Approach’ (2013) 13-029 ZEW Discussion Paper. Jaworski T., Radzimierski P., Ustawa o dochodzeniu roszczeń w postępowaniu grupowym. Komentarz [Act on pursuing claims in group proceedings. Commentary], Warszawa 2010. Jurkowska A., ‘Roszczenia z tytułu naruszenia wspólnotowego prawa ochrony konkurencji przez podmioty prywatne – glosa do wyroku ETS z 13.07.2006 r. w połączonych sprawach: od C – 295 do 298/04 Manfredi’ [Claims of infringement of Community competition protection law by privateentities – commentary on ECJ judgment of 13 July 2006 in joined cases: C-295 to 298/04 Manfredi], (2009) 3 Europejski Przegląd Sądowy. Jurkowska A., Prywatnoprawne wdrażanie wspólnotowego prawa konkurencji [Private Enforcement of the Community Competition Law], Zeszyty CEN, z. 19, Warszawa 2004. Jurkowska-Gomułka A., Comparative competition law private enforcement and consumer redress in the EU 1999–2012, available at: http://www.clcpecreu.co.uk/pdf/final/ Poland%20report.pdf Jurkowska-Gomułka A., ‘Private Enforcement of Competition Law in Polish Courts: The Story of an (Almost) Lost Hope for Development’ (2013) 6(8) YARS. Jurkowska-Gomułka A., Publiczne i prywatne egzekwowanie zakazów praktyk ograniczających konkurencję [Public and private enforcement of prohibitions of anticompetitivepractices], Warszawa 2013. Komninos A., ‘The Road to the Commission’s White Paper for Damages Actions: Where We Came From’ (2008) 4(2) Competition Policy International. Krasnodębska-Tomkiel M., Szafrański D., ‘Skuteczność prawa antymonopolowego’ [Effectiveness of antitrust law] [in:] Giaro T. (ed.), Skuteczność prawa [Effectiveness of law], Warszawa 2010. Lande R. H., ‘The Proposed Damages Legislation – Don’t Believe the Critics’ (2014) 5(3) Journal of Competition Law & Practice. Milutinovic V., ‘Private enforcement – Upcoming issues’ [in:] Amato G. (ed.), EC Competition law: A critical assessment, Oxford 2007. Piszcz A., ‘Pakiet’ Komisji Europejskiej dotyczący powództw o odszkodowanie z tytułu naruszenia unijnych reguł konkurencji oraz zbiorowego dochodzenia roszczeń’ [Commission“package” on actions for damagesbased on EU competition law infringements and collectiveredress] (2013) 5(2) iKAR. Piszcz A., ‘Still-unpopular Sanctions: Developments in Private Antitrust Enforcement in Poland after 2008 White Paper’ (2012) 5(7) YARS.
VOL. 2015, 8(11) 82 MACIEJ GAC
Podrecki P., Porozumienia monopolistyczne i ich cywilnoprawne skutki [Monopolistic agreements and their civil effects], Kraków 2000. Schwab A., ‘Finding the Right Balance – the Deliberations of the European Parliament on the Draft Legislation Regarding Damage Claims’ (2014) 5(2) Journal of European Competition Law & Practice. Sieradzka M., Ustawa o dochodzeniu roszczeń w postępowaniu grupowym. Komentarz [Act on pursuing claims in group proceedings. Commentary], Warszawa 2010. Stefanicki R., Prywatnoprawne środki dochodzenia roszczeń z tytułu naruszenia reguł konkurencji [Private means of redress in case of competition law infringements], Warszawa 2014. Vallery A., ‘Otis: Can the Commission be a Victim in Addition to Acting as a Police Officer, a Prosecutor and a Judge?’ (2013) 4(3) Journal of Competition Law & Practice. Wisking S., Dietzel K., ‘European Commission finally publishes measures to facilitate competition law private actions in the European Union’ (2014) 35(4) ECLR.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Leniency – the Polish Programme and the ‘Semi-formal’ Harmonisation in the EU by the European Competition Network
by
Marcin Kulesza*
CONTENTS
I. Introduction II. The European origin of the Polish leniency programme III. The European Competition Network IV. Harmonisation of leniency programmes by the ECN V. Model Leniency Programme and the Polish leniency programme VI. Closing remarks
Abstract
When studying the legal character of the Polish leniency programme, one cannot overlook its origin and the harmonisation process of such programmes in the EU. From the beginning, the Polish programme has been, as it should be, bound to the EU programme and to the European Competition Network’s Model Leniency Programme. The paper briefly presents the European roots of the Polish leniency programme, its original convergence with the Commission’s programme and its current convergence with the Model Leniency Programme. In addition, the status of the Model Leniency Programme is analysed and questioned and its provisions are presented in the context of the evolution of Polish leniency. Some additions to the current Polish programme are suggested in conclusion.
* Marcin Kulesza, PhD candidate at the Interdisciplinary Doctoral Studies of the University of Social Sciences and Humanities (Szkoła Wyższa Psychologii Społecznej) in Warsaw and an associate at Wardyński & Partners in Warsaw; [email protected].
VOL. 2015, 8(11) 84 MARCIN KULESZA
Résumé
Lorsque nous étudions le caractère juridique de programme polonaisde clémence, nous ne pouvons pas ignorer ses origines ainsi que le processus d’harmonisation de ces programmes dans l’UE. Dès le début le programme polonais a été, comme il devrait être, lié au programme de l’UE et au programme de clémencemodèle du Réseau européen de la concurrence. Cet article présente brièvement les racines européennes de programme polonais de clémence, sa convergence initiale avec le programme de la Commission, et sa convergence actuelle avec le programme de clémencemodèle du Réseau européen de la concurrence. En outre, le statut du programme de clémencemodèle est analysé et remis en question. Ses dispositions sont présentées dans le contexte de l’évolution de la politique de clémence en Pologne. Certaines modifications de programme polonaisde clémence sont proposées en conclusion.
Classification and keywords: antitrust enforcement; European Competition Network; harmonisation; leniency; Model Leniency Programme; Poland.
I. Introduction
According to the official justification of the provisions setting forth the original Polish leniency programme of 2004 and to respective documents accompanying further amendments thereto, the Polish scheme is rooted in the programme operated by the European Commission and in the Model Leniency Programme (hereafter, MLP) based on the Commission Leniency Notice of 20021. It is thus interesting to take a look at the Polish programme’s origin in the context of the MLP. The above paragraph identifies both of the main issues studied in this paper. Presented first will be the official references to the sources of the Polish leniency programme, as noted in the justification of the provisions shaping its first version by its authors and its convergence with the MLP at a later stage. Following this, the background of the MLP will be reviewed and its unofficial character questioned. This leads to the conclusion that the Polish programme, ‘semi-formal’ by itself at a stage where it was clarified and detailed by non- binding guidelines of the Polish Competition Authority – the President of the Office for Competition and Consumer Protection (hereafter, UOKiK), has been shaped by another ‘semi-formal’ document – the MLP.
1 Commission notice of 19 February 2002 on immunity from fines and reduction of fines in cartel cases, OJ [2002] C 45/3; hereafter: 2002 Leniency Notice. See C. Gauer, M. Jaspers, ‘ECN Model Leniency Programme – a first step towards a harmonised leniency policy in the EU’ (2007) 1 Competition Policy Newsletter 36.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES LENIENCY – THE POLISH PROGRAMME AND THE ‘SEMI-FORMAL’… 85
The overview is based on the contents of the official justifications of national acts setting forth the leniency programme in Poland, and on the sources of inspiration indicated therein. This paper is not aimed at explaining the Polish leniency programme in detail. It focuses on its European roots and on its convergence with the MLP, with an important addition of the ‘semi-formal’ perspective of the European Competition Network (hereafter, ECN) and of the MLP itself. The issue of soft harmonisation in general is not discussed. It was the aim of this paper to place the review of the convergence of Polish leniency with the MLP in the context of the allegedly illegitimate harmonisation of leniency programmes across Europe, as carried out with this tool by the European Commission via the ECN. To do so, the paper is structured as follows. Following this Introduction, Section II will present the official sources of inspiration for the Polish leniency programme, as reflected in the official justification of the respective provisions, and its convergence with its declared original European inspiration. Section III will briefly describe the character of the legal basis of the functioning of the ECN. Section IV will present the MLP as an, in fact, informal means of harmonising leniency programmes in Europe. Finally, in Section V, the Polish leniency programme’s convergence with the MLP will be assessed. In the closing remarks, doubts will be summed up as to the formal character of the MLP in the context of the Polish scheme. Regardless of doubts, areas of the MLP will also be identified that should be implemented into the Polish scheme.
II. The European origin of the Polish leniency programme
The Polish leniency programme was introduced on 1 May 2004, at the time of Poland’s accession to the European Union and the entry into force of Regulation 1/20032. Until then, Poland had no leniency-type of solution in its legal system3. Article 89 of the Act of 15 December 2000 on Competition and Consumer Protection4 (repealed by the Amendment Act of 20045) gave the UOKiK President a possibility to call upon an undertaking to plead guilty when
2 Council Regulation (EC) NO. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ [2003] L 1/1. 3 B. Turno, Leniency. Program łagodzenia kar pieniężnych w polskim prawie ochrony konkurencji, Warszawa 2013, p. 361. 4 Act of 15 December 2000 on Competition and Consumer Protection (consolidated text: Journal of Laws 2003 No. 86, item 804, as amended); hereafter, 2000 Competition Act. 5 Act of 16 April 2004 on the Amendment to the Act on Competition and Consumers Protection and to Certain Other Acts (Journal of Laws 2004 No. 93, item 891); hereafter, 2004 Amendment.
VOL. 2015, 8(11) 86 MARCIN KULESZA an investigation’s evidence and previous case law led the National Competition Authority (hereafter: NCA) to find that the infringement was indisputable. In such cases, the UOKiK President did not impose a fine on the entrepreneur. However, this provision was applicable only in cases of minor importance for the protection of competition and consumers [Article 89(1)]. It explicitly excluded horizontal agreements (cartels), dominant entities holding market share exceeding 80% and repeated offenders, that is, entrepreneurs found in breach of the prohibition of competition restricting agreements within 3 years preceding the institution of the investigation [Article 89(3)]. It follows from the above that the rules of Article 89 could not have been deemed a leniency programme6 since they lacked the element of ‘willingness’ on the part of the investigated undertaking to come forward on its own will. Indeed, one could plead guilty only when summoned by the UOKiK President to do so. Voluntary cooperation of an undertaking with the NCA, as a basis for a fine reduction or waiver in antitrust proceedings first appeared in Poland in the form of a leniency programme by means of the 2004 Amendment7 to the 2000 Competition Act. According to the justification of the draft of the 2004 Amendment8, it was supposed to implement rules ‘analogous to the so-called leniency programme introduced on the basis of the Commission Notice of 13 February 2002 on immunity from fines and reduction of fines in cartel cases’. Similarly, the latest draft of a recent amendment to the current Act on Competition and Consumers Protection of 16 February 2007 emphasised the influence exercised on Polish leniency by EU law, by the provisions of other jurisdictions and, most of all, by the ECN Model Leniency Programme9. It must be stressed, however, that Polish provisions have not constituted a direct reception of EU solutions – some, both minor and major, differences between the Polish leniency programme and its European model can be identified10. Minor discrepancies related to, for example, the approach to the reduction of fines. In the model adopted by the Commission in its 2002 Leniency Notice, the reduced penalty was calculated on the basis of the fine which would otherwise have been imposed. Depending on the order in which the
6 B. Turno, Leniency…, p. 361. 7 Article 1 item 50 of the 2004 Amendment. 8 The print of the Sejm (IV term) no. 2561, p. 38 (p. 4 of the justification). 9 The print of the Sejm (VI term) no. 1703, p. 70 (p. 30 of the justification). The print contains the draft amendment to the currently binding Act of 16 February 2007 on Competition and Consumers Protection (consolidate text: Journal of Laws of 2015 item 184); hereafter, 2007 Competition Act. The Act of 10 June 2014 on the Amendment of the Act on Competition and Consumers Protection and of the Act – the Civil Code was finally published in the Polish Official Journal of 2014 item 945 on 17 July 2014; hereafter, 2014 Amendment. 10 See also B. Turno, Leniency…, p. 361.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES LENIENCY – THE POLISH PROGRAMME AND THE ‘SEMI-FORMAL’… 87 undertakings submitted their respective evidence, and on the added value of such evidence, the Commission could reduce the possible fine by 30–50%, 20–30% or up to 20% (point 23 of the 2002 Leniency Notice). The same approach to fine reductions applies in the new Commission Leniency Notice of 200611. By contrast, the fine reduction was set in Poland to be calculated on the basis of an undertaking’s turnover, with no reference to the fine that would otherwise have been imposed. Thus, leniency applicants would benefit in Poland from a reduction of the maximum level of the fine, that is, a reduction from 10% of the turnover achieved in the year preceding the imposition of the fine to up to 5%, 7% or 8% of their turnover, depending on the order of respective leniency motions (Article 103a(3) of the 2000 Competition Act, as amended in 2004). There is also a major difference between EU and Polish leniency. The Commission’s programmes have always explicitly applied to illegal horizontal agreements only, that is, to ‘secret cartels’12. Polish leniency applies, from the moment of its inception, to all types of prohibited anti-competitive agreements (prohibited by Article 5 item 1 of the 2000 Competition Act, by Article 6(1) 1 of the 2007 Competition Act or by Article 101 TFEU13). It is fair to say that this fundamental difference may have its roots in a simple misunderstanding, although it has been kept consequently in place and has spread to other solutions such as commitments. A brochure published in 2004 by the UOKiK President to accompany the 2004 Amendment to the 2000 Competition Act contained a glossary which defined cartels as ‘agreements of undertakings that restrict competition’14. There was no indication in any official documents (such as the draft’s justification) that a wider policy had been intentionally considered in Poland, one that would cover all prohibited agreements rather than just horizontal cartels. It therefore appears that the NCA could have relied on this incorrect (overly wide) definition of the term ‘cartel’ while drafting the 2004 Amendment. Nevertheless, it is obvious that the Polish leniency programme has been modelled, or at least inspired by the schemes of the European Union. This realisation has been strengthened recently by direct reference not only to
11 Commission Notice of 8 December 2006 on Immunity from fines and reduction of fines in cartel cases, OJ [2006] C 298/17; hereafter: 2006 Leniency Notice, para. 26. 12 Point 1 of the 2002 Leniency Notice; see also para. 1, sentence 2 of the 2006 Leniency Notice and para. 1 of the Commission notice of 18 July 1996 on the non-imposition or reduction of fines in cartel cases, OJ [1996] C 207/4. 13 See also B. Turno, Leniency…, p. 459, or M. Król-Bogomilska, ‘Program łagodzenia kar (leniency) w polskim prawie antymonopolowym – po pięciu latach obowiązywania ustawy’ (2012) 4 Europejski Przegląd Sądowy 6; the same difference is noticeable also as regards to commitment decisions in the Polish competition law. 14 Leniency, Office of Competition and Consumers Protection, Warszawa 2004, p. 3.
VOL. 2015, 8(11) 88 MARCIN KULESZA the Commission’s programmes, but also to the MLP. It is noteworthy that the justification of the recent revision of the 2007 Competition Act did not refer to any case law (European or Polish) with respect to leniency. From the beginning, the justifications of the respective draft acts referred directly only to the Commission’s Leniency Notices and to the MLP. The harmonisation of the leniency programmes across Europe, carried out by the ECN via its MLP, will be presented later in this paper. The MLP forms a clear background for the newly developed provisions governing the Polish scheme. The MLP, as a harmonisation tool, should thus be subject to a closer analysis.
III. The European Competition Network
Like the Polish membership in the EU, the Polish leniency programme and the overall reform of EU competition law, the European Competition Network’s birthday falls – formally – on 1 May 2004; its legal basis can be found in Articles 101 and 102 TFEU and Articles 11-13 of Regulation 1/2003. However, a network of competition authorities of the EU and of its Member States emerged, in fact, already in 2002 but in a less formal and less binding manner. The ECN was created by the Joint Statement of the Council and the Commission on the functioning of the network of Competition Authorities, issued concurrently with the adoption of Regulation 1/200315. The Joint Statement expressly stated that it was a strictly political act, creating no legal rights or obligations (para. 3 of the Joint Statement). Its aim was ‘to ensure that the Community competition rules are applied effectively and consistently’ in the legal environment shaped by the newly adopted Regulation 1/2003 (para. 1 and 2 of the Joint Statement). The Council and the Commission made a reservation in points 3 and 4 of the Joint Statement noting that it was limited to setting out the political understanding of the Member States and the Commission on the general principles of the ECN’s functioning, and that further details were to be set out in a separate Commission notice16. The relevant notice was issued on 27 April 200417. The Cooperation Notice contains the rules on functioning and
15 Adopted on 10 December 2002, doc. no. 15435/01 ADD 1, English language version available at: http://ec.europa.eu/competition/ecn/joint_statement_en.pdf; hereafter, Joint Statement. 16 See also recital 15 of Regulation 1/2003. 17 Commission Notice on cooperation within the Network of Competition Authorities, OJ [2004] C 101/43; hereafter: the Cooperation Notice.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES LENIENCY – THE POLISH PROGRAMME AND THE ‘SEMI-FORMAL’… 89 on the procedures of cooperation and information exchange applied within the network. It is worth noting that Articles 11–13 of Regulation 1/2003 formally serve as a legal basis only for cooperation and coordination of actions of the competition authorities of the EU (the Commission) and of its Member States in order to apply Articles 101 TFEU and 102 TFEU. Apart from this general basis, all the remaining rules governing the ECN are contained in documents which remain outside the catalogue of legally binding acts of the EU – the Joint Statement and the Cooperation Notice. The fact that the rules on functioning of the ECN are defined in Regulation 1/2003, in the Joint Statement drafted primarily by the Commission and – specifically – in the Cooperation Notices, justifies a conclusion that the ECN had been designed by the Commission18. In addition, the Commission enjoys a managerial position within the ECN, strengthened by its monopoly as to the design of EU competition policy19. In addition, the ECN’s activities are not subject to any external control, judicial in particular20. It should be noted, however, that from the Polish perspective, jurisprudence and literature seem to share the view that if the UOKiK President fails to observe the obligation to notify a draft decision to the Commission on the basis of Article 11(4) of Regulation 1/2003, such a decision is defective. Such a defective decision is inapplicable and cannot be validated by the court, which should annul it. Thus, an element of judicial control of the procedures under Regulation 1/2003 can be identified at the national level at least21. As mentioned, the ECN’s objectives are: (i) uniform and consistent, as well as (ii) effective application of EU competition rules by increasing
18 K. J. Cseres, ‘Questions of Legitimacy in the Europeanization of Competition Law Procedures of the EU Member States’ (2013) 2 Amsterdam Centre for European Law and Governance Working Paper 25. 19 F. Cengiz, ‘The European Competition Network: Structure, Management and Initial Experiences of Policy Enforcement’ (2009) 5 European University Institute, Max Weber Programme Working Paper, p. 10, 12 and 13. 20 K. Kowalik-Bańczyk, Prawo do obrony w unijnych postępowaniach antymonopolowych. W kierunku unifikacji standardów proceduralnych w Unii Europejskiej, Warszawa 2012, p. 509–510, and the case law quoted therein, in particular the General Court judgement in case T-340/03 France Télécom v Commission, ECR [2007] II-107. 21 See D. Miąsik [in:] T. Skoczny, D. Miąsik, A. Jurkowska (eds.), Ustawa o ochronie konkurencji i konsumentów, Warszawa 2009, p. 316, and the Polish Supreme Court judgement in case III SK 67/12 ((2014) 5 OSNAPiUS, p. 271, first review by M. Kulesza, ‘Ważna zmiana w orzecznictwie SN – sądy mogą badać naruszenia procedury przez Prezesa UOKiK’ (2013) 21.11 Co do zasady; D. Aziewicz, ‘Naruszenie obowiązków proceduralnych przez Prezesa Urzędu Ochrony Konkurencji i Konsumentów. Wyrok Sądu Najwyższego z dnia 3 października 2013 r., III SK 67/12 PKP Cargo’ (2014) 1(3) iKAR.
VOL. 2015, 8(11) 90 MARCIN KULESZA participation of NCAs in their application – within the duty to cooperate – and by coordination of the NCAs’ activities22. The ECN is formed by NCAs and by the Commission to act ‘in the public interest and cooperate closely in order to protect competition. The network is a forum for discussion and cooperation in the application and enforcement of EC competition policy. It provides a framework for the cooperation of European competition authorities in cases where Articles 81 and 82 of the Treaty are applied and is the basis for the creation and maintenance of a common competition culture in Europe’ (para. 1 of the Cooperation Notice)23. As Ms Petra Krenz of the European Commission explained in her speech during the Third GCLC Decentralised Lunch Talk held at the Polish Competition Authority on 9 May 2014, the ECN is based on four building blocks: (i) one set of substantive rules on the application of Articles 101 and 102 TFEU; (ii) pragmatic system of work sharing; (iii) assistance in fact finding and exchange of confidential information; and (iv) a case review system. Ms Krenz stressed also that the formal consultation mechanisms of Regulation 1/2003 are not the only tool to facilitate a dynamic development of close cooperation within the ECN. The same goal is also achieved by informal dialogue. These building blocks do not seem to leave space for the harmonisation of Member States’ provisions. In fact, although the ECN was originally designed to serve as a policy enforcer, a point of case allocation and information sharing, it ultimately appears to act as a policy maker – a platform for coordination of procedural problems and a discussion forum for specific issues24.
V. Harmonisation of leniency programmes by the ECN
The Commission-designed ECN serves as a platform of harmonisation agreed by the Commission and the NCAs25.The ECN itself refers to its activities
22 See also recitals 5 and 6 of Regulation 1/2003. 23 See C. Gauer, M. Jaspers, ‘The European Competition Network Achievements and challenges – a case in point: leniency’ (2006) 1 Competition Policy Newsletter 8, who refer to fostering ‘a common competition culture beyond the coherent application of EC competition law’ in the context of the ECN’s exercises in the field of leniency; see also K. Kowalik-Bańczyk, Prawo do obrony…, p. 511. 24 K. J. Cseres, ‘Questions of Legitimacy…’, p. 25; G. Monti, ‘Independence, Interdependence and Legitimacy: The EU Commission, National Competition Authorities, and the European Competition Network’ (2014) 1 EUI Department of Law Research Paper 17. 25 K. J. Cseres, ‘Questions of Legitimacy…’, p. 25.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES LENIENCY – THE POLISH PROGRAMME AND THE ‘SEMI-FORMAL’… 91 related to harmonisation of leniency programmes as ‘convergence’26or, explicitly, as ‘harmonisation’27. Out of the four methods of integration of the legal systems of EU Member States, including mutual recognition, coordination (by directives), harmonisation (by directives) and unification (or substitution), the latter plays the leading role here and is the basic method used in the field of competition law and policy28. From the perspective of the application of Articles 101 and 102 TFUE, Regulation 1/2003 serves as the main means of integration. Regulation 1/2003 started the decentralisation of the application of EU competition law – the NCAs apply the provisions of EU competition law directly. At the same time, according to the principle of procedural autonomy, they apply Articles 101 and 102 TFEU with the use of national procedural rules29. The other method of integration used in competition law is harmonisation. However, legislative harmonisation does not function in the EU with respect to competition laws. There have only ever been four directives in force, none of them concerning restrictive practices. Rules of competition law may also be harmonised by jurisprudence. If certain conduct may have an effect on trade between Member States, national courts are obliged to apply Articles 101 and 102 TFEU. Moreover, they are entitled to converge their judicial practice by raising preliminary questions to the Court of Justice of the European Union (hereafter: CJEU). On several occasions, the CJEU expressed the opinion that the provisions of EU law must be applied by national authorities in a way facilitating their effectiveness and uniformity; it is also possible that the CJEU directly orders national provisions to be amended in accordance with EU rules30. The CJEU indicated also difficulties in the application of Article 101 TFEU in accordance with national
26 Petra Krenz’s speech at the Third GCLC Decentralised Lunch Talk held at the Polish Competition Authority on 9 May 2014. 27 See for example the Commission’s memo of 29 September 2009 Competition: the European Competition Network launches a Model Leniency Programme – frequently asked questions, MEMO/06/356, available at: http://europa.eu/rapid/press-release_MEMO-06-356_ en.htm, or the memo of 2012, Competition: European Competition Network refines its Model Leniency Programme – Frequently asked questions, available at: http://ec.europa.eu/competition/ ecn/mlp_2012_faq_en.pdf. 28 Z. Brodecki, I. Zużewicz, ‘Zagadnienia ogólne’ [in:] Z. Brodecki (ed.), Konkurencja, Warszawa 2004, p. 104–105. 29 K. Kowalik-Bańczyk, Prawo do obrony…, p. 547. 30 Ibidem, pp. 555–556, and the judgements of the Court quoted therein: C-375/09 Prez es Urzędu Ochrony Konkurencji i Konsumentów v Tele2 Po lska sp. z o.o., now Netia SA, ECR [2011] I-3055, C-360/09 Pfleid erer AG v Bu ndeskartellamt, ECR [2011] I-5161, C-17/10 Toshiba Corporation e.a v Úřad pro ochranuhospodářskésoutěže, ECLI:EU:C:2012:72, and C-439/08 Vlaamsef edera tie van verenigingen van Brood- en Banketbakkers, Ijsbereiders en Chocoladebewerkers (VEBIC) VZW, ECR [2010] I-12471.
VOL. 2015, 8(11) 92 MARCIN KULESZA procedural rules31. On the other hand, even in cases in which Articles 101 or 102 TFEU are not applicable, EU law and jurisprudence may serve as ‘intellectual inspiration’ for the interpretation of common rules32. According to the Polish Supreme Court, interpretation of provisions eliminating substantial procedural discrepancies in the application of EU and national laws is required33. In fact, competition law is harmonised across the EU in a very soft and spontaneous manner. As noted by the Commission, ‘the entry into force of Regulation 1/2003 has generated an unprecedented degree of voluntary convergence of the procedural rules dedicated to the implementation of Articles [101 and 102 TFEU]’34. On one hand, such voluntary convergence (or spontaneous harmonisation35) leads to similarities in both substantial and procedural laws. On the other hand, harmonisation causes an erosion of the principle of procedural autonomy. This is the case in the context of the MLP and of the convergence of national leniency procedures. The MLP is a perfect example of informal, spontaneous, soft36 but substantive37 harmonisation by means of a document that is political in nature38 and issued by a semi-formal body39. In addition, as there is no political will on the part of the Member States to harmonise procedural laws across the EU by means of EU law40, this approximation of laws takes place not at the level of the Member States but on the level of their NCAs gathered
31 See K. J. Cseres, ‘Questions of Legitimacy…’, p. 23, referring to the Court’s judgements in Tele2 Polska and VEBIC cases. 32 Judgement of the Polish Supreme Court of 9 August 2006, case III SK 6/06 (2008) 1–2 OSNP 2008, item 25. 33 Resolution of the Polish Supreme Court of 23 July 2008, case III CZP 52/08 (2009) 7–8 OSNC, item 107; (2009) 7-8 OSP, item 86; (2009) 2 Monitor Prawniczy 90; (2010) 5 Europejski Przegląd Sądowy 43. 34 Commission staff working paper accompanying the Communication from the Commission to the European Parliament and Council – Report on the functioning of Regulation 1/2003 {COM(2009)206 final}, SEC/2009/0574 final, para. 201; see also K. Kowalik-Bańczyk, Prawo do obrony..., p. 556–557. 35 K. Kowalik-Bańczyk, Prawo do obrony..., p. 556, and the literature quoted therein; see also B. Turno, Leniency..., p. 365. 36 See V. Juknevičiūtė, J. Capiau, ‘The state of ECN Leniency convergence’ (2010) 1 Competition Policy Newsletter 13; see also para. 26 of the opinion of Advocate General Mazák, delivered on 16 December 2010 in case C-360/09 Pfleiderer v Bundeskartellamt . 37 R. Polley, ‘Leniency in the ECN Framework of Parallell Competences” [in:] K. M. Meessen, M. Bungenberg, A. Puttler (eds.), Economic Law as an Economic Good: Its Rule Function and its Tool Function in the Competition of Systems, Munich 2009, p. 272. 38 See e.g. C. Gauer, M. Jaspers, ‘ECN Model Leniency Programme…’, p. 38. 39 In its judgement in case T-189/06 Arkema France v Commiss ion, ECR [2011] II-5455, para. 159, the General Court stressed that the MLP ‘was intended, in particular, to lead to the voluntary harmonisation of the leniency programmes applied by the members of the network’. 40 K. Kowalik-Bańczyk, Prawo do obrony…, p. 558.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES LENIENCY – THE POLISH PROGRAMME AND THE ‘SEMI-FORMAL’… 93 in the ECN, led by the Commission, who themselves view the MLP as a tool of ‘soft’ harmonisation41, the ‘first step towards a harmonised leniency policy throughout the EU’42. It must be stressed that the CJEU expressly stated in the Pfleiderer case that the MLP ‘has no binding effect on the court s and tribunals of the Member States’43. The MLP was issued on 22 September 2006. As mentioned, those that drafted the MLP stated that its purpose was ‘to provide a basis for soft harmonisation of the European [leniency] programmes’44. Their aim was to ‘ensure that potential leniency applicants are not discouraged from applying as a result of the discrepancies between the existing leniency programmes within the ECN’45, that is, to facilitate applying for leniency in the context of Article 101 TFEU in diversified legal environments of the EU and its Member States. The ECN addressed in the MLP the difficulties encountered by undertakings due to concurrent competences of the Commission and NCAs in the application of Article 101 TFUE46, the lack of a one-stop-shop rule in the EU with regard to leniency, and differences between the Members States’ approaches to the details of leniency programmes across Europe47. The ECN unified the scope and terms of application, contents of relevant motions and procedures regarding the enforcement of leniency. Thus, the MLP constitutes a collection of ‘the main substantive and procedural rules which the ECN members believe should be common in all programmes48. In its first version of 2006, the MLP set forth some common rules. It (i) unified the object of leniency motions (limited strictly to horizontal cartels) and entities eligible to benefit from this procedure (limited to non- ringleaders only); (ii) established what information must be included in a leniency motion and the main rules of cooperation between the applicant and the authority; (iii) set forth the rules on the submission of a leniency motion
41 The Commission’s memo of 29 September 2009 (MEMO/06/356; see footnote 28) above, p. 2. 42 Ibidem, p. 1. 43 Judgement of the Court in case C-360/09 Pfleiderer v Bundeskartellamt, ECR [2011] I-5161, para. 22; see also judgement in case C-536/11 Donau Chemie and Others, ECLI:EU:C:2013:366, para. 40 and footnote 25. 44 Commission’s memo of 29 September 2009 (MEMO/06/356; see footnote 28 above), p. 2; see also C. Gauer, M. Jaspers, ‘ECN Model Leniency Programme…’, p. 36. 45 The MLP, para. 2. 46 Ibidem. 47 B. Turno, Leniency…, p. 365; see also V. Juknevičiūtė, J. Capiau, ‘The state of ECN Leniency…’, p. 13–14. 48 Commission’s memo of 29 September 2009 (MEMO/06/356; see footnote 28 above), p. 1; see also C. Gauer, M. Jaspers, ‘CN Model Leniency Programme…’, p. 36, who stress that this distinguishes the MLP ‘from efforts undertaken in other international fora’.
VOL. 2015, 8(11) 94 MARCIN KULESZA and on subsequent procedures concerning the motion; and (iv) introduced marker and summary applications. The revision of the MLP of November 2012 was meant to clarify and simplify the requirements of leniency programmes. The revision extended the possibility of filing a summary application to applicants having or being in the process of filing a leniency application either for immunity (as in 2006 version) or for a fine reduction. In also introduced a standard template for summary applications. Moreover, the 2012 revision spelled out what conditions must applicants meet in order to qualify for leniency (in particular the duty to cooperate). It also clarified and, in fact, slightly extended the scope of leniency programmes by including cartels with vertical aspects (hub-and-spoke cartels). Thus, the current MLP provides for: (i) the uniform scope of leniency programmes (cartels, including hub-and-spoke cartels; para. 4 of the MLP); (ii) unification of conditions to qualify for immunity or fine reductions and of duties of applicants (scope of information to be provided, conditions of cessation of participation in the cartel, rules of full cooperation, requirement of non-coercing other undertaking to participate in the cartel; para. 5–13); (iii) general rules on approaching the authority and proceeding with an application (including marker system, granting immunity, fine reduction, statement and oral procedure; paras. 14–23 and 28–30); and (iv) summary applications, including a standardised template form, submitted by undertakings already having submitted or preparing a leniency motion before the Commission (regardless of applying for immunity or for reduction of a fine), to be submitted to a NCA or multiple NCAs. In theory therefore, harmonisation concerns the application of leniency procedures with regard to the consistent, uniform and effective application of Article 101 TFEU49, in accordance with the principles of subsidiarity and procedural autonomy. However, these principles are, as mentioned, weakened by soft, informal harmonisation of strictly procedural rules or provisions. It is particularly noteworthy that the MLP itself (in both its original and revised version), as well as the associated press communications of the Commission, stress the ECN members’ obligation to harmonise their schemes with the MLP. The NCAs are committed ‘to using their best efforts within the limits of their competence, to align their respective programmes with the ECN Model Programme’. In all cases, a reservation is made that ‘[i]n order to become operational, the principles set out in the MLP need to be implemented under the respective leniency programmes of ECN members either by introducing them to the programmes or implementing them in
49 And the effectiveness of the leniency programmes in the Member States themselves; M. Król-Bogomilska, Zwalczanie karteli w prawie antymonopolowym i karnym, Warszawa 2013, p. 212.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES LENIENCY – THE POLISH PROGRAMME AND THE ‘SEMI-FORMAL’… 95 practice, as the case may be’50. After the MLP’s introduction, C. Gauer and M. Jaspers stressed that the authorities were doing what had been ‘required to ensure that their programmes are revised or […] applied in a manner that is in line with the ECN Model Programme’51.
VI. The Model Leniency Programme and the Polish leniency programmes
The ECN Model Leniency Program was adopted on 29 September 2006. Just one month later, on 26 October 200652, a new draft Act on Competition and Consumers Protection was submitted to the Parliament (in Polish: Sejm) by the Polish government. Considering the time frame, one should expect that the draft of the new Polish Competition Act could have reflected at least some of the solutions proposed by the ECN in its MLP – the Polish NCA should have been aware of the works taking place on the creation of the MLP because it had been actively participating in its drafting process53. However, this was not the case. The 2007 Competition Act’s leniency programme54 was neither harmonised with the MLP, nor with the 2006 Commission Leniency Notice. It repeated solutions contained in its predecessor, which was harmonised with the 2002 Commission Leniency Notice55. The solutions of the MLP were not introduced in Poland until the issue of a new Polish Leniency Regulation on 26 January 200956 and the Guidelines of the UOKiK President on the leniency programme57 issued on 24 February 2009.
50 Commission’s memo of 2012, Competition: European Competition Network refines its Model Leniency Programme – Frequently asked questions (see footnote 28), p. 3. 51 C. Gauer, M. Jaspers, ‘ECN Model Leniency Programme…’, p. 38, emphasis added. 52 The print of the Sejm (V term) no. 1110; see the description of the legislative process at http://orka.sejm.gov.pl/proc5.nsf/0/5ABF9F4FB480E9B1C1257226004AC723?OpenDocument; eventually adopted on 16 February 2007. 53 M. Król-Bogomilska, ‘Program łagodzenia kar...’, p. 9. 54 Article 109 of the 2007 Competition Act, supplemented by the Regulation of the Council of Ministers of 17 July 2007 concerning the mode of proceeding in cases of undertakings’ applications to the President of the UOKiK of Competition and Consumer Protection for immunity from or reduction of fines (Journal of Laws 2007 No. 134, item 938), repealed in 2009. 55 See R. Molski [in:] T. Skoczny, D. Miąsik, A. Jurkowska (eds.), Ustawa o ochronie…, p. 1665–1666. 56 Regulation of the Council of Ministers concerning the mode of proceeding in cases of undertakings’ application to the UOKiK President for immunity from or reduction of fines Journal of Laws 2009 No. 20, item 109; the 2009 Leniency Regulation; English language version available at http://www.uokik.gov.pl/download.php?plik=7619. 57 Available (in Polish only) at http://www.uokik.gov.pl/download.php?plik=9486; (hereafter, UOKiK President’s Guidelines).
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The 2009 version of the Polish leniency programme included some elements of the original version of the MLP of 2006. It specified the contents of leniency applications in accordance with the MLP. The terms and conditions of the applicant’s cooperation with the NCA were determined more precisely than before. Simplified (marker) and summary applications procedures were introduced. Serious doubts arise however from the fact that such detailed procedural rules were introduced in a mere ministerial regulation and guidelines issues by the NCA. Furthermore, the 2009 Leniency Regulation exceeded the authorisation given to the Council of Ministers by former Article 109(5) of the 2007 Competition Act. The latter authorised the Council of Ministers to ‘determine (…) the procedure to be followed in the event when undertakings have applied for renouncement or reduction of a fine, including in particular: 1) the method of accepting and considering undertakings’ requests for renouncement or reduction of a fine, 2) the method of notifying the undertakings of the position assumed by the President of the Office – having regard to a necessity for ensuring the option for producing a reliable assessment of whether the undertakings have fulfilled the conditions referred to in paragraphs 1 and 2 [determining rules of applying for immunity or for reduction of a fine, respectively], and for classifying the requests appropriately’58. As seen in the wording of the 2007 Competition Act, the Council was not authorised at that time to introduce new or more detailed conditions and requests concerning leniency applications (broadening the scope of the leniency programme set forth by the 2007 Competition Act). In addition, the programme’s procedures, information requested from a leniency applicant and terms of approaching the NCA with each type of leniency application, were ultimately determined in the UOKiK President’s Guidelines. A leniency programme introduced by a ministerial regulation (an act of lower order, implementing statutory provisions) and by an NCA’s unofficial Guidelines (having no binding power), instead of by an act of Parliament, must thus be disqualified59. In particular, the UOKiK President’s Guidelines should not determine duties of undertakings and requirements as to applications not provided in the provision of the 2007 Competition Act and the 2009 Leniency Regulation. They are meant to clarify the UOKiK President’s view on existing rules60.
58 Wording after the English language version as published at the UOKiK’s website: http:// www.uokik.gov.pl/download.php?plik=7618. 59 See also, e.g., R. Molski, [in:] T. Skoczny, D. Miąsik, A. Jurkowska (eds.), Ustawa o ochronie…, p. 1693, M. Król-Bogomilska, ‚Kary pieniężne – główne kierunki ewolucji w okresie 20 lat rozwoju polskiego prawa antymonopolowego’ (2010) 5 Europejski Przegląd Sądowy 12. 60 B. Turno, Leniency..., p. 362.
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This error was corrected by the 2014 Amendment to the 2007 Competition Act (see section II above). The 2014 Amendment moved the detailed provisions on the Polish leniency programme from the 2009 Leniency Regulation to the Competition Act itself. However, the details specified in the UOKiK President’s Guidelines are not included in a new regulation61 and remain the unofficial, non-binding set of rules. Apart from the above-described formal issues, the newly enacted amendment harmonises the Polish programme with the MLP as revised in 2012. In accordance with the MLP, the new Polish scheme provides a precise description of the conduct that should be contained in the leniency application. It is explicitly required for the application to cover the description of the circumstances and mode of operation of the prohibited agreement (Article 113a(2)(6), as introduced by the 2014 Amendment; para. 6 of the MLP). For the sake of clarification, and in order to ensure higher degree of transparency, the UOKiK President must immediately confirm the date and the hour of each leniency submission (Article 113a(4); para. 15 of the MLP). The conditions of cooperation are refined as well. Now, in addition to the duty to present relevant evidence and information without delay and upon the undertaking’s own initiative, the cooperation requirement will also include a duty (i) not to destroy, falsify or conceal information and evidence; (ii) not to disclose the fact of applying for leniency; as well as (iii) not to hinder the provision of explanations by one’s employees and managers (Article 113a(5)(3) and (4) and (2); para. 13(1)(d), (e) and (c) of the MLP, respectively). The duty to cease participation in the prohibited agreement, which already existed in the earlier version of Polish leniency, has been supplemented with the exceptional right to withdraw from the agreement only after the submission of the application (Article 113a(6); para. 13(1)(a) of the MLP), and not necessarily as of the day, at the latest, of submitting the leniency application. Importantly, the remodelled Polish programme allows an initiator of the infringement to benefit from immunity. Similarly to para. 8 of the MLP, only an undertaking coercing others to participate in the agreement will not be eligible for immunity [Article 113a(3)]. The new Polish programme eventually departs from the former rule of calculating a reduced fine by reducing maximum fine thresholds62. Now, as in the 2006 Commission Leniency Notice (para. 26)63, a fine reduced under the leniency programme will be calculated on the basis of the fine that would
61 Regulation of the Council of Ministers of 23 December 2014 on the mode of proceeding with an application for immunity from or for reduction of a fine, Journal of Laws of 2015 item 81; new guidelines are expected to be issued soon. 62 See section II above. 63 See also para. 11 of the MLP.
VOL. 2015, 8(11) 98 MARCIN KULESZA otherwise have been imposed. The fine will be reduced by 30-50%, 20-30% or up to 20%, depending on the order of approaching the NCA [Article 113c(2)]. Moreover, the amendment moves the marker and summary applications from the 2009 Leniency Regulation to the 2007 Competition Act. However, it is worth stressing that the Polish leniency programme remains applicable not only to cartels, but also – or, considering the practice of the UOKiK President, primarily – to illegal vertical agreements. Thus, the main difference between the Polish and the EU leniency programme (as well as the MLP) has not been removed by the recent amendment.
VII. Closing remarks
The MLP is a semi-formal measure of harmonisation of competition protection policies of the EU and its Member States. It relates to reductions of fines imposed with regard to participation in competition restricting conducts, serving as an element strengthening the policies’ effectiveness. The MLP itself, as well as the official statement given by the Commission regarding its 2012 revision, stress that European competition authorities have committed themselves to harmonisation of their current and future leniency programmes and practices with the refined Model Programme. Thus, as follows from the MLP, the aforementioned statement and the new amendments to the Polish scheme, leniency programmes are subject to continuous changes and progressive harmonisation, based on experiences and studies, meant to increase their effectiveness in the EU and in each of its Member States. It is obvious that the recently adopted amendment arises from the aforementioned obligation of the UOKiK President as a member of the ECN. It would be advisable, however, to consider inserting additional solutions provided in the MLP into the current Polish leniency programme. For example, the possibility to submit a summary application, limited in the Competition Act (as changed by the recent amendment) to an undertaking who already applied to the Commission for immunity (Article 113f of the amended 2007 Competition Act), should be extended to applicants requesting the Commission to find that they qualify for a fine reduction (explicitly provided in para. 24 of the MLP as revised in 2012). Moreover, a marker application should include a justification for the concern that led the applicant to follow this leniency approach (para. 18 of the MLP). Ideally, every leniency application should contain such a justification, subject to verification by the given competition authority. To sum up, the statement should be fully endorsed that harmonisation of leniency programmes across Europe, or even introduction of a uniform
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES LENIENCY – THE POLISH PROGRAMME AND THE ‘SEMI-FORMAL’… 99 leniency programme applicable both in the EU and in purely domestic cases, is desirable. It would have a significant positive impact on legal safety and certainty of undertakings and on the effectiveness of combating prohibited agreements (cartels) in the EU. One should even share the view64 that full harmonisation of the entirety of competition law is necessary. Moreover, semi-formal harmonisation of leniency programmes is effective. The EU scheme and the programmes of its Member States are increasingly convergent. It is doubtful, however, that the current manner of harmonisation – semi-formal, political, carried out at the level of competition authorities rather than Member States – is correct65. If it was the intention of the Commission and of the NCAs to harmonise this area, such harmonisation should take the shape of a directive. Further doubts arise in the context of the weakening of the principles of subsidiarity and procedural autonomy. Harmonisation by way of the MLP, taking place when NCAs follow their commitment expressed in the MLP, translates directly into national legal systems including also (or even mainly) strictly domestic cases, without any link to Article 101 TFEU. The MLP’s impact on these principles should thus be subject to further studies. In addition, national authorities may apply the rules set out in the MLP by way of interpreting their national provisions in the framework of these rules (as is the case in Poland under the UOKiK President’s Guidelines). This approach may have an adverse effect on legal safety and certainty of undertakings, which, as mentioned, are the main aims of harmonising leniency programmes66. In the light of the above remarks, considering also the globalisation of the application of competition law and policy, harmonisation is necessary. However, it should be sanctioned on a proper level by binding legislation – both in the European Union and in Poland.
Literature
Aziewicz D., ‘Naruszenie obowiązków proceduralnych przez Prezesa Urzędu Ochrony Konkurencji i Konsumentów. Wyrok Sądu Najwyższego z dnia 3 października 2013 r., III SK 67/12 PKP Cargo’ [‘The Breach of the Procedural Duties by the President of the UOKiK of Competition and Consumer Protection. The Judgement of the Supreme Court of 3 October 2013, III SK 67/12 PKP Cargo’] (2014) 1(3) iKAR.
64 Expressed in Poland, e.g., by Ms Małgorzata Modzelewska de Raad at the Third GCLC Decentralised Lunch Talk on 9 May 2014. 65 For extensive criticism of the Commission in the context of harmonisation of the procedural rules via the ECN see K. J. Cseres, ‘Questions of Legitimacy…’, p. 26–31. 66 M. Bogomilska-Król, Zwalczanie karteli..., p. 213, footnote 40.
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Brodecki Z. (ed.), Konkurencja [Competition], Warszawa 2004. Cengiz F., ‘The European Competition Network: Structure, Management and Initial Experiences of Policy Enforcement’ (2009) 5 European University Institute, Max Weber Programme Working Paper. Cseres K. J., ‘Questions of Legitimacy in the Europeanization of Competition Law Procedures of the EU Member States’ (2013) 2 Amsterdam Centre for European Law and Governance Working Paper. Gauer C., Jaspers M., ‘ECN Model Leniency Programme – a first step towards a harmonised leniency policy in the EU’ (2007) 1 Competition Policy Newsletter. Gauer C., Jaspers M., ‘'The European Competition Network Achievements and challenges – a case in point: leniency’ (2006) 1 Competition Policy Newsletter. Juknevičiūtė V., Capiau J., ‘The state of ECN Leniency convergence’ (2010) 1 Competition Policy Newsletter. Kowalik-Bańczyk K., Prawo do obrony w unijnych postępowaniach antymonopolowych. W kierunku unifikacji standardów proceduralnych w Unii Europejskiej [The Right of Defense in the Union Antimonopoly Procedures], Warszawa 2012. Król-Bogomilska M., ‘Kary pieniężne – główne kierunki ewolucji w okresie 20 lat rozwoju polskiego prawa antymonopolowego’ [‘Pecuniary Fines – the Main Direction of Evolution in the 20 Years Period of Development of the Polish Antimonopoly Law’] (2010) 5 Europejski Przegląd Sądowy. Król-Bogomilska M., ‘Program łagodzenia kar (leniency) w polskim prawie antymono- polowym – po pięciu latach obowiązywania ustawy’ [‘The Programme of Mitigating Fines (Leniency) in the Polish Antimonopoly Law – After Five Years of the Act In Force’] (2012) 4 Europejski Przegląd Sądowy. Król-Bogomilska M., Zwalczanie karteli w prawie antymonopolowym i karnym [Combating Cartels in the Antimonopoly Law], Warszawa 2013. Kulesza M., ‘Ważna zmiana w orzecznictwie SN – sądy mogą badać naruszenia procedury przez Prezesa UOKiK’ [‘Important Change in the SC Case Law – the Courts May Examine Breaches of Procedures by the OCCP President’], (2013) 21.11 Co do zasady. Monti G., ‘Independence, Interdependence and Legitimacy: The EU Commission, National Competition Authorities, and the European Competition Network’ (2014) 1 EUI Department of Law Research Paper. Polley R., ‘Leniency in the ECN Framework of Parallell Competences’ [in:] Meessen K.M., Bungenberg M., Puttler A. (eds.), Economic Law as an Economic Good: Its Rule Function and its Tool Function in the Competition of Systems, Munich 2009. Skoczny T., Miąsik D., Jurkowska A. (eds.), Ustawa o ochronie konkurencji i konsumentów [Competition and Consumers Protection Act], Warszawa 2009. Turno B., Leniency. Program łagodzenia kar pieniężnych w polskim prawie ochrony konkurencji [Leniency. The Programme of Mitigating Pecuniary Fines in the Polish Competition Protection Law], Warszawa 2013.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Competition Law in Kosovo: Problems and Challenges
by
Orhan M. Çeku*
CONTENTS
I. Introduction 1. The historical and political context of Kosovo 2. Legal situation 3. Economic and business environment II. The legal basis of competition law in the Republic of Kosovo 1. Competition Law 2. Law on the Protection of Competition 3. Law on State Aid III. Kosovo Competition Authority 1. Election, appointment and composition of the Competition Commission members 2. Duties and responsibilities of the Competition Commission 3. Legal Acts and Punitive Measures IV. Prohibited Agreements 1. Identified cases of prohibited agreements V. Abuse of a Dominant Position 1. Introduction 2. Prevention of abuse of a dominant position 3. Identified cases of abuse of a dominant position VI. Concentration of Enterprises 1. Prohibited Concentrations 2. Identified cases of concentrations VII. State Aid 1. Research on Competition Law in Kosovo 2. Conclusion
* Orhan M. Çeku, Ph.D in the field of law, lecturer at Pjeter Budi College of Commercial Law, Pristina, Republic of Kosovo; [email protected].
VOL. 2015, 8(11) 102 ORHAN M. ÇEKU
Abstract
Competition Law is an important aspect of free market economy. It determines the functioning of the economic system based on the free market principles of supply and demand. Competition law is in the initial stage of its implementation in the Republic of Kosovo. Its development began in 2004 with the adoption of Kosovo’s Law on Competition, the country’s very first law passed to regulate the legal basis of free market competition. The Law on Competition of 2004 had many shortcomings both with respect to its content and implementation. New legislation was thus passed in 2010 under the name the Law on the Protection of Competition. The latter act is in force now along with an Amendment that entered into force in early 2014. Taken in its entirety, Kosovo’s competition law meets the standards and is in accordance with EU legislation. Kosovo, although it is only in the initial stage of its contractual relations with the EU, has aligned most of its laws with the requirements of EU legislation. Kosovo is Europe’s youngest country and as such, it has various problems when it comes to the functioning of the rule of law. This paper will discuss several topics related to the development of competition law in Kosovo including: the political, legal and economical situation in the field of competition law; the legal bases for the protection of competition in Kosovo; the Kosovo Competition Authority and the insufficiency in its capacities to combat competition law infringements; legal provisions on restrictive practices and merger control. The paper also includes comprehensive conclusions. A number of competition cases deal with by the Kosovo Competition Authority will be mentioned throughout the paper.
Résumé
Droit de la concurrence est un aspect important de l’économie de marché libre. Il détermine le fonctionnement du système économique basé sur les principes de l’offre et de la demande. Dans la République du Kosovo le droit de la concurrence est dans la phase initiale de sa mise en œuvre. Son développement a commencé en 2004 avec l’adoption de la Loi sur la concurrence, la première loi jamais adoptée pour réglementer les bases juridiques de la libre concurrence. Cette loi avait des nombreuses défauts concernant son contenu et sa mise en œuvre. En effet, une nouvelle législation sous le nom de la Loi sur la protection de la concurrence a été adoptée en 2010, qui est actuellement en vigueur avec un amendement introduit au début de 2014. Pris dans son ensemble, le droit de la concurrence de Kosovo répond aux standards européens et est conforme à la législation de l’UE.Kosovo, même si cela n’est que dans la phase initiale de ses relations contractuelles avec l’UE, a déjà aligné la plupart de sa législation avec les exigences du droit européen. Kosovo est le plus jeune pays de l’Europe et en tant que tel a des divers problèmes concernant le fonctionnement de la règle de droit. Cet article discute plusieurs sujets liés à l’évolution du droit de la concurrence au Kosovo, notamment: la situation
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES COMPETITION LAW IN KOSOVO: PROBLEMS AND CHALLENGES 103
politique, juridique et économique dans le domaine du droit de la concurrence; les bases juridiques pour la protection de la concurrence au Kosovo; l’Autorité de la concurrence de Kosovo et sa capacité limitée pour lutter contre les pratiques anticoncurrentielles; les dispositions juridiques concernant les pratiques restrictives et le contrôle des concentrations. L’article contient des conclusions exhaustives. Il évoque aussi un certain nombre des affaires de concurrence traités par l’Autorité de le concurrence de Kosovo.
Classifications and keywords: abuse; agreement; authority; commission; competition law; concentration; dominant position; Kosovo; state aid
I. Introduction
Competition law is known as antitrust law in the legal terminology of the United States of America. ‘Antitrust laws were put in place by federal and state governments to regulate corporations. They keep companies from becoming too large and fixing prices, and also encourage competition so that consumers can receive quality products at reasonable prices. These laws give businesses an equal opportunity to compete for market share. Preventing monopolies ensures that consumer demand is met in a fair and balanced way. There are four sections that the laws focus on including agreements between competitors, contracts between buyers and sellers, mergers and monopolies’1. Having been the engine of economic development, competition seams a necessary subject of regulation laws. Thus, the operation of fair competition in the free market economy is regulated by legal provisions which set out the general framework of its operation. Competition law is made by the totality of all legal rules designed by the State to regulate fair market competition. ‘Competition law may have two different definitions. The first definition, very large, proposes to review the entirety of competition law rules governing the rivalry between economic agents who are looking for clients or who want to keep them. The second, narrower definition, sees competition law as a set of rules designed to prevent and to fight, if necessary, practices which distort competition’2. Kosovo’s current Law on the Protection of Competition (hereafter, LPC), approved by the Assembly in 2010, is a reflection of Kosovo’s intention to ensure fair competition and to protect its consumers. The LPC is in accordance with the standards, and is roughly in line with the laws and enforcement practices of
1 http://www.antitrustlaws.org/. 2 C. Nourissat, E drejta e biznesit e Bashkimit Evropian, Papirus 2012, p. 231.
VOL. 2015, 8(11) 104 ORHAN M. ÇEKU the EU. The LPC provides for the establishment of the Kosovo Competition Authority (hereafter, KCA or Authority). Unfortunately, the Authority’s sound institutional foundations have not yet been reflected in its work. Although multiple instances of serious violations of Kosovo’s competition law are well known to have taken place, the KCA has failed to take the necessary measures to resolve them. Still, some enforcement practice does exist covering restrictive practices (prohibited agreements and abuse) as well as concentration control (both a clearance of a notified operation and a prohibition). Except for the LPC, a separate Law on State Aid regulates the granting of state aid and its unacceptable cases.
1. The historical and political context of Kosovo
The Republic of Kosovo is the youngest independent European State and it is in this context that the development of its competition laws must be viewed. The Constitution of the Republic of Kosovo was adopted on 9 April 2008 and entered into force on 15 June 2008. According to the Constitution, ‘the Republic of Kosovo is independent, sovereign, democratic, unique and inseparable’3. Kosovo emerged from the breakup of the former Socialist Federation of Yugoslavia. However, on the dissolution of the federation in the early 1990s, Kosovo’s right to secession was not accepted. After NATO’s humanitarian intervention, a United Nations Mission was installed in Kosovo (known as UNMIK) under Resolution 1244 of the Security Council of the UN. The mission exercised legislative, executive and judiciary powers in Kosovo4. Representatives of the Kosovo Assembly proclaimed its Declaration of Independence on 17 February 2008. From this date forth, Kosovo has acquired the status of an independent State and as such, it is now recognized by more than 100 members of the UN. The unilateral declaration of independence was the result of failed talks between the representatives of Kosovo and the representatives of Serbia, mediated by the Special Envoy of the UN Secretary General, Mr. Martti Ahtisaari. It was Mr Ahtisaari who drafted the plan (known as the Ahtisaari package) for the final settlement of Kosovo’s status. The plan envisaged the creation of an independent State of Kosovo with enhanced rights for its minorities. However, the plan was rejected by Serbia, and it was ultimately not put to the vote in the UN because of Russia’s opposition.
3 Article 1 of Constitution of the Republic of Kosovo. 4 For more details see: http://www.un.org/en/sc/documents/resolutions/1999.shtml.
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2. Legal situation
Kosovo’s political circumstances have enabled a sustainable development of its legal system. As a former socialist country, Kosovo has inherited legislation inconsistent with its new situation. Initially, UNMIK was led by a Special Representative of the Secretary General of the UN (hereafter: SRSG) – the acting chief administrator approved the Regulation on the Authority of the Interim Administration in Kosovo. Under this UN Regulation, laws applicable in the territory of Kosovo prior to 24 March 1999 were to continue applying insofar as they did not conflict with standards referred to in section 25 of this Regulation, the fulfillment of the mandate given to UNMIK under UN Security Council Resolution 1244 (1999), or present or any other Regulations issued by UNMIK6. The Constitutional Framework for Provisional Self-Government was passed in 20017. On its basis, the first free parliamentary elections took place in late 2001; Kosovo’s institutions were constituted at the same time. From then on, it was the Kosovo Assembly that enacted laws, but in order for them to enter into force, they still needed to be proclaimed by the SRSG. Following such an announcement by the SRSG, they would turn into UNMIK Regulations. This situation lasted until the entry into force of the Constitution of the Republic of Kosovo on 15 June 2008. The current conditions for the shaping of Kosovo’s legal system were created upon the entry into force of its Constitution. The Constitution states that ‘Kosovo is a democratic republic based on the principle of separation of powers and checks and balances among them, as provided in this Constitution’. As a democratic republic, each branch of the government exercises its functions under the Constitution and other laws by not interfering in the functions of others. ‘The Assembly of the Republic of Kosovo exercises the legislative power. The President of the Republic of Kosovo represents the unity of the people [and] is the legitimate representative of the country inside and out and the guarantor of the democratic functioning of the institutions of the Republic of Kosovo in accordance with this Constitution. The Government of the Republic of Kosovo is responsible for enforcing state laws and policies and is subject to parliamentary control. Judicial power is
5 See UNMIK/REG/1999/1: ‘In exercising their functions, all persons undertaking public duties or holding public office in Kosovo shall observe internationally recognized human rights standards and shall not discriminate against any person on any ground such as sex, race, color, language religion, political or other opinion, national, ethnic or social origin, association with a national community, property, birth or other status’. 6 UNMIK/REG/1999/1, 25 July 1999. 7 Regulation No. 2001/9, Constitutional Framework for Provisional Self-Government in Kosovo, 15 May 2001.
VOL. 2015, 8(11) 106 ORHAN M. ÇEKU exclusive, and is exercised by independent courts. The Constitutional Court is an independent body of constitutional protection and the final interpreter of the Constitution. The Republic of Kosovo has its own institutions for the protection of its constitutional order and territorial integrity, public order, which operate under the constitutional authority of the democratic institutions of the Republic of Kosovo’ (Article 4 of the Constitution). The establishment, competences and structure of Kosovo’s courts are regulated by a special legal act. According to the Law on Courts in the Republic of Kosovo (Law No. 03/L-199): ‘[t]he court system of the Republic of Kosovo consists of: Basic Courts, the Court of Appeals and the Supreme Court’. Basic Courts are courts of 1st instance established in Kosovo’s main centers (7 cities), with their branches located in smaller municipalities. Appeals against decisions of Basic Courts are heard by the Court of Appeals which acts in the 2nd instance. It has territorial jurisdiction throughout the entire Republic of Kosovo. The Supreme Court is the highest judicial instance in Kosovo with jurisdiction covering its entire territory. As the court of final instance, it has jurisdiction to deal with extraordinary legal remedies against final decisions of the courts in criminal matters8 and review 2nd instance judgments.
3. Economic and business environment
‘A market economy with free competition is the basis of economic regulation of the Republic of Kosovo’9. Kosovo has a young and dynamic open market economy. However, its economy originates in a centralized system which has undergone profound transformation after 1999. Situated in Southeastern Europe, Kosovo’s economy has become part of the region’s economic integration process, which provides sufficiently large market expansion opportunities. Kosovo is a member of the Central European Free Trade Agreement (CEFTA). It has joined the International Monetary Fund (IMF), the World Bank (WB) and other mechanisms facilitating robust economic and financial development. They include the European Bank of Reconstruction and Development (EBRD) and the Development Bank of the Council of Europe (CEB), where Kosovo was accepted as a full member in June 2013.
8 Under Kosovo’s Criminal Procedure Code, final judicial decisions can be reviewed for various reasons on the basis of so-called extraordinary legal means such as: the application for the protection of legality submitted by the State Prosecutor, review of the criminal procedure, and request for extraordinary mitigation of the ruling. 9 Article 10 of the Constitution of the Republic of Kosovo.
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Table 1. Key macroeconomic indicators for Kosovo (2008–2013)
2008 2009 2010 2011 2012 2013 Real GDP growth (%) %, y-o-y 6.9 2.9 3.9 5.0 2.5 3.1 GDP nominal EUR billion 3.7 3.9 4.2 4.6 4.9 5.3 GDP per capita EUR 2 100 2 330 2 520 2 530 2 721 3 117
Source: Kosovo Agency of Statistics and Central Bank of the Republic of Kosovo
Business activity in Kosovo is regulated by the Law on Commercial Companies (Law no. 02/L-123) approved on 27 September 2007. Accordingly, business organizations can take the following forms in Kosovo: Business Individual (BI), general partnership (OP), joint Sh.KM Partnership, limited liability Sh. PK, and Joint Stock Company (JSC). A separate Public Companies Law exists which regulates the establishment and management of public enterprises.
II. The legal basis of competition law in the Republic of Kosovo
Competition law in the narrow sense of the term is understood as a set of rules designed to prevent and fight, if necessary, practices that distort free and legitimate competition. The Republic of Kosovo has a certain experience in the field of competition law, given the fact that it was, until the early 1990s, part of the Socialist Federation of Yugoslavia. After 1999, opportunities emerged to create economic legislation which is based on the principles of free market economy.
1. Competition Law
In 2004, the Kosovo Assembly adopted a Law on Competition (Law No. 2004/36) which was intended to ensure the development of a sustainable market economy in Kosovo. Accordingly: ‘[t]he purpose of this law is to ensure the development of a sustainable market economy in Kosovo by prohibiting actions that restrict, suppress or distort competition. This law shall apply to all undertakings engaged in economic activity within, or having economic impact within, the territory of Kosovo’10. The above law was adopted at a time when UNMIK was the main decision-making authority in Kosovo and thus it did
10 Article 1 of the Law on Competition – Law No. 2004/36.
VOL. 2015, 8(11) 108 ORHAN M. ÇEKU not meet internationally accepted criteria and standards. The original act was repealed with the adoption in 2010 of the Law on the Protection of Competition (Law No. 03/L-229), which is currently in force. Approximately 3.5 years after the introduction of the LPC, the Law on Amending and Supplementing the Law No. 03/L-229 on the Protection of Competition (Law No. 04/L-226) was approved on 13 February 2014 (hereafter, LPC Amendment).
2. Law on the Protection of Competition
The Law on the Protection of Competition was approved by the Assembly of Kosovo on 7 October 2010, promulgated by the Decree of the President of the Republic of Kosovo No. DL-061-2010 of 25 October 2010. The LPC entered into force 15 days after its publication in the Official Gazette. According to Article 1 LPC: ‘[t]his law defines the rules and measures to protect free and effective competition in the market, competences and organization of the Competition Authority and the procedures to implement this law’11. The LPC applies to all forms of prevention, restriction or misuse of competition by enterprises in the territory of the Republic of Kosovo, or outside its territory provided these actions have effects in Kosovo. The law provides two manners of supervising market competition: 1. Control of the actions of enterprises 2. Control of the structure of the market Controlling the actions of enterprises takes place by overseeing agreements between enterprises that restrict competition and possible abuses committed by enterprises that hold a dominant position in the market12. The legal definition of what constitutes an ‘enterprise’ is provided by the LPC Amendment. Accordingly, Article 2(2) defines an enterprise as: ‘any business activity, regardless of the manner or form of organization management, public entrepreneurship established to carry out activities in the public interest, and any other natural or legal person or public authority that carries out economic activities whether or not it considered a business entity’. Controlling the structure of the market is achieved by supervising concentrations in order to prevent the creation of a market structure that can facilitate anti-competitive exchanges between enterprises and the creation of a dominant position which may lead to higher market prices. The difference between reviewing agreements and dominance on the one hand, and concentrations on the other hand, is that the analysis of restrictive practices focuses on the past (performed ex post), whereas the assessment
11 Article 1 of the Law on the Protection of Competition – Law No. 03/L-229. 12 S. Kabashi, G. Asllani, Konkurrenca dhe e Drejta e Konkurrencës, Prishtinë, 2012, p. 64.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES COMPETITION LAW IN KOSOVO: PROBLEMS AND CHALLENGES 109 of concentrations is based on predictions made for the future (conducted ex ante)13.
Graphic 1. Power ex ante and ex post
Ex ante: Ex post: • Tracking cartels Control of Concentrations • Abuse of a dominant position • Decisions on penalties
Ex ante or Ex post • Advocacy Source: http://ak.rks-gov.net (official website of the Kosovo Competition Authority)
The LPC, along with the LPC Amendment, constitutes the legal basis for the regulation of market competition in Kosovo. The LPC has 12 parts with a total of 70 articles. Part I contains general provisions specifying the purpose of the law, the scope of its application and definitions. Part II covers prohibited agreements. Part III is dedicated to exemptions and allowances. Part IV addresses the abuse of a dominant position. Part V deals with concentrations. Part VI considers the professional opinion of the Kosovo Competition Authority: ‘1. The Authority, on the request of the Kosovo Parliament, Government of the Republic of Kosovo, central organs of public administration, legal persons with public authority and local organs, provides its professional opinion for the laws, regulations and other bylaws that significantly affect market competition. 2. The Authority may provide its opinion to organs referred to in paragraph 1 of this Article about compatibility of existing laws and other regulations with this law, it may provide opinions which encourage knowledge about market competition, improve the level of awareness and information relating to the role of the law and competition policy respectively, as well as provides professional opinions on resolutions and comparative developments of practices in the field of legislation and market competition policies’14. Part VII covers the establishment, structure and organization of the KCA while Part VIII speaks of its procedures. Part IX contains penalty provisions. Part X foresees the instances of the KCA’s cooperation with other bodies as well as judicial protection. Part XI deals with the implementation of the decisions or penalizing measures issued by the KCA and their statute of limitations. Part XII contains transitional provisions and addresses the issue of law enforcement stating expressly, in Article 66 LPC, that: ‘The implementation of this law should be in accordance with European
13 Ibidem. 14 Article 23 LPC.
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Union directives for competition’. This means that even though Kosovo has no contractual relations with the EU, it already largely harmonizes its laws and their implementation with the requirements of EU legislation. In this context, the KCA is authorized to propose bylaws, which must be approved by the Government, for the implementation of the LPC. Kosovo’s main competition law provisions will be examined in the following part of this paper. It is worth stressing that the recent LPC Amendment eliminated some of the LPC’s original technical problems and provided some additional legal provisions related to fines/ penalties that may be imposed by the KCA.
3. Law on State Aid
The legal basis for the regulation of competition in Kosovo also includes the Law on State Aid (Law No. 04/-L-024) adopted on 29 July 2011. ‘With this law the principles and procedures are defined, in accordance with which state aid is allowed and controlled, in order to support economic and social development, to apply the principles of functioning of the market economy, to protect competition, and to fulfill obligations stemming from international agreements ratified by the Republic of Kosovo, including provisions on state aid. This law applies to all sectors of production and services operating in the Republic of Kosovo, with the exception of agriculture and fisheries’15. The Law on State Aid is relatively short consisting of only 21 articles. Incidentally, it is clearly stated therein that ‘[t]o implement this law in terms of content and procedures, related institutions must adhere to the case law of the Court of Justice of the European Union and the European Commission’16.
III. Kosovo Competition Authority
The Kosovo Competition Authority (hereafter, KCA) was established in accordance with the original Law on Competition no. 2004/36 by the Assembly of Kosovo on 7 November 2008. The Authority is operational since March 2009. The KCA is an independent body and has the responsibility, and the authority, to enforce the law and promote competition among enterprises and to ensure consumer protection in Kosovo17.
15 Article 1 and 2 of Law No. 04/-L-024. 16 Article 20 of the Law No. 04/-L-024. 17 http://ak.rks-gov.net/?cid=1,11 (official website of the Kosovo Competition Authority).
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The KCA is a legal entity with an independent public power to carry out its duties stipulated in the LPC and in the Law on State Aid. The Authority answers for its work to the Assembly of Kosovo; its headquarters are in Pristina18. In carrying out its work, the KCA is prohibited from being under any form of influence which could affect its independence and impartiality. The internal structure and working of the Authority, as well as other issues relevant to its work, are set out in the Statute of the KCA which was drafted by the Authority itself and approved by the Assembly of Kosovo. The finances needed to perform its duties are provided from the Budget of the Republic of Kosovo. Penalty payments imposed by the KCA constitute public revenue that goes into the State Budget. The KCA is a collegial body governed by the Kosovo Competition Protection Commission, which consists of 5 members: the President of the Commission and four Commissioners appointed by the Assembly of Kosovo, following the proposal submitted by the Government. The Authority consists of two categories of staff. The first group includes staff part of the Competition Commission (the managerial body of the KCA); the second category includes support staff elected in a public competition and covered by the Law on Civil Service. The Competition Commission constitutes the decision-making part of the KCA while the support staff assists the Commission in the implementation of the powers arising from the LPC.
1. Election, appointment and composition of the Competition Commission members
According to the LPC, the Competition Protection Commission is a collegial body that manages the work of the Authority, consists of five (5) members, one of whom is the President of the Commission. The [KCA] is represented by the President of the Commission. In case of the absence of the President, it is represented by the deputy or other authorized [member] of the Commission. The President of the Commission leads organizes and directs the work and the activities of the [KCA] and is responsible for the professional work of the [KCA]. The President, Deputy President and other members of the Kosovo Competition Commission are proposed by the Government and appointed by the Kosovo Assembly19.
18 Article 11(2) of the Law no. 04/L-226 Amending the Law No. 03/L-229 for Protection of Competition. 19 Article 12(1)(1) of the Law No. 04/L-226.
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To be elected as a member of the Commission, candidates must meet the criteria outlined in the LPC. Each candidate must be a citizen of the Republic of Kosovo, must have superior qualifications in law, economics or equivalent, must have 7 years professional experience in the field of competition. The President and members of the Commission shall be appointed for a term of 5 years, and may be reappointed for one more term if so proposed by the Government. None of the members has the right to engage in political activities and cannot have ownership or contractual relationship with any enterprise in Kosovo. 60 days before the end of the mandate of a member of the Commission, the Government proposes to the Assembly candidates for the appointment or reappointment to the Commission. Commission meetings are held when at least three of its members are present. Decisions are taken with at least 3 affirmative votes.
2. Duties and responsibilities of the Commission
Duties and responsibilities of the Commission are explicitly defined in the LPC and the Statute of the Commission. In the performance of its duties and functions, the Commission must act in accordance with its granted powers based on the Law on Administrative Procedure. Thus the law enforcement activity undertaken by the Commission is administrative in nature and is conducted in accordance with the Law on Administrative Procedure, except in cases where a special law (that is, the LPC) provides otherwise. According to Article 28 LPC, the Commission has the following duties and responsibilities, it: • proposes the issue of bylaws under the provisions of the LPC; • takes decisions based on which the KCA initiates and directs the process of determining a disturbance of competition; • imposes punitive measures for violations of the LPC; • sets deadlines and conditions for their execution; • finalizes procedures and defines measures, conditions and deadlines for the re-establishment of effective competition on the market; • submits a request to the competent court to authorize the officials of the KCA to perform an unannounced investigation, to enter premises or other objects, open depots and transportation means, inspect personal documents and other items found in that location, as well as to place seals (lead-stamping) and temporarily sequent investigated items pursuant to Article 40(1) and Article 42 LPC;
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• actively promotes competition law knowledge, increases awareness as well as the level of information about the role of politics and fairness of trade and competition respectively; • gives opinions on the compatibility with the LPC with other draft laws and legal acts; • proposes a methodological basis for the research of market competition through administrative direction; • formulates laws and measures for the protection of competition; • provides its professional opinion on request of the Assembly, the Government as well as central and local public institutions, on issues related to different public policy fields and mechanism of competition in trade; • cooperates with international institutions and organizations in the field of competition regarding the fulfillment of Kosovo’s international obligations which were transferred into the KCA’s competencies; • drafts the annual report on the work of the KCA and submits it to the Assembly of Kosovo at the latest by the 31 March of each coming year. All members of the Commission are required to behave in a manner which will not diminish the reputation of the KCA during the decision-making process. The Commission has wide powers to protect competition in the Republic of Kosovo. It is the Commission that begins an investigative procedure ex officio. However, a request, proposal, opposition or any other written statement can be submitted to the KCA by other entities: any natural or legal person, professional association, economic interest group, chamber of commerce, consumer association, the Government of the Republic of Kosovo, or central and local public administration body. A concentration control procedure starts, in principle, with a request of its participants under Article 17 LPC. The KCA may also initiate the procedure ex officio if: the participants do not represent the concentration according to Article 15 LPC; in the case of a suspension or amendment of a merger decision under Article 21 LPC; and in the case of measures following the performance of an illegal concentration referred to in Article 22 LPC20. The LPC gives the KCA the power to request documents and to require other actions by all institutions, associations or companies and other persons, which the KCA finds to be relevant to its assessment procedure. The KCA has also the power to request the parties to the proceedings to give the Authority access to all their shops, real estate and movable property, business books and
20 Article 35(2) LPC.
VOL. 2015, 8(11) 114 ORHAN M. ÇEKU databases contained in other documents. Investigated entities (that is, entities towards which proceedings have been initiated by the KCA) are obliged to respond to such requests. In certain cases, and by the decision of a competent court, the KCA has the right to make an inspection as well as control the documents and facilities of entities subject to open proceedings without a warning.
3. Legal Acts and Punitive Measures
All procedural actions, from a moment of the initiation of the investigation until the final receipt of the KCA’s decision, are administrative in nature and must take place in accordance with the Law on Administrative Procedure of the Republic of Kosovo. Decisions adopted by a designated authority are administrative acts. Based on Article 28 LPC, the KCA takes particular decisions which: • assess small value agreements in the sense of the provision set forth in Article 8(3) LPC; • ascertain abuse of a dominant position, specify measures in the sense of the provisions of Article 12 LPC and decide on punitive administrative measures foreseen for violations of this Article; • assess the permissibility of concentrations and specifies measures in the sense of provisions set forth in Article 20 LPC; • annul decisions pursuant to provisions set forth in Article 21(1) and (2) LPC and decide on punitive administrative measures foreseen for violations of this Article; • change decisions and specifies measures pursuant to Article 21(3) LPC; • determines special measures for the re-establishment of market competition after a prohibited concentration pursuant to Article 22 LPC and imposes punitive measures foreseen for violations of this Article; • determines temporary measures pursuant to Article 48 LPC, that the enterprise is not complying with instated measures, provisions and terms pursuant to Article 46(7) LPC; • imposes punitive measures in conformity with the LPC; • establishes that market competition has not been disturbed in the sense of the provisions of the LPC21. Punitive measures which the KCA imposes are divided into: punitive measures for serious violations of competition rules; punitive measures for
21 Article 54 LPC.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES COMPETITION LAW IN KOSOVO: PROBLEMS AND CHALLENGES 115 minor infringements and; punitive measures for violating other rules of market competition. In terms of punitive measures for serious violations of Kosovo’s rules on market competition, the KCA imposes up to 10 % of the total revenue that the firm has generated over the past year. Such penalty is imposed when it is determined that the enterprise: originates a prohibited agreement or in any other way participates in an agreement which has disturbed competition; abuses its dominant position; participates in the execution of a prohibited concentration; does not act in compliance with a decision of the KCA which determines measures for the re-establishment of competition, or determines temporary measures pursuant to sub-paragraphs22. Punitive measures for minor violations of Kosovo’s rules on market competition include fines of 2% of the total revenue in the previous year. These penalties are imposed in cases where the enterprise: did not submit a necessary merger notice; submitted inaccurate or false information in the context of merger control; hampers the performance of a court order23. The KCA can also impose punitive measures for other violations of Kosovo’s rules on market competition totaling between 1,000 and 3,000 Euros. Such measures are imposed on an enterprise which does not have the status of a party to the proceedings but which does not act upon a request of the KCA.
IV. Prohibited agreements
In accordance with the LPC Amendment, the term ‘agreement’ covers agreements of any kind, between undertakings, with or without binding force, decisions or recommendations of associations of undertakings and concerted practices between undertakings, operating at the same level or at different levels of the market. The definition covers written and unwritten as well as silent agreements (so-called gentleman agreement) which violate the provisions of the LPC. The LPC explicitly provides for cases where an agreement between business entities is considered illegal. Accordingly: ‘all agreements between two or more independent enterprises are prohibited, decisions made by business associations and concerted practices that aim or may significantly disturb market competition in a relevant market, and in particular those that: 1. Directly or indirectly impose purchase or sale prices or any other condition of trade;
22 Article 56 LPC. 23 Article 57 LPC.
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2. Limit or control production, markets, technological development and investments; 3. Share markets or supply sources; 4. Implement unequal conditions for similar transactions with different enterprises, consequently placing them in an unfavorable competitive position; 5. Making the conclusion of contracts subject to the acceptance by the other contracting parties of supplementary conditions which have no connection, by their nature or trade practice, with the object of such contracts24. Prohibited agreements can be horizontal or vertical in character25.
1. Identified cases of prohibited agreements
The KCA has made an in-depth investigation into the insurance market for the compulsory insurance product Third Party Liability (hereafter, TPL). During the investigation, the Competition Commission found that a pricing agreement existed between insurance companies for the sale of auto liability insurance policies covering third party liability. Ten insurance companies operating in Kosovo were party to the proceedings. After several months of investigations, completion of the accumulated documentation, collection of evidence and the conduct of oral hearings, the Commission observed that there is a suspicion of illegal practices between insurance companies for fixing the price of auto insurance policies for third party liability (TPL). During the investigation, the Commission found a copy of a written agreement between the insurance companies (dated 3 July 2009, from the town of Djakovica) containing a ban on price reductions on the insurance market. The Commission has determined that an agreement was in operation between the investigated insurance companies whereby they have fixed prices of insurance policies so as to prevent clients from choosing the most favorable offer. This multilateral practice represents a restriction and distortion of competition in the market that breaches Article 3 LPC. The Commission has verified that all of the investigated insurance companies were party to this agreement and imposed administrative fines in the amount of 100,000 EUR each, totaling in a fine of 1 million EUR 26.
24 Article 4 LPC. 25 M. Drakulic, Osnovi Poslovnog Prava, FOM, Bg. MST Gajic, 1993, p. 184. 26 Brief summary of the case with which the Authority has imposed a penalty for violation of the Act, is taken from https://ak.rks-gov.net (the official web site of Kosovo Competition Authority).
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V. Abuse of a dominant position
1. Introduction
‘Competition can be ruined also by the abuse of a dominant position in the common market or in significant part of it by one or more undertakings’27. ‘Economically dominant position fully corresponds with a monopolistic or oligopolistic situation in the market where a company, or a small number of companies, has legal or factual strength independently of the conditions of exchange, not taking into account the interests or the position of other participants in the same market’28. In two decisions taken in the late 70s, the Court of Justice of the European Union has proposed a definition of a dominant position. According to the Court’s interpretation, dominant position ‘is a situation of economic power held by an enterprise, which gives her the ability to prevent effective competition in respect of the market in question and gives the opportunity to act as an independent in a largely opposed competitors, customers and ultimately of its consumers’29. According to the LPC: 1. An enterprise has a dominant position, as a supplier or purchaser of certain types of goods or services: 1.1. if it is not subject to free competition in the market; 1.2. if it has significant market power in comparison with existing or potential competitors, [taking] into account, in particular: 1.2.1. its participation and position in the relevant market; 1.2.2. its financial power; 1.2.3. its access to supplies or markets; 1.2.4. its links to other enterprises; 1.2.5. legal or factual barriers for other companies in the market; 1.2.6. actual or potential competition by undertakings established within or outside of Kosovo. An enterprise is considered to hold an individual dominant position if it holds more than 25% of the market. ‘Two or more independent undertakings may be in a dominant position in relation to competitors if they act together in the relevant market and [where] their overall participation in the market is higher than forty (40%) percent (collective dominant position)’30.
27 M. Hetemi, Disa Tema Aktuale të Ekonomisë së Tregut, Prishtinë 2005, p. 231. 28 Ibidem, p. 232. 29 27/76 United Brands [1978] ECR 207; 18/76 Hoffmann-La Roche [1979] ECR 461. 30 Article 6(3) of the Law No. 04/l-226 amending the Law No. 03/l-229 for Protection of Competition.
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2. Prevention the abuse of a dominant position
According to the LPC, the abuse of a dominant position held by one or more undertakings in the relevant market is prohibited, and especially the: 1.1. direct or indirect setting of unfair purchase or sale prices and other unfair trade conditions, respectively; 1.2. limitation of production, markets or technological development to the prejudice of consumers; 1.3. implementation of different conditions for similar duties with other enterprises, thereby placing them in a disadvantageous competitive position; 1.4. agreeing on contracts under the condition that the other contracting parties must accept additional obligations; 1.5. setting prices or other conditions, the objective or the result of which is to prevent market entry, or exclude certain competitors or one of their products from the relevant market; 1.6. the dominant company refusing access to its network or infrastructures by another enterprise, despite appropriate compensation, if such refusal prevents the other enterprise from acting as a competitor of the enterprise with the dominant position.
3. Identified cases on the abuse of a dominant position
The KCA has sanctioned the Company L.L.C. GEKOS for the abuse of its dominant position under the Law on Competition of 2004 (decision PA/ III/08/2010). An administrative sanction of 100,000 Euros was imposed by the Authority on L.L.C. GEKOS, after the KCA concluded that the offender was the only operator offering the sale, installation and maintenance of electronic fiscal devices in the entire territory of Kosovo. Under contract no. 1/10, it had sold its products through the enterprise Eternet under the logo Dukagjini- Eternet-Gekos. However, Eternet also sold products under the Dukagjini name, and ‘this was an action which is considered a concerted practice which is contrary to the law, and thus in this way it abused its dominant position’31. According to the decision of the KCA, L.L.P. GEKOS and L.L.P DUKAGJINI concluded a secret agreement for the sale of fiscal cash registers in the territory of the Republic of Kosovo. This agreement resulted in the creation of a dominant position in the market. As a result of the dominant
31 A description of a case can be found at: https://ak.rks-gov.net/repository/docs/Vendim_ arkat_fiskale_Gekos_Dukagjini.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES COMPETITION LAW IN KOSOVO: PROBLEMS AND CHALLENGES 119 position, prices of fiscal cash devices in Kosovo remained very high generating high costs for their purchasers. L.L.P. GEKOS was punished with 100,000.00 Euro for its sales of fiscal cash devices and creation of a dominant market position (monopoly) as well as the abuse of its dominant position in the entire market of the Republic of Kosovo. L.L.P. DUKAGJINI was punished with 100,000.00 Euro for the concerted practice that enabled L.L.P. GEKOS to create a monopoly in the relevant market and abuse its dominant position in the market of the Republic of Kosovo. At the same time, the Authority has recommended the Ministry of Finance to liberalize the above market and open it to other economic operators.
VI. Concentration of enterprises
1. Prohibited Concentrations
The union of independent enterprises can create an economic and legal situation which can seriously harm market competition. For this reason, the LPC has regulated situations when enterprises can legally join as well as the procedure for allowing such concentrations. According to Article 13 LPC, a ‘concentration of enterprises is created upon by installing permanent control through which is acquired: merging of two or more independent enterprises or parts of these enterprises; direct or indirect control or the influence of the dominating position of one or more enterprises or parts of enterprises; taking over the majority share or its part; taking over the majority of voting rights; in another way in the sense of the provisions of applicable laws and regulations. Gaining control according to Article 13(1) LPC takes place through the transfer of rights, contracts or other acts through which one or more enterprises, individually or jointly, while taking into account all juridical and factual circumstances of the case, gain decisive influence over one or more enterprises on a lasting basis. The creation of a joint venture by two or more independent enterprises, which works on a lasting basis as an independent economic entity, will be considered a concentration according to the LPC. In all cases of an intended concentration, enterprises are obligated to apply to the KCA for the concentration to be cleared and for the purpose of functioning of the same one. Approval can take place after the enterprises present the legal facts of the case foreseen by the law.
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After receiving the concentration notice, the KCA begins the procedure and evaluates the legality of the concentration. The Authority confirms the effects of the transaction on market competition and possible market entry barriers which would appear after the implementation of the concentration, especially if the operation creates a new dominant position or strengthens an existing one. Within the evaluation of the effects of a concentration, the KCA specifically confirms: • The structure of the relevant market, existing and potential competitors on the market in the territory of the Republic of Kosovo or abroad, the structure of demand and offer on the market including their trends, prices, risks, economic and legal obstacles, and other obstacles for entering or exiting the market; • Position, market participation and economic and financial power on the relevant market, level of competitive capability of the participants in the concentration, possible changes in their business and alternative supply sources for buyers arising as a result of the concentration; • The notified concentration’s effects on other enterprises or on consumers, short distribution routes, reduction of transportation costs, specialization in the production process, technological innovations, reduction of production or service costs as well as other advantages resulting from the execution of the concentration. The KCA is obliged to consult all enterprises, professional associations, employers’ association, the association for consumer rights and other individuals which are not party to the procedure, who were presumed to have knowledge about existing market relationships, in order for them to present their comments and opinions regarding the possible effects of the notified operation on their activities in the relevant markets. Enterprises which operate on markets upstream, downstream and neighbouring to where such concentration is to take place should also be consulted. The Authority will take a decision which will enable a notified concentration or which will put a stop to it. When the KCA refuses to permit a notified concentration, it will continue to track the situation of its intended participants and the market structure where they act. Concentrations that can harm competition are prohibited, especially if they results in the strengthening of a dominant position or creation of a new dominant position32.
32 Article 14 of the LPC.
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2. Practical example of concentration control
On 11 September 2012, the KCA permitted a concentration realized through the acquisition of 100% shareholders capital of the Kosovar Company for Distribution and Supply of Electricity (KEDS) by Kosovo Calik Limak Energy Inc.33. The company being acquired, the Kosovo Company for Distribution and Supply of Electricity (KEDS) was at that time fully owned by the Government of the Republic of Kosovo and held the legal status of a public enterprise. The acquirer, Limak Kosovo Calik Energy Inc., purchased 100% of the shares of Kosovar Company for Distribution and Supply of Electricity (KEDS) from the Government of Kosovo and asked the KCA to allow its union with Kosovar Company for Distribution and Supply of Electricity (KEDS). The Authority permitted the merger.
VII. State aid
According to Kosovo’s Law on State Aid, State aid can be defined as: any help that is given from State resources in whatever form, which includes but is not limited to: grants and subventions; reductions in taxes and their classification; remission of late payments and fines; remission of debts or covering losses; loan warranty or lending with a low interest rate; reducing liability of insurance companies; reducing the prices of offered goods and services, or selling State property below its market price, buying goods and services at a price exceeding the market price, in circumstances that are not acceptable for a private investor which operates under normal economical conditions34. State aid providers include all public bodies of local and central administration, public enterprises or authorities acting on behalf of the State that provide benefits to companies or particular sectors. Permitted aid includes: social aid given to consumers if there is no discrimination related to the origin of the products; aid provided in cases of damage caused by natural disasters or; aid for specific cases related to national security; de minimis aid (if its amount does not exceed thirty thousand (30,000) Euro over any three (3) year period) irrespective of the form of the aid or the purpose for which it is granted and, simultaneously, is not granted for export- related activities, it is not conditioned with the use of domestic products vis-à-vis those imported and the beneficiary is not an undertaking in difficulty.
33 https://ak.rks-gov.net/repository/docs/vendimi_3sq.pdf. 34 Article 3(1)(1) of the Law on State Aid – Law No. 04/-L-024.
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The Office of State aid operates within the structure of the KCA as an administrative unit responsible for the control of State aid in Kosovo. The Office is responsible for receiving, analyzing and monitoring reports and other data related to aid schemes and individual aid. It prepares reports on state aid and the decisions taken by the Commission. Kosovo’s law prohibits every aid given from State resources, given in any form whatsoever, which directly or indirectly threatens competition, while giving preferential treatment to certain enterprises for producing certain products. Even though Kosovo’s exiting legislation is compatible with EU standards, there are no cases so far of the law being implemented. This illustrates well the practical workings of the institutions assigned to enforce it. In this aspect, Kosovo’s institutions are in need of professional assistance from the EU for developing its enforcement capacities.
VIII. Research on competition law in Kosovo
A research project was conducted in April and May 2014 in Pristina, the Republic of Kosovo. The project’s respondents included companies in various economic fields operating in the Kosovo market. The purpose of the research was to assess their level of satisfaction with the LPC and its implementation by the KCA, to evaluate how much companies in Kosovo know about competition law, available source of information on competition law, the registration of cases which violate the LPC, and to evaluate the performance of the KCA. The research project was also meant to assess the positive impact of professional business organizations in Kosovo on compliance with competition protection rules. The survey polled a total of 20 business organizations. The survey consisted of a general part containing questions about the surveyed institution (such as its legal status and contact details) as well as 8 specific questions: 1) According to you, is competition a principle of: law, morality, both or other? 2) According to you, competition in Kosovo is held in accordance with the principle of fairness (loyalty): always, sometimes, rarely or never. 3) How aware are you of the legislation that protects competition: a lot, average, a bit, not at all? 4) What sources of information about competition protection legislation have you used: written or electronic media, data from the Ministry of Trade and Industry in Kosovo, sources of the Kosovo Competition Authority, as a business we were interested about the legislation.
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5) According to you, does the law applicable to the protection of competition in the Republic of Kosovo allow fair competition: always, sometimes, rarely, never? 6) According to you, which is the best institution to take care of the competition protection in the Republic of Kosovo: Economic Chamber of Kosovo, Kosovo Business Alliance, Kosovo Competition Authority, other? 7) Have you encountered situations in which competition law is violated to the detriment of your enterprise: often, sometimes, rarely, or never? 8) If you have information about a violation of the provisions of the Law on the Protection of Competition from any enterprise, do you inform the KCA: always, sometimes, rarely, or never? *Research done with companies in various fields operating in the Kosovo market
1. According to you is competition 2. According to you, competition in Kosovo is principle of: is held in accordance with the principle of Law fairness (loyalty) Moral Always Both Sometimes Other Rare 0% Never 20% 0% 0%
5% 35% 75% 65%
3. How much are aware of the legislation 4. What has been your source of information which protects competition? about the legislation of protection A lot on competition? Written or electronic media On avarage A bit From the Ministry of Trade and Industry in Kosovo None Kosovo Competition Authority 0% As business we were interested about the legislation
20% 30% 33% 48%
50% 14%
5%
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5. According to you, does the law applicable 6. According to you which institutions to the protection of competition in the the best take care for the protection of Republic of Kosovo allow fair competition? competition in the Republic of Kosovo?
Always Economic Chamber of Kosovo
Sometimes Kosovo Business Alliance
Rare Kosovo Authority of Competition Never Other 0% 5%
15% 20%
55% 10% 30% 65%
7. Have you encountered situations in which 8. If you have information about a violation competition law is violated to the detriment of the provisions of the law on protection of your enterprise? of competition from any enterprise, do you inform the competent authority? Always Always Sometimes Sometimes Rare Rare Never Never
15% 20% 30% 30% 25% 40% 20% 20%
The research results have shown that commercial companies have information about the LPC mainly from print or electronic media and that competition protection legislation provides a good basis for the development of fair competition in Kosovo. According to the respondents, the KCA takes care of competition protection in the country, even though the number of cases dealt with by the Authority is minimal. Despite the fact that businesses have encountered cases of competition law violation to the detriment of their firm, most are reluctant to notify them to the Authority.
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IX. Conclusion
Competition law is an important aspect of the economic wellbeing of the free market. As such, it deserves special attention from State institutions. Considering the history and unique circumstances of the Republic of Kosovo, its competition law cannot be considered in isolation from the overall development of its legal, economic and political system. The paper made it clear that Kosovo, despite being a very new country with no contractual relations with the EU as of yet, has made great efforts in shaping its legal system to be in accordance with the requirements of the EU accession process. Part of fulfilling such legal criteria is also its Law on the Protection of Competition, adopted by the Kosovo Assembly in 2010. The LPC protects the market while hindering orchestrated, anti-competitive actions undertaken by private entities. The Kosovo Competition Authority is the institution responsible for the supervision and implementation of the LPC. The KCA has extensive powers, its main role being the enforcement of the LPC. Although the activity of the Authority has been fluctuating, it can nevertheless be generally concluded that the KCA has so far failed to accomplish the mission for which it was established. Since its founding in March 2009, very few cases of punitive measures taken by the KCA can be identified here in comparison to the far larger number of LPC allegations that are being made in the Kosovo market. The KCA has thus failed to withstand the various political pressures exercised upon its work. As a result, it is fair to say that many companies have violated the LPC in Kosovo, and yet the KCA has not held them accounted for it. Despite efforts, competition law in Kosovo is at the initial stage of its development. It faces a number of problems and challenges. Kosovo’s competition law can be viewed from a legal, economic and institutional perspective. Positive and negative sides can be identified in each area. Considering the legal perspective first, the positive features of Kosovo’s competition law include the fact that it is modern and in line with EU requirements. Moreover, its legal provisions have been designed in an understandable language and several administrative guidelines for its implementation have already been approved. On the negative side, Kosovo’s competition law is not being implemented in the right manner or volume. Considering the economic perspective next, the only positive feature that can be identified here is that a climate of trust exists in Kosovo that its competition law will be implemented and will benefit businesses. On the negative side, Kosovo’s competition law is not applied in practice and has not realized its
VOL. 2015, 8(11) 126 ORHAN M. ÇEKU goal of providing the country with a decent level of competitiveness. Moreover, legislation has proven unable to eliminate state monopolies (exclusive licenses granted by the State to certain enterprises, price fixing in the insurance field set by the Central Bank of Kosovo, etc.). Finally, enterprises have been convicted of infringing competition rules in a selective manner. Considering the institutional aspect of Kosovo’s competition law, the establishment of the KCA is certainly a positive outcome, as is the fact that the Authority has developed investigative procedures and punished at least some of the offending companies. It is also to be commended that Kosovo’s institutions are to adhere to the practice of the Court of Justice of the European Union and of the European Commission when it comes to the implementation of the Law on State aid. Among the negative institutional features of Kosovo’s competition law system is the fact that the impact of political circles on the KCA has been substantial. The KCA lacks human capacity for performing its professional duties and the members of the Competition Commission have little experience in implementing the LCP. It seems that the activities of the KCA are dominated by corruption and that other abuses of official duty are taking place. This observation derives from the fact that the Authority has repeatedly failed to prosecute well known competition law breaches, even in cases clearly identified by the business community, the media, and civil society experts. Among the challenges facing Kosovo’s competition law system lays the selection and appointment of the members of the Competition Commission, which must be based on high moral credibility and proven expertise in this field. Political pressures on the work of the Authority must be removed and cooperation strengthened with other institutions, the business community at large, experts in different fields and the civil society, etc.. Improving the performance of the KCA by employing professional administrative staff is also necessary. Fighting collusion that disturbs market competition in Kosovo, through both companies and associations, must become a priority. The imposition of maximum penalties for companies that abuse their dominant position remains a challenge as does more widespread control of concentrations (Kosovo has very few concentration cases). Existing problems include also market liberalization and increasing the number of economic operators in areas currently monopolized by the State (mobile telephony, fiscal cash registers, etc.). State aid control must increase and any future changes to the LPC should consider the recommendations of the business community. In order for Kosovo’s competition law system to develop, the involvement of the judiciary is essential. Competition cases must thus undergo judicial review and yet so far, very few such cases have been referred to ordinary courts.
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Literature
Drakulic M., Osnovi Poslovnog Prava [Introduction to Trade Law], FOM, Bg. MST Gajic, 1993. Hetemi M., Disa Tema Aktuale të Ekonomisë së Tregut [Some actual themes of Economic Trade], Pristina, 2005. Kabashi S., Asllani G., Konkurrenca dhe e Drejta e Konkurrencës [Competition and Competition Law], Pristina 2012. Nourissat C., E drejta e Biznesit e Bashkimit Evropian [Business Law of European Union], Papirus 2012.
VOL. 2015, 8(11)
Review of Ten Years of Albanian Competition Law Developments
by
Ermal Nazifi*, Petrina Broka**
CONTENTS
I. Introduction II. Towards the first law on competition III. The Law on the Protection of Competition of 2003 1. Introduction 2. The Albanian Competition Authority 3. Market supervision 4. The activity of the ACA 5. Private Enforcement 6. Anticompetitive practices 6.1. Agreements 6.2. Abuse of a dominant position 6.3. Merger control IV. Conclusions
Abstract
Albania was one of the last countries in Europe to adopt a free market economy after suffering from one of the worst dictatorial communist regimes in the world. In order to succeed in its efforts to establish a free market economy, Albania needed to undertake a set of reforms to modernize its economy in order to cope with the new reality of global markets and Euro-Atlantic integration. An important aspect of these reforms is also the implementation of a competition law in line with the acquis an its effective implementation. A lot has been achieved in the last ten years but there is a lot to be done still in order to facilitate a competitive economy able
* Ermal Nazifi, LL.M., Ph.D. Candidate, University of Tirana; [email protected]. ** Petrina Broka, LL.M., Ph.D, Lecturer Law Faculty, University of Tirana; [email protected].
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to cope with Albania’s EU integration. The work of the ACA is only one aspect of this process, but it is of utmost importance for the development of the national economy and successful EU membership.
Résumé
L’Albanie est l’un des derniers pays de l’Europe à adopter l’économie de marché libre après avoir souffert d’un des pires régimes communistes dictatoriaux dans le monde. Afin de réussir dans ses efforts pour établir une économie de marché libre, l’Albanie devait entreprendre une série de réformes pour moderniser son économie et faire face à la nouvelle réalité des marchés globaux et l’intégration euro-atlantique. Un aspect important de ces réformes est aussi l’introduction des règles du droit de la concurrence en conformité avec l’acquis communautaire et sa mise en œuvre efficace. Beaucoup a été accompli au cours des dix dernières années, mais il y a encore beaucoup à faire afin de faciliter une économie compétitive, capable de faire face à l’intégration européenne de l’Albanie. Le travail de l’ACA ne est qu’un aspect de ce processus, mais il est crucial pour le développement de l’économie nationale et la réussite du processus d’intégration à l’UE.
Classifications and key words: abuse of dominance; Albania; Albanian competition authority; anticompetitive agreements; competition law and policy; merger review, private enforcement.
I. Introduction
Albania was one of the last countries in Europe to adopt a free market economy after millennia of tumultuous history. In the beginning of the 1990s, Albania finally emerged from one of the worst dictatorial communist regimes in the world with a centrally-planned economy at the core of its superstructure. According to the World Bank, Albania’s GDP per capita was less than 330 US dollars in 19921, making it one of the poorest countries in the world. In order to succeed in its efforts to establish a free market economy, Albania needed to undertake a set of reforms to modernize its economy in order to cope with the new reality of global markets and Euro-Atlantic integration. An important aspect of these reforms was the approval of its first Law on Competition (hereafter, LoC) in 19952. The LoC contained provisions against unfair competition, anti-competitive agreements, abuse of dominance, merger
1 Available at: [http://data.worldbank.org/indicator/NY.GDP.PCAP.CD?page=4]. 2 This is not the first law on competition in Albania, if ancient and medieval history is taken into account. Legal acts such as Lex Iulia de Annona (year 18 A.D.?) Diocletian’s, (301 A.D.),
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES REVIEW OF TEN YEARS OF ALBANIAN COMPETITION LAW DEVELOPMENTS 131 control, etc. It included public enforcement as well as private enforcement rules and criminal penalties in cases of severe damages caused to health and/ or property. Unfortunately, its implementation was not successful in practice. This, in part, was also due to the severe economic crisis and civil unrests that Albania had to face after the fall of pyramid schemes in 19973. In order to cope with the new economic reality as well as the EU integration process, a new law was approved by the Albanian Parliament (Kuvendi) in 2003. The Law on the Protection of Competition4 (hereafter, LPC) was mostly in line with latest EU standards and practices. In March 2004, the Albanian Competition Authority (hereafter, ACA) issued its first decision starting a new and exciting era in the field of competition law developments in Albania. A lot has been achieved in the last ten years but there is a lot to be done still in order to facilitate a competitive economy able to cope with Albania’s EU integration. The work of the ACA is only one aspect of this process, but it is of utmost importance for the development of the national economy and successful EU membership.
II. Towards the first law on competition
Competition law should be considered as one of the cornerstones for building a free market economy from the ashes of a communist regime. Most of the countries of Central and Eastern Europe, as well as of the former Soviet Union, adopted competition laws in the period between 1990-19965. Albania joined the ‘club’ in 1995 when risks related to anti-competitive practices started to become evident on the national market6. Albania’s first Law No. 8044 on Competition was approved in December 1995. The LoC included provisions on monopoly, dominance, cartel agreements, mergers and unfair competition. The enforcement of the LoC was assigned to the Directorate on Economic Competition, part of the Ministry of
Edictum De Pretiis Rerum Venalium, etc., can be seen as precursors of modern competition law and they were also implemented in the Albanian territories. 3 For a historic account of the Albanian economy after the fall of communism, see generally: T. Redek, F. Memaj, J. Prašnikar, D. Trobec, Albania: The Role of Intangible Capital in Future Growth, Ljubljana, 2012. 4 Law on the Protection of Competition no. 9121 of 28 July 2003, Official Gazzette: Viti 2003, No. 71, p. 3189. 5 Available at: http://www.oecd.org/daf/competition/prosecutionandlawenforcement/ 39990968.pdf. 6 Albanian Competition Authority, National competition policy, Tirana 2006, p. 13.
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Trade and Tourism7. The object of the LoC was to define the rules of market players, as well as rights and obligations under the conditions of fair and just competition8. The LoC regulated the rights and duties of both undertakings and consumers. However, several important industry sectors such as telecommunications, insurance, agriculture, etc. were excluded from the scope of its application9. The LoC was a very positive step towards the establishment of a free and competitive economy in Albania. Unfortunately, it did not prove effective in practice and remained mostly on paper10.
III. The Law on the Protection of Competition of 2003
1. Introduction
The stagnation in the implementation of Albania’s competition law was criticized by the European Commission in its EU integration progress report of 200311. What the Commission said in this important summary of Albania’s developments so far was that new legislation was needed as well as an independent institution in charge of its implementation. A deep reform of Albanian competition law and policy was increasingly necessary so that it could be used to further the economic development of the country. Having a competition regime similar to European acquis as well as effective enforcement mechanisms is certainly of utmost importance for Albania’s EU accession. Against this backdrop, the new Law no. 9121 on the Protection of Competition was approved in 2003 (hereafter, LPC). The protection of free and effective competition is thus the main object of the LPC. For that purpose, the LPC established a competition authority, the ACA, responsible for its enforcement as an independent public body with broad powers concerning the implementation of the law.
7 Decision of Albanian Council of Ministers no. 248, of 14 June 1997, on the functioning and organization of the Directorate on Economic Competition. 8 Art. 1 LoC. 9 Albanian Competition Authority (hereafter, ACA), National competition policy, Tirana 2006, p. 13. 10 See e.g.: T. Baleta, N. Kallfa et. al., Dominimi i tregut bankar shqiptar’ (Dominance of the Albanian banking market), Bank of Albania, Tirana 2000. 11 Commission of the European Communities, Albania Stabilization and Association Report 2003, page 23; available at: http://eeas.europa.eu/delegations/albania/documents/eu_ albania/2003_progress_report_en.pdf (4 May 2014).
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One of the major differences between the LPC and the LoC is the fact that unfair competition clauses are no longer included in the LPC – their regulation is left to other institutions in their respective fields of work, such as consumer protection12, intellectual property13, metrology and calibration14, etc. Parties that have suffered from an unfair competition practice can also address the courts directly15. There are no longer any exemptions from the applicability of the LPC – it covers all sectors of the economy, private and public undertakings, as well as undertakings that operate in sectors of general economic interest (SGEI’s)16. Furthermore, the LPC is applicable to undertakings that operate outside the territory of Albania, provided their behaviour affects the domestic market. An important feature of the LPC is that the protection of free and effective competition is considered an important aspect of constitutional economic principles enshrined in Article 11 of the Albanian Constitution17 – in fact, Article 11 of the Albanian Constitution is specifically mentioned in the LPC’s Preamble. This kind of legal drafting, that is, mentioning constitutional principles in the preamble of another legal act, is very rare; preambles usually only mention procedural articles of the constitution, or articles that are directly relevant to the given legislation (such as laws that regulate the activity of constitutional institutions etc.).
12 Law no. 9902 of 17 April 2008 on Consumer Protection (Official Journal no.61); available at: http://www.kmk.al/pdffiles/Ligji%20per%20Mbrojtjen%20e%20Konsumatoreve%20Nr%20 %209902.doc. 13 Law no. 9947 of 7 July 2008 on Industrial Property” (Official Journal no. 121), available at: http://www.alpto.gov.al, as well as the Law no. 9380 of 28 April 2005 on the Copyrights and Other Related Rights (Official Journal no. 42, pages 1493); available at: http://zshda.gov. al/wp-content/uploads/2014/05/LIGJI-NR-9380-DATE-28-04-2005-PER-TE-DREJTEN-E- AUTORIT-DHE-TE-DREJTAT-E-TJERA-TE-LIDHURA-ME-TE.pdf. 14 Law no. 9875 of 14 February 2008 on metrology (Official Journal no. 27); available at: http://dpm.gov.al/images/stories/DPM/legjislacioni/Ligji_per_metrologjine.pdf. 15 Provisions on unfair competition are foreseen in the Albanian Civil Code. 16 Article 2 LPC. 17 Article 11 of the Albanian Constitution, which states that: 1. The economic system of the Republic of Albania is based on private and public property, as well as on a market economy and on freedom of economic activity. 2. Private and public property is equally protected by law. 3. Limitations on the freedom of economic activity may be established only by law and for important public reasons.
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2. The Albanian Competition Authority
The absence of a stable and independent institution in charge of the enforcement of the LoC in practice was seen as one of the reasons for the failure in its overall implementation process. The LPC created a new institutional framework for an efficient enforcement of its provisions – an independent public entity, the Albanian Competition Authority (in Albanian: Komisioni i Konkurrencës). The ACA encompasses the Competition Commission, its decision-making body, and the Secretariat of the ACA, the body in charge of market supervision and investigations. The Parliament elects the members of the Competition Commission while the employees of the Secretariat are elected based on civil service procedures. The Chair of the Commission is voted separately by the Parliament after being elected as a member of the Commission. One member of the Competition Commission is proposed by the President of Albania, two by the Council of Ministers and the remaining two are proposed by the Parliament. This rule aims to ensure a politically independent and balanced institution. Candidates for the Competition Commission must fulfil a set of criteria including: at least 15 years work experience and academic experience either as a lecture or holding at least a doctorate degree in economics or law (private or administrative law). Finding suitable candidates to fulfil these requirements has not been easy, and so the Competition Commission has for a long time been functioning with only 4 members. The work experience criteria may be an unnecessarily heavy burden here, which keeps away young professionals and academics that might specialize in competition law or industrial economics seeing as this is a very new subject in Albanian Universities. This also explains the lack of research, articles and publications on Albanian competition law and policy. The authority’s two-tier structure, separating investigative and decision- making functions, assures fair process for the parties. The Competition Commission can make a decision only after providing the investigated parties with the possibility to be heard. This is yet another major guarantee of fair process. This way, the Commission acts as a quasi-court, judging on the arguments and evidence provided by the Secretariat, on the one hand, and the parties, on the other. ACA decisions can be reviewed by the Administrative Court of First Instance of Tirana, which decides both on the merits and on procedural aspects of the cases. Furthermore, the work of the ACA is monitored by the Albanian Parliament together with other independent bodies. Its monitoring is carried out by the Monitoring of Independent Institutions Unit and the Parliamentary Commission of Economy and Finance when the Authority reports on a yearly basis. The Parliament issues a yearly Resolution
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES REVIEW OF TEN YEARS OF ALBANIAN COMPETITION LAW DEVELOPMENTS 135 on the Activities of the ACA, which is subject to plenary discussions. No other body, be it the government or specific ministries, has any power over the decisions of the ACA. Anyone can submit a complaint concerning any issues related to competition law. However, investigations can also be launched ex officio assuring a proactive role of the ACA. Recently, most of the ACA’s work is based on addressing complaints about anti-competitive practices coming from businesses or individuals. This shows that Albanian competition culture is improving, as is the trust of the public and of the business community in the competition law enforcement mechanism. The number of complaints submitted to the ACA in 2012 was almost twice as high as in 201118. A positive trend continued in 2013 but the number has decreased compared to 201219. The Parliament’s resolution on the activities of the ACA, as well as other concerns identified by the MP’s during plenary discussion on its yearly report, are important tools for starting investigations or monitoring markets also. For example, in the Resolution on the evaluation of the ACA’s activity for 2013, the Parliament specifically asked the authority to strengthen its enforcement activities in sectors such as: mobile telecommunications, insurance, energy and government concessions that have granted monopoly or exclusive rights20. However, there are also many complaints received from ACA that do not fall under the scope of the LPC. This shows that the authority is perceived as a trusted institution on one hand, but more efforts should still be devoted to increasing Albanian competition culture.
3. Market supervision
The ACA is empowered to supervise the market behaviour of undertakings looking for anti-competitive practices (ex-post). Within its merger control activities, it aims to prevent the creation of market structures that may cause abuse of dominance or facilitate collusion. Advocacy is another statutory duty of the ACA. It cooperates with other State institutions and provides a ‘regulatory impact assessment’ of other
18 ACA, 2012 Annual report and main goals for 2013, Tirana 2013, p. 6-7 (available at: http:// www.caa.gov.al/uploads/publications/Annual_Report_2012-2013.pdf; last visited on 9 September 2013). 19 ACA, 2013 Annual report and main goals for 2014, Tirana 2014, p. 5 (available at: http:// caa.gov.al/uploads/publications/Raporti_Vjetor_2014_-_Autoriteti_i_Konkurrences.pdf). 20 Albanian Parliament, Resolution for the evaluation of the activity of the Competition Authority for 2013, p. 3.
VOL. 2015, 8(11) 136 ERMAL NAZIFI, PETRINA BROKA laws and/or normative acts from the point of view of competition law. The Competition Commission has approved a guideline for the evaluation (within their drafting process) of draft-acts that might impede market competition21. It is aimed to avoid anti-competitive measures such as granting of exclusive and special rights to certain undertakings, raising barriers of entry, limiting consumer choice, etc. The ACA has several tools for market supervision. • Bringing an anticompetitive practice to an end. • Issuing temporary injunctions in order to stop an undertaking from continuing an allegedly anti-competitive practice. • Recommending public bodies to improve their legal framework and/or practice in order to avoid anti-competitive behaviours or promote a more competitive environment. • Imposing fines on companies and individuals that are involved in anti- competitive practices. • Ordering structural and/or behavioural remedies, etc.
4. The activity of the ACA
In the 10 years of its functioning, the ACA has issued more than 300 decisions.
Table 1. Number of decisions issued by the ACA (2003–2013)
Number of decisions of the ACA Cartels 14 Abuse of Dominance 10 Mergers 72 Other* 205 TOTAL 301 * This includes decisions on recommendations to public bodies, several procedural issues, approval of laws and bylaws, etc. Source: 2013 Annual Report22.
21 Decision of the ACA, no. 68 of 24 December 2007, on the approval of the guideline on the evaluation of the effects of the legislation on competition, Official Bulletin 2007, no. 2, p. 72. 22 ACA, 2013 Report and Main Goals for 2014, Tirana 2014, p. 52 (available at: http://caa. gov.al/uploads/publications/Raporti_Vjetor_2014_-_Autoriteti_i_Konkurrences.pdf).
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These decisions have been issued in sectors very important for both the economy and consumer including: finance, telecommunications, energy, access to infrastructure, public transportation, bread, wheat, etc. Considering these statistics, it can be argued that the ACA has managed to do much to safeguard free and effective competition. The authority has indeed received a lot of positive feedback from EU institutions, the Albanian Parliament, Consumer associations, etc. However, it can also be argued that the ACA has not issued many decisions on key competition issues, that is, cartels and the abuse of dominance. This situation can be attributed to different factors such as: lack of competition culture, general lack of trust toward public institutions in Albania, problems with the enforcement of decisions, an inefficient judicial review process, general economic and political situation, etc. This area needs serious research, through questionnaires and interviews with both the business community and the general public, which is currently lacking. In total, the ACA has imposed around 8 million Euros of fines on companies found in breach of the LPC. This is a considerable amount considering the size of both the Albanian economy and of the fined undertakings. However, only 25% of this sum has in fact been collected by judicial enforcing services23 since collection can only take place after a final ruling of the court is delivered. Judicial review is one of the biggest challenges faced by the ACA. Competition law is a novel legal field in Albania and its study is only just begging. There are no specialised courts or judges in the field of competition law. In practice, while many important ACA decisions have found judicial confirmation, several other cases were quashed. In many of the quashed decisions, the reasoning of the court was not very clear about why it believed that a given practice had not constituted an anti- competitive behaviour, or what would be the necessary evidence to prove the infringement. The ACA has stated in its 2012 report that: ‘It is vital to the good functioning of the markets – which, in simpler words means increased consumer wellbeing – that the justice system absorbs and conveys the philosophy of competition protection in the fairest manner possible. Not only is the reasoning of decisions in the light of the protection of public interest a legal obligation under the law, but also, and above all, it is a moral duty since it affects the wellbeing of the citizens’24.
23 ACA, 2013 Report and Main Goals for 2014, Tirana 2014, p. 57. 24 ACA, 2012 Report and Main Goals for 2013, Tirana 2013, p. 4.
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5. Private enforcement
Private enforcement of competition law in Albania was first introduced in the LoC of 199525. Despite the fact that the possibility to claim damages based on an anti-competitive practice has existed in for 19 years already, private enforcement is still totally undeveloped in Albania. Private enforcement of competition law was included in the LPC26 of 2003. Article 65 LPC gives a person impeded in his/her activity by way of a prohibited agreement or an abusive practice the right to lodge an action before the court. He/she can request a) the removal or prevention of a competition restricting practices which might be/is carried out in contradiction to these articles. He/ she can also request b) reparations or compensations of damages caused, in accordance with relevant provisions of the Civil Code. Such persons can address the court even if the ACA has started its own investigation procedure concerning the same practice. Compared with its predecessor, the LPC regulates better the question of jurisdiction – Tirana Court of the First Instance is now the court competent to hear all private damages claims related to anti-competitive practices in Albania. This new rule avoids problems in choosing a competent court for those that have suffered damages from an anti-competitive practice27. The new solution ensures also better judicial performance, since it is easier to train a limited number of judges (single court) in competition law and European jurisprudence in this area. Interestingly, the LoC provided that professional associations of competitors, suppliers, consumers and other purchasers can claim damages. This possibility is no longer available under the current legal framework. This is a major obstacle for the effectiveness of private enforcement of competition law in Albania. According to the provisions of Albanian Code of Civil Procedure: ‘a person may start a lawsuit on its behalf for the protection of a right of a third party only if it is allowed by the law’28. The LPC provides this possibility only for persons that have suffered damages from an anti-competitive practice.
25 Private litigation was first regulated by part VII of the LoC, specifically the articles 62, 63 and 64. 26 Law no. 9121 of 28 July 2003 on Competition Protection (Official Journal no. 71). 27 For problems arising for the competent court see: M. Carpagnano, ‘Private Enforcement of Competition Law Arrives in Italy: Analysis of the Judgment of the European Court of Justice in Joined Cases C-295-289/04 Manfredi’ (2006) 3(1) The Competition Law Review 47–72. 28 Article 95 of the Albanian Code of Civil Procedure (unofficial translation from the authors).
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According to Article 54 of the Law on the Protection of Consumers29, consumer association may address the court if consumer rights were breached. It should be noted, however, that consumer organizations that may address the court, by a representative action for the protection of consumer rights, are only entitled to request the ceasing of the violation of the infringed rights by the company. They cannot request compensation of damages. So even in this case, there is no mechanism that enables collective redress for damages. This possibility should be granted to consumer protection associations as soon as possible to enable them to seek compensation for damages suffered from consumers, including damages caused by anti-competitive practices. In so doing, the impact of these actions for consumer rights protection will be greater – assuring better protection as well as greater deterrence. In the above context, the lack of legal mechanisms for collective redress for damages suffered from anti-competitive behaviors is an important factor that has influenced the failure of private enforcement in Albania. This is because most of the victims of anti-competitive practices are consumers, which have neither the interest nor the ability to individually sue the infringers (which profit from this state of affairs). In order to improve the current situation, there is an urgent need to amend Albanian legislation by drafting it in accordance with EU acquis and to implement it properly. Several changes in material and procedural aspects of Albanian competition law need to be made that will facilitate actions for damages in line with the Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competition law provisions of the member states and of the EU and related initiatives30. It is also important to inform and raise awareness of all stakeholders, including businesses, consumers and public institutions that might have been or can suffer damages from an anti-competitive practice. This is not only a matter of law, but also of mentality. Enhancing private enforcement will be one of the most important challenges that Albania has to face to further improve the implementation of its competition law.
29 Law no. 9902 of 17 April 2008 on Consumer Protection (Official Journal no. 61). 30 See the text of the directive but also Commission Recommendation of 11 June 2013 on common principles for injunctive and compensatory collective redress mechanisms in the Member States concerning violations of rights granted under Union Law, and the Commission’s Communication on quantifying harm in antitrust damages actions; available at: http://ec.europa. eu/competition/antitrust/actionsdamages/documents.html.
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6. Anticompetitive practices
6.1. Agreements
6.1.1. General remarks
The LPC focuses on: anti-competitive agreements, abuse of a dominant position, and merger control. The fight against anti-competitive agreements is one of the key priorities of the ACA. According to the authority, such behaviour harms social well-being, can cause inefficiencies, and transfer benefits from consumers to the parties of the agreement31. The material provisions of the LPC are in line with European acquis and give a non-exhaustive list of examples of anti-competitive agreements32, that is, behaviours which are considered illegal33. When discovered, the ACA may stop such practices34 and impose high fines on the undertakings involved35. The LPC allows also for individual36 and block37 exemptions and contains a de minimis rule38, albeit these exemptions do not apply to hard-core cartels. The Albanian Competition Authority has approved a leniency program as well, but the there have not been any applications yet. There was only one application for leniency but the ACA receive a leniency application, yet the after looking at the issue, decided that that there was no room for starting an investigation. Albania does not yet have any provisions on settlements such as those used in the EU39. However, such rules can be easily introduced into
31 E.g.: ACA, 2012 Annual report and main goals for 2013, Tirana 2013, p. 17, available at: http://caa.gov.al/uploads/publications/Raporti_Vjetor_2012-2013.pdf. 32 Article 4 LPC. 33 Ibidem. It should be noted that the Albanian law is in line with the relevant acquis (Article 101 of the Treaty on the Functioning of the European Union). The nullity can be raised by the interested parties or ex officio from the Authority and/or the courts. The effects are ex tunc (from the outset). 34 Article 45 LPC. 35 Part VI of the LPC on sanctions as well as the regulation on fines and leniency; available at: http://caa.gov.al/uploads/laws/Regulation%20On%20Fines%20and%20Leniency.pdf. 36 Article 5 LPC, as well as Guideline on the form of the notification of the agreements; available at: http://caa.gov.al/uploads/laws/guideline%20for%20notification.pdf. 37 Article 6 LPC. The Commission has also approved several block exemptions (specialisation agreements, Research and Development, Technology transfer block exemptions, etc.). For more information see the website of the Competition Authority (www.caa.gov.al). 38 Article 7 LPC and decision of ACA no. 203 of 8 November 2011, Regulation on Agreements of Minor Importance, Official Bulletin 2011 no. 7, p. 176; available at: http:// caa.gov.al/uploads/laws/Regulation%20on%20agreements%20of%20minor%20importance.pdf. 39 See in general about this topic: F. Laina, E. Laurinen, ‘The EU Cartel Settlement Procedure: Current Status and Challenges’ (2013) Journal of European Competition Law & Practice.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES REVIEW OF TEN YEARS OF ALBANIAN COMPETITION LAW DEVELOPMENTS 141 the national legal system since the ACA has the power to issue secondary legislation.
6.1.2. ‘Naïve’ cartels
An interesting feature of Albania’s experiences in the fight against anti- competitive agreements are so-called ‘naïve’ cartels, where multiple companies proved unaware of the existence of competition law. In those cases, not only did the participants get together fixing prices and other sales conditions, they did so publicly or even announced it in the media. These types of phenomena were observed in different regional bread production markets as well as in the ready-mixed concrete market in Tirana40. It was observed during the ACA’s investigations, that most of the undertakings operating in the investigated markets, usually regional ones, got together to fix their prices, in some cases under the umbrella of a non-formal business organisation41.
6.1.3. Concerted practices
The ACA has also investigated several cases of concerted practices42. The Atlas/Bloja case concerned two companies operating in the market for the import of wheat and the production of flour destined for bread production. The authority discovered that the two investigated undertakings were sharing information about joint imports, prices, quantities, taxes, customs duties, etc.43. While the concerted practice was in operation, the two companies applied also the same prices, or changed them by the same level. This behaviour was considered a concerted practice and both companies were fined44.
40 In the case of the concrete practice case, the companies were fined for failing to comply with the ACA’s request for information. 41 See the decisions of ACA in the bread market in Fier, Korce and Vlora, as well as in the ready-mixed concrete market in Tirana. See E. Nazifi, P. Broka, ‘Fighting Cartels ‘Albanian Style’: The Practice of the Albanian Competition Authority against Anticompetitive Agreements’, International Masaryk Conference for Ph.D. Students and Young Researchers 2013 Proceedings. 42 Article 3 LPC defines agreements as ‘agreements and/or concerted practices of two or more undertakings, and the decisions or the recommendations of associations of undertakings, regardless their form, in written or not, or their binding force’. 43 Decision of ACA, no. 125 of 8 October 2009 on imposition of fines into the enterprises ‘Atlas’ Sh.a and ‘Bloja’ Sh.a for restriction of competition in the wheat import and flour production and sales market’, Official Bulletin 2009, no. 5, p. 115; available at: http://caa.gov. al/uploads/decisions/Decision%20125.pdf. 44 Both undertakings have appealed this decision to the Tirana Circuit Court, which has decided in both cases to quash the decision of the ACA. It seems that the court has not been
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6.1.4. Bid rigging
It has been calculated that the in cases of bid rigging prices are about 5–10% higher than the competitive price45. The ACA investigated several bid rigging cases concerning procurement of new vehicles and guarding and security services46. The ACA has discovered that there were clear signs of cooperation in the rigged tenders starting with similar typos in the tender documents; the use of joint staff and shared offices/other premises; supporting documents such as insurance or court clearances being obtained at the same time. This cooperation in the phase of the preparation of the tender documents was followed with offers very close to the maximum available funds in cases where only the riggers participating in the bid; prices were lower when other undertakings were taking part in the tender as well. The ACA found also cases of subcontracting or purchasing from a direct competitor in the tender.
6.2. Abuse of a dominant position
6.2.1. General remarks
Smaller economies like Albania usually have high concentration levels in many of their industry sectors – they are more prone to experience monopolies, oligopolies and dominant undertakings in sectors such as energy, telecommunications, postal services, transportation, etc. Dominance has often been inherited from privatized state monopolies of the communism era. On occasions, such problems arise because of the granting, by the government, of exclusive rights to undertakings in order to develop or improve certain services (for example: port services or technical control of vehicles). The provisions of the LPC are in line with the European acquis. As such, holding a dominant position or monopoly is not forbidden in Albania but the abuse of such position is. The LPC sets out a list of anti-competitive very clear in in analysing evidence submitted by the ACA and why it was not sufficient to uphold its decision. See in general: P. Broka, ‘The Court of Appeals of Tirana upholds the District Court’s judgment quashing the NCA decision concerning a concerted practice case in the markets for wheat import and production of flour (Atlas/Bloja)’ (20 April 2012) N° 49031 e-Competitions Bulletin. 45 OECD, Collusion and Corruption in Public Procurement, Paris 2010, p. 57. 46 OECD, Guidelines for Fighting Bid Rigging in Public Procurement, Paris, 2009, p. 1. The OECD has defined bid rigging as: ‘Bid rigging (or collusive tendering) occurs when businesses, that would otherwise be expected to compete, secretly conspire to raise prices or lower the quality of goods or services for purchasers who wish to acquire products or services through a bidding process’.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES REVIEW OF TEN YEARS OF ALBANIAN COMPETITION LAW DEVELOPMENTS 143 exploitative and exclusionary abuses. It also contains provisions on joint dominance. In order to determine the dominant position of an undertaking, elements such as: market share, barriers to entry, potential competition or countervailing power of buyers/customers are taken in consideration47. Therefore, the ACA should firstly analyze if the company has a dominant position, and then if that position was/is in fact abused.
6.2.2. Mobile telephony
The ACA has investigated several abuse of dominance cases. One of the most important investigations in this field concerned the mobile telecommunications market. The authority imposed a fine of around 5 million USD on AMC and Vodafone Albania, both mobile carriers operating in Albanian at that time. The authority found that these two companies held, between 2004-2005, a joint dominant position. The ACA also established that they charged unfair prices – prices much higher than the prices of the same product in similar market conditions, and much higher than the costs incurred by the two operators. The decision of the ACA was upheld by both the District Court of Tirana and the Court of Appeals. It is, however, still under judicial review waiting for a hearing before the Supreme Court of Albania. Since then, the ACA had started another investigation of the mobile telephony market for an alleged abuse by one of the current operators, Vodafone Albania. The investigation focused on the fact that Vodafone Albania offered very cheap calls to a group of its clients called Vodafone Club (on-net tariffs) offering, at the same time, expensive calls to non-Club clients and clients of other carriers (off-net tariffs). Vodafone offered also bonus packages to customers of other operators if they transfer their numbers to Vodafone; such packages were not available to new customers nor to existing customers of the same tariff plan. Ultimately however, this case was closed without the ACA finding that an infringement occurred. The case was later appealed by the complainant Plus SHA, the 4th and smallest operator in the Albanian telephony market. In the 2014 Resolution concerning the ACA’s activities in 2013, the Albanian Parliament asked the authority for more intervention into the mobile communications market in cooperation with the Electronic and Postal Services Authority.
47 Article 8 LPC.
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6.2.3. The ARMO Case
Another important case concerned the market for the production and sale of D2 petroleum. The ACA has found that the sole producer of this type of fuel in Albania, ARMO, held a dominant position in this market after an import ban had been imposed by the Albanian government. During this period, ARMO charged different prices to different undertakings for similar quantities of the same fuel. By doing so, it favored their own vertically integrated company that was active in the retail market of D2 petroleum. This behavior was considered an abuse of its dominant position because of the application of dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage.
6.2.4. Romano Port Case
In another abuse decision, the ACA fined Romano Port, the operator of port facilities for the loading and unloading of LPG. Romano Port is one of the two operators allowed to offer such services in the territory of Albania. In the case at hand, Romano port had not allowed the unloading of LPG by two specific undertakings. The company justified its refusal by saying that these two companies did not have all the permits necessary to use their depots, which were connected to the port facilities. However, according to the rules of the operation of the port, those permits were not part of the set of documents that the port operator was required to review. Furthermore, Romano Port had allowed other undertakings to unload their products without asking for such permits. The reason behind Romano Port’s behavior was vertical integration in the market of LPG import by its subsidiaries. Again, this behavior was considered by the ACA as an abuse of dominance because of the application of dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage. The ACA has looked into this market once again in 2013 but found no infringements.
7. Merger control
Almost 1/3 of all ACA’s decisions48 are in the field of merger control. This is a very important aspect of its activities since the makeup of Albanian markets is often oligopolistic. Considering this market structure, an anti-
48 According to the ACA, 2013 Annual report and main goals for 2014, Tirana 2014, there are 72 merger decisions out of 301 decisions in total.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES REVIEW OF TEN YEARS OF ALBANIAN COMPETITION LAW DEVELOPMENTS 145 competitive merger, if carried out, would be very detrimental for consumers and competition in general. The LPC’s merger control provisions are generally in line with European acquis. A further approximation took place with the amendments of 2010 which, most importantly, introduced a change in the Albanian merger test, aligning it with EU rules. As a result, the ACA is now using the Significant Impediment of Effective Competition (SIEC) test in merger analysis. The dominance test used in Albania before the 2010 amendments was more absolute than that under the first EU Merger Regulation49. According to this regulation ‘A concentration which does not create or strengthen a dominant position as a result of which effective competition would be significantly impeded in the common market or in a substantial part of it shall be declared compatible with the common market’. By contrast, Article 13 of the LPC, before the amendments of 2010, would not allow a merger solely if it created or strengthened a dominant position, without analyzing whether effective competition would have been significantly impeded as a result of the merger or not. The amendments of 2010 extended also, from 7 to 30 days, the deadline for submitting a merger notification. Another important change concerned the lowering of penalties for a late notification. Considering late notifications a minor infringement of the law, the fine is now limited to a maximum 1% of the turnover achieved in the previous accounting year, provided however that the merger is ultimately authorized by the ACA. By contrast, if a non- notified merger is implemented and has anti-competitive effects, this would be considered a serious infringement of the LPC and the fine could go up to 10% of the turnover. In practice, the ACA has imposed several fines for late notifications already; it has, however, never imposed a fine for a serious infringement of its merger rules. Despite the considerable number of mergers supervised, the ACA has never prohibited a merger. It has not issued a conditional clearance50, or even conducted an in-depth investigation (phase 2 investigation) as well. There are also very few examples of notification withdrawals, none of which was caused by the risk of a merger ban or the imposition of a fine. The activity of the ACA in the field of merger control has touched upon different sectors of the Albanian economy including: insurance, banking, energy, trade, constructions, etc. Several mergers included the privatization
49 Article 2.2 of the Council Regulation (EEC) No. 4064/89 of 21 December 1989 on the control of concentrations between undertakings, (OJ L 395, 30.12.1989, p. 1). 50 Decision of ACA no. 150 of 20 July 2010 on the abuse of dominant position of ‘ARMO’ SHA in the market of D2 diesel, Official Bulletin no. 6, 2010, p. 88; available at: http://caa.gov. al/uploads/decisions/vendimi%20150-ARMO.pdf.
VOL. 2015, 8(11) 146 ERMAL NAZIFI, PETRINA BROKA of State-owned companies, operating in industries such as energy transition or refining of oil, etc. An interesting feature of the ACA’s activities is the review of foreign to foreign mergers. Like many other jurisdictions, the LPC has extraterritorial jurisdiction that covers all transactions that might influence the Albanian market, even in cases where the participants remain active outside the Albanian territory. The 2010 reform has narrowed the extraterritorial jurisdiction of the LPC. In order for the ACA to review a merger, the companies involved should now meet a turnover threshold of at least 7 billion lek (approximately 50 milion EUR) in the international market, and at least one of them should meet the domestic threshold of 200 million lek (approximately 1.4 million EU). However, future amendments are needed and should consider the introduction of clearer and stricter criteria for the establishment of the ‘local nexus’51. Examples of foreign to foreign merger cases analysed by the ACA include several transactions notified by Japan Tobacco Inc. (JTI) in different parts of the world (the UK, Netherlands, Belgium, Egypt, Sudan, Southern Sudan, etc). In these cases, the LPC’s international threshold was met by Japan Tobacco Inc. while its local threshold was met by its Albanian subsidiary52. However, many notorious mergers that have triggered multi-jurisdictional merger notifications, for example Pfizer/Wyeth, Google/Motorola, Microsoft/ Skype, Face book/Whatspp, were not notified in Albania. The 2010 reform has in fact lowered earlier turnover thresholds, making them more in line with those found in the Western Balkans region. The fees to be paid for a merger authorisation were also amended in light of the lowering of the notification thresholds; different fees now apply based on different turnover levels53. Interestingly, lowering turnover thresholds was expected to increase the number of merger notifications in Albania, yet only a small increase occurred
51 E.g. the ICN recommended practices for Merger notification procedures; available at: www.internationalcompetitionnetwork.org/uploads/library/doc588.pdf. 52 Decisions of the ACA no. 271 of 26 February 2013 on the authorization of the concentration realized through the acquiring of the control from Japan Tobacco International Netherlands B.V of Nefftekx World II B.V through the transfer of 100% of the quotes from Batata S.A; available at: http://caa.gov.al/decisions/read/id/455. Decisions of the Albanian Competition Commission no. 238 of 26 July 2012 on the authorization of the concentration realized through the acquiring of the full control of V.D.M Invest Comm. VA, through the acquiring of 99.99% of shares from Japan Tobacco International Holding B.V, Official Bulletin 2012, no. 8, p. 97; available at: http://caa.gov.al/decisions/read/id/419; etc. 53 Decision of ACA no. 242 of 3 September 2012 on some amendments on the regulation on expenditures on following the procedures in front of ACA, Official Bulletin 2012, no. 8, p. 117; available at: http://caa.gov.al/uploads/decisions/vendimi_242-shpenzimet.pdf.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES REVIEW OF TEN YEARS OF ALBANIAN COMPETITION LAW DEVELOPMENTS 147 in practice when comparing the total number of notifications before and after the 2010 reform54. This may have been caused by caused by a global decrease in merger activity55. The first quarter of 2014 shows signs of improvements56, which are likely to affect Albania over the next year also. For instance, the Albanian Association of Banks foresees such trend at least in the banking sector having dedicated to this topic the front page of its publication ‘Bankieri’57. Other competition-related issues, such as liberalization and state aid, are not discussed in this paper. Liberalization, modeled after Article 106 TFEU, was included in the LPC following the 2010 reform, but the ACA has not dealt with any such cases yet. According to the changes introduced in 2010, Article 2 LPC, Albanian is applicable also to ‘public undertakings and undertakings which have been granted by the state exclusive or special rights and undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly insofar that in law or in fact their activity is not obstructed’. This will be one of the major challenges facing the ACA in 2014-2015. In the Resolution on the ACA’s work in 2013, the Parliament specifically asked the authority to deal with some concessions that have granted monopoly and/or exclusive rights to private undertakings. On the other hand, state aid is regulated in Law no. 9374 of 21 April 2005 on State Aid58 and enforced by other institutions59.
IV. Conclusions
Free and effective competition is a conditio sine qua non for the market economy in Albania. Both the LPC and the institution in charge of its enforcement are becoming an important part of the Albanian legal framework and legal institutions. Its successful application in practice is very important
54 From 2004 until 2010 there was an average of 5.6 mergers per year. From 2010 until 2014 the average was 9.5 mergers per year. Considering the initial difficulties in the setting up of the institution, low awareness of companies about their duty to notify and the capacities of the ACA to screen the market for mergers that fall under its jurisdiction, this increase is not that big. 55 There is a global and regional decrease in M&As since a recovery in 2011. See: ‘M&A Index, H1 2013, Allen & Overy, London 2013; available at: http://www.allenovery.com/ publications/en-gb/Pages/M-A-Index-H1-2013.aspx., last visited on 13 December 2014. 56 M&A Index Q1 2014, Allen & Overy, London 2014; available at: http://www.allenovery. com/publications/en-gb/maindex/Pages/default.aspx. 57 ‘Mergers and Acquisitions Ante Portas’ (2013) 7 Bankieri. 58 Official Journal no. 36. 59 For more information on the amendments to the LPC introduced in 2010, see: P. Broka, E. Nazifi, ‘Risitë në të drejtën shqiptare të konkurrencës’ (2011) 1 Revista Juridike.
VOL. 2015, 8(11) 148 ERMAL NAZIFI, PETRINA BROKA for an efficient market. It is a pre-condition of Albania’s EU accession as well as an important tool to fight poverty by bringing competition to product and service markets that influence the daily life of many Albanians. The existing legal and institutional framework is a good start for a flexible yet efficient application of competition law and policy in Albania. However, constant improvements are needed to ensure its success.
Literature
Baleta T., Kallfa N. et. al., Dominimi i tregut bankar shqiptar [Dominance of the Albanian banking market], Tirana 2000. Broka P., Nazifi E., ‘Risitë në të drejtën shqiptare të konkurrencës’ (2011) 1 Revista Juridike. Broka P., ‘The Court of Appeals of Tirana upholds the District Court’s judgment quashing the NCA decision concerning a concerted practice case in the markets for wheat import and production of flour (Atlas/Bloja)’ (20 April 2012) N° 49031. e-Competitions Bulletin. Carpagnano M., ‘Private Enforcement of Competition Law Arrives in Italy: Analysis of the Judgment of the European Court of Justice in Joine d Cases C-295-289/04 Manfredi’ (2006) 3(1) The Competition Law Review. Collusion and Corruption in Public Procurement, OECD, Paris 2010. Guidelines for Fighting Bid Rigging in Public Procurement, OECD, Paris 2009. Laina F., Laurinen E., ‘The EU Cartel Settlement Procedure: Current Status and Challenges’ (2013) Journal of European Competition Law & Practice. M&A Index Q1 2014, Allen & Overy, London 2014. M&A Index, H1 2013, Allen & Overy, London 2013. ‘Mergers and Acquisitions Ante Portas?’ (2013) 7 Bankieri. Nazifi E., Broka P., ‘Fighting Cartels ‘Albanian Style’: The Practice of the Albanian Competition Authority against Anticompetitive Agreements’, International Masaryk Conference for Ph.D. Students and Young Researchers 2013 Proceedings. Redek T., Memaj F., Prašnikar J., Trobec D., Albania: The Role of Intangible Capital in Future Growth, Ljubljana 2012.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Economic Determinants of Regulatory Decisions in the Polish Telecommunications Sector
by
Ewa M. Kwiatkowska*
CONTENTS
I. Introduction II. Assessment of market competitiveness III. Empirical base IV. Economic criteria used in telecoms decisions of the President of UOKiK and the President of UKE V. The evolution of the use of qualitative criteria or choice for a particular case?
Abstract
The main policy goals undertaken by public authorities, primarily increasingly competitive telecommunication markets, are achieved through various and distinct administrative actions. Ex post public interventions are meant to protect competition by responding to actions that restrict or violate free market competition (proceedings concerning: the abuse of a dominant position and anti-competitive agreements). Ex ante interventions shapes the relationships among market participants in the framework of merger control and pro-competitive sector-specific regulation. The aim of this study is to determine to what an extent economic criteria are used in the assessment of the competitiveness of Polish telecommunication markets by the competition authority and the Telecoms Regulator (respectively, the President of UOKiK, and the President of UKE) in four distinct types of competition related proceedings: merger control, abuse of a dominant position, anti-competitive agreements, and sector-specific regulation. The paper presents the results of an analysis of qualitative and quantitative criteria applied in decisions (and resolutions)
* Ewa M. Kwiatkowska, Ph.D., Assistant Professor in the Department of Quantitative Methods and Information Technology at Koźmiński University; [email protected].
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issued by both of the authorities in the past eleven years (2003–2013). To this end, 194 publicly available decisions were analysed.
Résumé
L’objectif principal des actions prises par les autorités publiques, qui est un marché de télécommunication compétitif, est atteint par les différentes actions régulatoires. Des régulations ex post assurent les fonctions protectrices de la concurrence en répondant aux actions qui restreignent ou violent la concurrence (ces procédures concernent: les abus de position dominante, les ententes illicites). Des régulations ex ante influent sur la concurrence en contrôlant les fusions et la réglementation pro-concurrence spécifiques à un secteur, ce qui conditrionne les relations entre les participants d’un marché. Le but de cette étude est de déterminer le degré d’utilisation des critères économiques afin d’évaluer la compétitivité des marchés de télécommunication par les autorités de régulations (le Président de l’Office de protection de la concurrence et des consommateurs, le Président de l’Office des communications électroniques) dans quatre types différents d’action (dans le domaine du contrôle des fusions, les abus de position dominante, ententes illicites, régulations spécifiques à un secteur donné). Cet article présente les résultats des analyses des critères qualitatifs et quantitatifs appliqués dans les règlements délivrés par les autorités de régulations dans les onze dernières années (2003–2013). 194 règlements publiquement disponibles (décisions et résolutions) ont été analysés.
Classifications and key words: competitiveness assessment; decisions; ex ante regu- lation; ex post regulation; Poland; qualitative criteria; quantitative criteria; resolu- tions; telecommunications markets
I. Introduction
Telecommunications is particularly dependent on effective regulation as it is a network industry evolving from a centrally planned economy and state-owned monopolies towards a private economy based on free market mechanisms. The sources of such regulations are found not only in the legislative legacy of the sector, but also in its economic and technical aspects. The specificity of the functioning on this kind of markets results from the need to use special infrastructure, which is difficult, or often impossible to duplicate. The so-called incumbent operators often have exclusive or privileged access to such infrastructure. Competition on many Polish telecommunication markets has not yet developed to a degree sufficient to make it possible to move away from the use of the well-tailored tools of sector-specific regulation used by the National Regulatory Authority (hereafter, NRA) responsible for
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES ECONOMIC DETERMINANTS OF REGULATORY DECISIONS IN THE POLISH… 151 the supervision of the Polish telecoms sector – the President of the Office of Electronic Communications (hereafter, President of UKE). It is thus still necessary, on Polish telecommunication markets, to use sector-specific regulation which actively fosters the development of effective competition, alongside the activities undertaken in this field by the National Competition Authority (hereafter, NCA) – the President of the Office of Competition and Consumer Protection (hereafter, President of UOKiK). As such, the assurance of a competitive telecoms sector is the fundamental objective pursued by both public authorities through a variety of administrative actions. Ex post public intervention realizes competition protection objectives by responding to the actions of undertakings that have restricted or violated competition. Ex ante intervention influences the competitive relations among the participants of telecommunication markets in the framework of merger control and pro-competitive sector–specific regulation. The above public interventions take the form of proceedings conducted by the President of UKE and the President of UOKiK. Each of these proceedings includes the assessment of the degree of the competitiveness of markets. Although the tasks in the field of competition protection and pro-competitive sector-specific regulations are formulated differently, both authorities evaluate market competitiveness in each of their decision-making processes. Such assessment, which requires the use of appropriate quantitative and qualitative criteria, provides a detailed diagnosis of the relations among economic entities functioning in the scrutinised market. The diagnosis specifies the market power of the investigated undertakings and their ability to form relationships with other market participants. Interventions by administrative authorities require the examination of the degree of competition found on specific telecommunication markets. It is important, however, to apply appropriate evaluation methods to ensure the effectiveness of the decision-making process, which determines the outcome of the final decisions (and resolutions1) in competition law and sector-specific proceedings. Administrative tools, meant to promote or protect competition in the telecoms sector, cannot be used effectively without a prior detailed investigation of the relevant market – an investigation suitable for each type of proceedings. The selection of economic instruments (quantitative criteria and qualitative criteria) and the way how they are used by the authorities in the evaluation process of the degree of competition found on given relevant markets has, therefore, a significant impact on the whole process of regulating telecommunication markets in an ex ante or ex post manner.
1 For the sake of clarity, this text will use the English term ‘decision’ to cover both decisions (in Polish: decyzje) and resolutions (in Polish: postanowienia) issued by the President of UKE (NRA) since the official name of the administrative act does not affect the following analysis.
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The aim of this study is to determine the extent to which economic criteria are applied while assessing the competitiveness of telecommunication markets in Poland by the President of UOKiK and by the President of UKE in particular types of competition-related proceedings: merger control, abuse of a dominant position, anti-competitive agreements and sector-specific regulation. The paper presents the results of an analysis of the application of qualitative and quantitative criteria in decisions issued by the President of UOKiK and the President of UKE over the past eleven years (2003–2013).
II. Assessment of market competitiveness
The aim of the assessment of market competitiveness is to determine whether a market participant, or a group of participants, is within a normative category (dominant position or significant market power), which subjects them to specific legal consequences in the form of obligations, prohibitions and penalties. This assessment allows the authorities to determine whether the level of competition that currently occurs, or may occur in the future, may cause the need to issue an administrative decision regarding this field. In most cases, the assessment of the competitiveness of a given relevant market tends to determine whether a particular undertaking holds a dominant position upon it individually – called ‘significant market power’ (hereafter, SMP) in the ambit of sector-specific regulation. It is also possible that a group of undertakings, at least two, together holds a joint dominant position on that market (known in sector-specific regulation as collective SMP). With respect to anti-competitive agreements, the President of UOKiK verifies whether the market shares of the undertakings participating in the investigated agreement result in liability. In case of low combined market shares, liability may be excluded (so-called de minimis agreements). In pre-emptive merger control cases, the NCA analyses whether the reviewed transaction will cause a significant impediment of effective competition (hereafter, SIEC) by creating or strengthening a dominant position or by making anti-competitive behaviour of the undertakings more likely in the future. Regardless of how the circumstance tested were normatively defined by the authority in relation to the preparation of an administrative decision, a prerequisite for the issuance of such a decision is to assess the competitiveness of the relevant market. Depending on the type of mandate carried by the authorities in given proceedings, the task of assessing the degree of market competition is structured differently. Different states of the market sought by the authorities are presented in Table 1.
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Table 1. States of the market analysed in various types of proceedings
Responsible Type of proceedings States of the market authority Sector-specific President The presence of individual or collective SMP regulation of UKE SIEC in the future (in particular through the creation or strengthening of a dominant position on the market) President Merger control – of UOKiK horizontal, vertical or conglomerate impact of the merger on the market in the future The existence of an undertaking with a dominant Abuse of a dominant President position, or at least two undertakings holding a position of UOKiK dominant position collectively Impact of the agreement on the market. Fulfilment by the participating undertakings of the Anti-competitive President criteria necessary for exemption from the prohibition of agreements of UOKiK agreements (e.g. de minimis doctrine – low market shares of undertakings on the market or block exemption)
These different market states, which are examined by the NRA and NCA in specific types of their proceedings, determine the method chosen for the assessment of the competitiveness of the relevant markets. While the methods used are to some extent similar, the sets of criteria employed in the evaluation carried out within each of these four types of proceedings are different. To a large extent, it is the authority that determines the selection of the economic instruments that best reflect the situation on the relevant market. It is particularly important to determine whether the scrutinised undertaking holds a dominant position for the application of the abuse prohibition. It is necessary to use certain instruments and economic categories to define and establish dominance2. An undertaking that individually holds a dominant position has market power on the relevant market. Article 4 (10) of the Polish Act of 16 February 2007 on Competition and Consumer Protection3 (hereafter, CL) contains the legal definition of a dominant position. The latter is based on the definition of dominance developed by the European Court of Justice (hereafter, ECJ)4. According to the legal definition, dominance is a position of an undertaking: ‘(…) which allows it to prevent effective competition in
2 M. Szydło, Nadużywanie pozycji dominującej w prawie konkurencji, Warszawa 2010, p. 82. 3 Journal of Laws 2007 No. 50, item 331, as amended. 4 There is no legal definition of a dominant position in the EU law. This concept is based on the judgments of EU courts, mainly in Case 27/76 United Brands v Commission [1978] ECR 00207, and Case 85/76 Hoffmann-La Roche v Commission [1979] ECR 00461; C. Banasiński, S. Piontek (ed.), Ustawa o ochronie konkurencji i konsumentów. Komentarz, Warszawa 2009,
VOL. 2015, 8(11) 154 EWA M. KWIATKOWSKA a relevant market thus enabling it to act to a significant degree independently of its competitors, contracting parties and consumers; it is assumed that an undertaking holds a dominant position if its market share in the relevant market exceeds 40%’5. In accordance with the definition contained in the Polish Telecommunications Law Act (hereafter, TL)6 ‘a telecommunications undertaking shall have significant market power if it enjoys individually an economic position in a relevant market equivalent to dominance within the meaning of Community Law’7. In this context, the preamble to the Framework Directive8 states that the concept of market dominance should be understood as it has been defined in the jurisprudence of the ECJ and the Court of First Instance9. In accordance with the Framework Directive, an undertaking holds SMP if, individually or jointly with others, it enjoys a position equivalent to a dominant position – ‘(…) a position of economic strength affording it the power to behave to an appreciable extent independently of competitors, customers and ultimately consumers’10. This is the classic definition of domination11 and so the regulatory concept of SMP is an equivalent of the competition law notion of a dominant position12. In other words, it is a ‘clone’ of this institution13. The definitions of these two terms (contained in the Framework Directive and in the CL), indicate a link between sector-specific regulation and competition law14. The institution of a dominant position is used for competition protection, and the institution of SMP is a key element of sector-specific regulation15. p. 128; T. Skoczny, Komentarz do art. 4, [in:] T. Skoczny (ed.), Ustawa o ochronie konkurencji i konsumentów. Komentarz, Warszawa 2009, p. 235. 5 Article 4 (10) CL. 6 Act of 16 July 2004 – Telecommunications Law, Journal of Laws No. 171, item 1800, as amended. 7 Article 25a (1) TL. 8 Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive), OJ [2002] L 108/33 (amended by: Regulation 717/2007 of the European Parliament and of the Council of 27 June 2007, OJ [2007] L 171/32; Regulation (EC) No 544/2009 of the European Parliament and of the Council of 18 June 2009, OJ [2009] L 167/12; Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009, OJ [2009] L 337/37). 9 Para. 25 of the preamble to Framework Directive. 10 Article 14 (2) of Framework Directive. 11 A. Streżyńska, ‘Pozycja rynkowa operatorów w nowych dyrektywach UE i w Prawie telekomunikacyjnym’ (2002) 3 Prawo i Ekonomia w Telekomunikacji 9. 12 T. Skoczny, ‘Ocena konkurencyjności rynków’, [in:] S. Piątek (ed.) Regulacja rynków telekomunikacyjnych, Warszawa 2007, p. 212. 13 S. Piątek, Sieci szerokopasmowe w polityce telekomunikacyjnej, Warszawa 2011, p. 53. 14 T. Skoczny, Ocena…, p. 225. 15 S. Piątek, Sieci…, p. 53.
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The President of UKE analyses and evaluates the competitiveness of relevant markets in order to determine whether any given undertaking individually holds SMP. In these proceedings, specific evaluation criteria established for the needs of pre-emptive sector-specific regulation are taken into consideration in addition to the general rules applicable to the determination of a dominant position formulated in EU law. The TL does not currently contain a direct list of criteria used to assess the existence of single SMP – it merely contains a reference to the list of criteria set out in the European Commission’s guidelines on market analysis16. However, the TL does contain a catalogue of criteria used to assess collective SMP17. Quantitative analysis, which mainly consists of the evaluation of market shares, is considered as supplementary in the process of assessing the position and strength of the scrutinised undertakings. It also signals the need to conduct a qualitative analysis18. The criterion of market share is regarded as a preliminary filter which determines market dominance19. In accordance with competition law, it is impossible to accept a simplified relationship between exceeding the pre-determined level of market share (40%) and the existence of a dominant position20. The criterion of market share cannot automatically prejudge the existence of an undertaking with a privileged position on the market21. This criterion is relevant to the assessment of market power, but it is not the sole relevant criterion22. The size of existing market shares does not reflect competitive pressure from potential competitors, i.e. undertakings which are not active on the relevant market. That is why an administrative decision based solely on an assessment of the degree of market competition based solely on the criterion of market share can be unreliable. To fully determine the economic position of undertakings, it is necessary to determine the existence of potential competition also. Legal and economic entry barriers as well as the likelihood of expansion of those already present on the market must be identified as well. The most significant economic barriers include: sunk costs, economies of scale and scope, access to key resources and a well established position. Another important factor in the market power assessment
16 Article 25a (2) TL refers to European Commission guidelines on market analysis and the assessment of significant market power under the Community regulatory framework for electronic communications network and services, OJ [2002] C 165/03 (hereafter, guidelines on market analysis). 17 Article 25a (4) and (5) TL. 18 A. Fornalczyk, Biznes a ochrona konkurencji, Kraków 2007, p. 47. 19 D. Chalmers, G. Davies, G. Monti, European Union Law. Cases and Materials, Cambridge 2010, p. 999. 20 M. Szydło, Nadużywanie…, p. 81–82. 21 S. Piątek, Prawo telekomunikacyjne. Komentarz, Warszawa 2005, p. 246. 22 R. Whish, Competition Law, Oxford 2009, p. 40.
VOL. 2015, 8(11) 156 EWA M. KWIATKOWSKA process is the position of customers23. The finding of a dominant position may be avoided by the existence of strong countervailing buying power, despite high market shares of the undertaking concerned, the existence of high entry barriers and market expansion. Due to the rebuttable nature of the legal presumption in dominant position proceedings, they should not be limited to the determination of the level of market shares in cases of unilateral practices. It is usually necessary to also use qualitative criteria which make it possible to indicate the sources of market power. Such a multidimensional assessment is required to determine the existence of a dominant position. All the key facts should be considered in order to determine dominance24 – the fulfilment of qualitative evidences must be demonstrated25. Those conditions play a decisive role for the assessment of market power. The rebuttable quantitative criterion of 40% market share plays a supporting role only – it is less relevant than qualitative criteria26. Market share can pre-determine whether the existence of a dominant undertaking is likely. It does not, however, provide any information about the possibility of acting independently from other market players27. Although it is possible to hold a dominant position even if the statutory threshold of 40% market share is not exceeded, this is less likely because the law sets the quantitative threshold for the presumption of dominance at a low level28. The goal of pre-emptive merger control is to prevent the creation of such undertakings, which may exercise a negative impact on the market by significantly restricting competition. In general, mergers do not endanger competition. They may even cause an increase in competitiveness, thanks to, among other things, lower costs and increasing business efficiency29. Additionally, mergers may allow the parties to compete more effectively with undertakings which already hold a dominant position. In the case of horizontal mergers, the creation or strengthening of a dominant position (or, for oligopolistic markets, collective dominant position) is one of the most common dangers leading to SIEC30. The fundamental criterion for assessing competitiveness, particularly considering horizontal mergers, is the market
23 C. Banasiński, S. Piontek (eds), Ustawa…, p. 129–133. 24 C. Bongard, D. Möller, A. Raimann, N. Szadkowski, U. Dubejko, Instrumenty ekonomiczne w prawie konkurencji, Bonn/ Warszawa 2007, p. 73. 25 T. Skoczny, Komentarz do art. 4, [in:] T. Skoczny (ed.), Ustawa..., p. 237. 26 M. Szydło, Nadużywanie…, p. 93. 27 C. Banasiński, S. Piontek (eds), Ustawa..., p. 132. 28 M. Szydło, Nadużywanie…, p. 94. 29 C. Banasiński, S. Piontek (eds), Ustawa…, p. 323. 30 Para. 4 of Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings, OJ [2004] C 31/03 (hereafter, Guidelines on horizontal mergers).
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES ECONOMIC DETERMINANTS OF REGULATORY DECISIONS IN THE POLISH… 157 shares of the undertakings concerned. It allows the evaluation of the market structure before and after the notified transaction as well as the assessment of the market power of its participants and their competitors. Data on the degree of current market shares is usually used for this analysis. Additionally, historical data may reveal changes in the strength of the undertakings concerned which can facilitate forecasts on the competitive situation likely to come. The competition authority must also take into account the dynamics of the market at stake and the possibility of potential instability while determining market shares and assessing market competitiveness31.
III. Empirical base
The subject matter of this analysis is the application of economic criteria in the decision-making process of the Polish NRA and NCA with respect to telecommunication markets. The analysis covered 194 available decisions (and resolutions) issued by the President of UKE and the President of UOKiK in this field. 31 out of the analysed 194 decisions were issued by the President of UKE – they date from 2006 to 2013. They include 9 decisions on retail markets and 22 concerning wholesale. Selected decisions, relating to very similar markets (the so-called: market 9 – provision of call termination on individual public telephone networks provided at a fixed location; market 16 (7) – the provision of voice call termination on individual mobile networks and SMS termination market – provision of short text messages (SMS) termination on individual mobile networks), were not investigated. The undertakings at stake all hold a 100% market share on these markets. The analysis also covered 163 decisions issued between 2003 and 2013 by the President of UOKiK concerning merger control, the abuse of a dominant position and anti-competitive agreements. More than half of these decisions (93) concerned restrictive practices: 76 decisions related to abuse and 17 to anti-competitive agreements. 70 decisions on merger control were also analysed. However, the NCA did not substantiate its decision in more than half of these merger cases (38). This research is limited to the detailed analysis of the decisions of the NCA and NRA – the President of UOKiK and the President of UKE. Although their decisions are often appealed, the resulting judgments of the Supreme Court, the Court of Appeals in Warsaw and the Court of Competition and
31 Paras. 14 and 15 of Guidelines on horizontal mergers.
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Consumer Protection (hereafter, SOKiK) have not been analysed in detail here. The above jurisprudence was omitted because it did not provide any new ways of assessing the competitiveness of telecommunication markets. It also did not contribute any new elements (criteria) to the analysis of the methods for the assessment of the degree of market competition, which could affect the practice of the relevant administrative authorities. Indeed, in cases where the judiciary had in fact present the competitive situation occurring on the relevant market at all, their coverage was usually limited to the assessments made earlier by the President of UOKiK or the President of UKE.
IV. Economic criteria used in telecoms decisions of the President of UOKiK and the President of UKE
The analysis of the decisions issued by the NCA and NRA has made it possible to identify the criteria for assessing the competitiveness of telecommunication markets used in their administrative practice in all four of the types of proceedings covered by this research. The criteria identified in this study were classified into three groups: quantitative (first group); qualitative related to undertakings (second group) and; qualitative related to the market (third group). The first division was made on the basis of quantitative and qualitative criteria. The first group (quantitative criteria) includes in fact only one criterion – market share – which plays, nevertheless, an important role in all of the proceedings. Additionally, market shares are the basis for the calculation of market concentration levels. By contrast, qualitative criteria constitute an extensive toolbox for determining the competitive situation of the case. Among them, two specific sets of criteria used for the assessment of the degree of market competition were established: those related to the undertaking or undertakings concerned (the second group) and those related to the characteristic of the market on which telecoms undertakings operate (the third group). The classification of the criteria and their application by the President of UKE and the President of UOKiK in particular types of their proceedings is shown in Figure 1. The criteria used by the NRA are marked in italics. The criteria used by the NCA in cases concerning the abuse of a dominant position are underlined; those used in decisions concerning merger control are noted in bold. Only the quantitative criterion of market share was examined to determine whether the exemption for agreements of minor importance can be applied in proceedings concerning anti-competitive agreements (for clarity purpose, it is not indicated in Figure 1).
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Figure 1. Classification of the criteria used for the assessment of market competitiveness in particular types of proceedings
markets competitiveness assessment criteria
quantitative qualitative
market related to undertakings related to the market share overall size level of countervailing
possibility of production increase buying power control of infrastructure not stagnant or moderate easily duplicated growth on the demand size technological advantages elasticity of demand a highly developed distribution mature market and sales network barriers to expansion access to capital resources homogenous product economies of scale mature technology economies of scope barriers to entry vertical integration price competition retaliatory mechanisms cost structure of undertakings exclusive contract potential competition informal links between undertakings transparency of the market known and recognised brand similar market shares
The evaluation of the competitiveness of markets for the purpose of sector- specific regulation and merger control is different from the same assessment associated with violating the prohibition of competition restricting practices. This distinction places the focus of the authorities on the undertakings’ future behaviours in the first case, and on their past actions in the second. In case of sector-specific regulation and pre-emptive merger control, the NRA and the NCA both examine the economic situation prevailing in the relevant market. The relevant market is always the starting point for assessing competitiveness here and the undertakings concerned are determined on these markets. Subsequently, their market position is assessed on these relevant markets. By contrast, the starting point for the assessments of the economic situation of a restrictive practices’ case is the undertaking, or undertakings, suspected by the NCA of engaging in a prohibited practice. The market position of other operators on the relevant market is assessed later. The starting point of the assessments in particular types of proceedings is determined by the selection of the qualitative criteria applied. If the NCA had used qualitative criteria in proceedings relating to the abuse of a dominant
VOL. 2015, 8(11) 160 EWA M. KWIATKOWSKA position, it would have mainly applied those that describe the undertaking or undertakings operating on the market. Seven criteria related to undertakings (group 2) were analysed in abuse cases but only three qualitative criteria related to the market (group 3). By contrast, only three criteria related to the market (group 3) and not a single criterion from group 2 were analyzed in merger control proceedings. The President of UKE used all or nearly all quantitative and qualitative normative criteria in his assessment of the competitiveness of Polish telecommunication markets. Moreover, decisions and resolutions issued by the telecoms regulator contain very elaborate justifications on the level of the competitiveness of the analysed markets. This fact makes it possible to determine what information on the relevant market and on the telecoms operators were actually sought and analysed by the NRA. Those parts of regulatory decisions which describe the use of particular economic criteria for the assessment of the degree of market competition usually contain very detailed justifications. They make it possible to identify the ways by which various economic criteria are used in Polish regulatory practice. This makes it easier to identify the practices of the sector-specific regulator in assessing competitiveness.
V. The evolution of the use of qualitative criteria or choice for a particular case?
The activity of the Polish telecoms regulator shows an evolution in the application of qualitative criteria for the assessment of the degree of competition on telecommunication markets. The President of UKE uses the criteria defined directly in the TL, or in the European Commission guidelines on market analysis which are referred to by TL. Initially however, that is during the first wave of telecommunication market reviews, all of the listed criteria tended to be used. The regulator repeatedly found however that some of them were not useful in the Polish context (e.g. technological advantages). This resulted, first, in the marginalization, and later in the omission of these criteria from the market analysis stage. At present, the President of UKE usually uses only those of the criteria which, in light of his previous practices, best reflect the competitive situation in Poland and may affect the NRA’s final decision. A trend is also visible whereby a slightly different set of criteria is used with respect to wholesale markets than on the retail level because not all criteria are suitable for both types of markets. For example, the development of the distribution and sales network level was not considered in the assessment of
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES ECONOMIC DETERMINANTS OF REGULATORY DECISIONS IN THE POLISH… 161 the degree of competition found on Polish wholesale markets within the second wave of their market review process because wholesale competitiveness is not influenced by this criterion. The evolution in the application of qualitative criteria should be considered as appropriate since criteria which do not affect the evaluation of a given market’s are simply omitted. None of the NRA’s decisions were made solely on the basis of a market share analysis. Even decisions regarding markets dominated by undertakings that consistently hold a 100% market share, were issued on the basis of an analysis that covered market shares as well as qualitative criteria (i.e. markets for the provision of: call termination on individual public telephone networks provided at a fixed location or voice call termination on individual mobile networks or short text messages (SMS) on individual mobile networks). For example, within the second market review process, the NRA’s decision on the position of PTC32 on market 9 included, aside from market shares, the following qualitative criteria: lack of technical and economic grounds to construct an alternative telecoms infrastructure; existence of barriers to entry; easy or privileged access to capital markets or financial resources; vertical integration of the undertakings; lack of potential competition; existence of barriers to expansion and; lack or low level of countervailing buying power33. Qualitative criteria were used much less often by the President of UOKiK than by the President of UKE. The tasks of the NCA provide it with far more freedom as far as choosing the economic criteria used in its assessment. The President of UOKiK has a tendency to limit the scope of such analysis to the market share criterion. This fact shows the opportunism of the NCA, which is not obliged to use the normative catalogue of criteria that binds the telecoms regulator. The findings of the President of UOKiK are often based on the market share of one or more undertakings. The analysis of its decisions shows that the NCA has been studying market shares very thoroughly. In fact, only the market share criterion was used in decisions concerning anti-competitive agreements in order to determine the applicability of the exemption for agreements of minor importance. Despite the general recognition of the importance of qualitative criteria, all of the analysed decisions concerning anti-competitive agreements were based solely on the analysis of market shares. The same can be said for approximately 80% of abuse and merger control decisions were an evaluation of the competitiveness of the market was conducted at all. It is worth noting that more than 51% of these decisions concerning abuse were addressed to housing cooperatives, each of which holding a 100% market share.
32 PTC – Polska Telefonia Cyfrowa. 33 Decision of the President of UKE of 26 October 2011, DART-SMP-6040-5/11 (22).
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It is generally emphasized that qualitative criteria should be analysed alongside quantitative ones. Market shares should not be the decisive criterion for determining either dominance or the possibility of SIEC. Nonetheless, as opposed to the above mentioned practice of the sector-specific regulator, the qualitative criteria are very rarely analysed in practice by the NCA and they do not constitute a precise set. Qualitative criteria used by the President of UOKiK are chosen on a case by case basis. Selected qualitative criteria were used in only 19,6% of the analysed abuse decisions and 20% of those merger decisions, were the President of UOKiK presented at all an analysis of the level of market competition. In general, these criteria did not prove crucial for the final assessment, as opposed to the criterion of market shares. It is worth noting that more qualitative criteria were used in abuse than in merger control cases. The structure of the decisions issued by the President of UOKiK in 2003-2013 is presented in Table 2.
Table 2. The structure of the decisions issued by the President of UOKiK between 2003–2013
Abuse of a dominant Anti-competitive Merger control position agreements Assessment Assessment market market ∑ shares ∑ ∑ shares and others and others
Lack of assessment market shares criteria Lack of assessment Only market shares assessment Without justifica-tion Lack of assessment market shares criteria 2003 11 64 1 3 1210 151 3 2004 20 10 8 2 1 1 6 24 2005 5 22 1 4 1312 417 2006 10 55 3 217 61 2007 8 12 5 3 125 32 2008 1 1 5 211 1 2009 1 1 1 1 3 21 2010 5 5 7 7 2011 7 611 1 5 41 2012 5 5 5 41 2013 3 3 1 1 5 5 ∑ 76 25 41 10 17 51270 38 12 16 4
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Most Polish competition law decisions do not contain an in-depth analysis of the assessment methods of the relevant market and the evaluation of the level of its competitiveness. More than 32% of the NCA’s decisions on restrictive practices (nearly 33% for abuses and nearly30% for anti-competitive agreements) were not based on the assessment of the competitiveness of the relevant markets at all. This ratio exceeds 71% in merger control decisions. The results of this analysis show that only 17% of all decisions contain such an assessment made on the basis of at least one qualitative criterion in addition to the market share analysis. Unfortunately, there is no progress observed in this matter as of yet. Those qualitative criteria which had been applied were selected specifically for the analysis of particular markets. The President of UOKiK investigates many merger cases. In many cases however, merger control has limited value for evaluation of the methods of competitiveness assessment, since it has been associated with a limited impact on the market. The NCA has not substantiated its decision in more than 54% of its decisions authorizing a concentration. This could indicate that in the case of the telecoms sector, the threshold required by law, updating concentration to gain prior clearance, is set at too low level. From the point of view of the general interest, and from the perspective of undertakings operating on Polish telecommunication markets, this is not a desirable situation.
Literature
Banasiński C., Piontek S. (ed.), Ustawa o ochronie konkurencji i konsumentów. Komentarz [Act on Competition and Consumer Protection. Commentary], Warszawa 2009. Bongard C., Möller D., Raimann A., Szadkowski N., Dubejko U., Instrumenty ekonomiczne w prawie konkurencji [Economic instruments in the Competition Law], Bonn/ Warszawa 2007. Chalmers D., Davies G., Monti G., European Union Law. Cases and Materials, Cambridge 2010. Fornalczyk A., Biznes a ochrona konkurencji [Business and the protection of competition], Kraków 2007. Piątek S., Prawo telekomunikacyjne. Komentarz [Telecommunications Law. Commentary], Warszawa 2005. Piątek S., Sieci szerokopasmowe w polityce telekomunikacyjnej [Broadband networks in the Telecommunications policy], Warszawa 2011. Skoczny T., ‘Ocena konkurencyjności rynków’ [‚Evaluation of Market Competitiveness’], [in:] Piątek S. (ed.) Regulacja rynków telekomunikacyjnych [Regulation of telecommunications markets], Warszawa 2007. Skoczny T. (ed.), Ustawa o ochronie konkurencji i konsumentów. Komentarz [Act on Competition and Consumer Protection. Commentary], Warszawa 2009.
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Streżyńska A., ‘Pozycja rynkowa operatorów w nowych dyrektywach UE i w Prawie telekomunikacyjnym’ [‘The market position of operators in the new EU directives and in the Telecommunications Law’] (2002) 3 Prawo i Ekonomia w Telekomunikacji. Szydło M., Nadużywanie pozycji dominującej w prawie konkurencji [Abuse of a dominant position in competition law], Warszawa 2010. Whish R., Competition Law, Oxford 2009.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NATIONAL LEGISLATION REVIEWS
2014 Amendment of the Polish Competition and Consumers Protection Act 2007
by
Tadeusz Skoczny*
CONTENTS
I. Introduction II. Increasing the effectiveness of the enforcement of the prohibition of anti-competitive practices 1. Remedies in antitrust cases 2. Leniency and Leniency Plus 3. Settlement procedure 4. The introduction of fines for individuals 5. Inspection powers III. Simplifying and shortening merger control proceeding IV. Conclusions
Abstract
The article presents a critical analysis of changes introduced into the Polish Competition Act of 2007 by the Amendment Act of 2014. The declared purpose of the Amendment was mainly to increase the effectiveness of the enforcement of the antitrust prohibitions, including the introduction of conduct remedies in antitrust cases, the settlement procedure and fines for individuals, changes in the Polish Leniency Programme and inspection powers, as well as simplifying and shortening merger control proceedings. Considered in the paper is the thesis that some of these changes were not introduced properly; in particular, that the new provisions
* Prof. Tadeusz Skoczny, professor of law; Department of European Economic Law at the Faculty of Management of the University of Warsaw. Holder of the Jean Monnet Chair on European Economic Law. Director of the Centre for Antitrust and Regulatory Studies (CARS). Chief Advisor to the President of the Office of Competition and Consumers Protection; [email protected].
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fail to sufficiently safeguard the rights of undertakings, and that the amendment is an inadequate step towards the convergence of the Polish competition law system with the enforcement rules of the EU and its other Member States. Further changes to the Polish Competition Act of 2007 are therefore needed. The paper does not cover changes introduced by the Amendment Act of 2014 to Poland’s consumer protection provisions.
Résumé
Cet article présente une analyse critique des changements introduits par l’amendement de 2014 dans la loi polonaise relative à la protection de la concurrence et des consommateurs de 2007. Le but déclaré de l’amendement visait principalement à accroitre l’efficacité de l’application du droit de la concurrence par l’introduction des mesures correctives dans les affaires du droit de la concurrence, de la procédure de règlement et des sanctions contre les individus, des changements dans le programme de clémence polonais et dans les pouvoirs d’inspection de l’Autorité de la concurrence, ainsi que par la simplification et le raccourcissement de la procédure de contrôle des concentrations. Selon l’hypothèse présentée dans l’article, certains de ces changements n’ont pas été introduits correctement, les nouvelles dispositions ne parviennent pas à préserver suffisamment les droits des entreprises et l’amendement de 2014 constitue un pas insuffisant vers la convergence du système de droit de la concurrence polonais avec les règles d’application du droit de la concurrence dans l’UE et les Etats Membres. En effet, de nouveaux changements de la loi relative à la protection de la concurrence et des consommateurs de 2007 sont nécessaires. L’article ne couvre pas les modifications introduites par l’amendement de 2014 dans le domaine de protection des consommateurs.
Classifications and key words: enforcement of the prohibition of anti-competitive practices; fines for individuals; inspection powers; leniency; leniency plus; merger control proceeding; remedies; settlement.
I. Introduction
The Polish competition law system is already 25 years old1. The currently applicable Act on Competition and Consumer Protection (hereafter,
1 See in detail T. Skoczny, ‘Poland: Chapter 3 – Competition Law’ [in:] S. Breidenbach, Ch. Campbell (eds.) Business T ransactions in Eastern Europe, vol. 2 (Lexis Publishing 1977) § 2. T. Skoczny, ‘Polish Competition Law in the 1990s – on the Way to Higher Effectiveness and Deeper Conformity with EC Competition Rules’ (2001) 2 European Business Organization Law Review 777–793; M. Błachucki, Polish Competition Law – Commentary, Case Law and Texts, Warszawa 2013 (available in Polish in at: http://www.UOKiK.gov.pl/publikacje.php?tag=2).
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 167
Competition Act) was promulgated in 20072. The Competition Act of 2007 replaced an identically named act which was issued in 20003 and subjected to a major amendment in 20044, directly before Poland’s accession to the EU.A few years of applying the Competition Act of 2007 in practice made it possible to gradually identify its omissions, shortcomings and faults. Hence, the Polish government declared in its ‘Competition Policy 2011-2013’5 that the Competition Act of 2007 was in need of an amendment. After more than two years of preparations and widespread discussions initiated and led by the services of the Polish Competition Authority – the President of the Office of Competition and Consumers Protection (hereafter, UOKiK President), major changes were ultimately introduced into the Competition Act of 2007 by the Amendment Act of 20146 (hereafter, 2014 Amendment Act). The 2014 Amendment Act entered into force on 18 January 2015. According to the ‘Competition Policy 2011-2013’, and the strong will of the former UOKiK President who originally initiated the preparation of this Act, the new legislation seeks, first, to increase the effectiveness of competition law enforcement in Poland and, second, to simplify and shorten national merger control proceedings7. Effective antitrust enforcement is a key factor for the success of any competition authority. It came as no surprise therefore that the UOKiK President had tried to use the amendment process to add new legal instruments to its already well-equipped toolbox. In order to increase the efficacy of competition law enforcement in Poland, the Parliament accepted the UOKIK President’s proposal to introduce into the national legal system a number of completely new instruments of competition law enforcement, and to make significant changes to a number of existing ones. Among the newly created
2 The Act of 16 February 2007 on the Protection of Competition and Consumers (Journal of Laws 2007, No. 50, item 331 as amended); available in English at http://www.UOKiK.gov. pl/competition_protection.php. 3 The Act of 15 December 2000 on the Protection of Competition and Consumers (Journal of Laws 2003 No. 86, item 804) (unavailable in English). 4 The Act of 16 April 2004 on the Amendment of the Act on the Protection of Competition and Consumers (Journal of Laws 2004 No. 93, item 89) (unavailable in English). 5 Competition Policy 2011-2013, Office of Competition and Consumers Protection, Warsaw 2011; available in .pdf at: http://www.UOKiK.gov.pl/publikacje.php?news_page=1&tag=2. 6 The Act of 10 June 2014 amending the Act on the Protection of Competition and Consumers and the Code of Civil Procedure (Journal of Laws item 945) (unavailable in English). 7 The justification of the Amendment Act of 2014 is available in Polish at http://orka. sejm.gov.pl/ and the official statement of the UOKIK President (M. Krasnodębska-Tomkiel) published in Polish in internetowy Kwartalnik Antymonopolowy i Regulacyjny (iKAR) (2012) 1(1), p. 7–9; also available in Polish at http://www.ikar.wz.uw.edu.pl/. See also M. Krasnodębska- Tomkiel, ‘Balancing Enforcement with Advocacy: A Constant Challenge’ (2012) 3(5) Journal of European Competition Law & Practice 423.
VOL. 2015, 8(11) 168 TADEUSZ SKOCZNY instruments are: the use of conduct remedies in antitrust cases, fines imposed on individuals (company managers) for letting anti-competitive practices take place, and settlements. Leniency plus has been introduced as a new element of the already existing national leniency programme. Finally, a number of changes were meant to clarify the inspection powers of the UOKiK President.
II. Increasing the effectiveness of the enforcement of the prohibition of anti-competitive practices
1. Remedies in antitrust cases
Before the 2014 Amendment Act, if an infringement of an antitrust prohibition (anti-competitive agreements or abuse of a dominant position8) was established, the UOKIK President could either issue an ‘infringement’ decision or a ‘commitment decision’. In the former case, the authority could order the offending undertakings to refrain from engaging in the forbidden practice in the future (only negative obligations) and impose upon it an antitrust fine9. Alternatively, the UOKiK President could issue a ‘commitment’ decision that obliged the undertakings to undertake certain activities that were meant to counteract the violations10. Thanks to the 2014 Amendment Act, the UOKiK President will now also be able – for the first time in Poland – to determine in his infringement decisions how an undertaking should go about terminating the infringement, or remove its effects, by imposing conduct remedies (both positive and negative obligations)11.This should improve transparency and legal certainty as the UOKIK President will be able to use measures reflecting the characteristics of the investigated market and the actual case at hand12. This new legal institution is modelled on Article 7 of Regulation 1/200313. Still, the European Commission has more freedom in the imposition of conduct
8 Article 6-9 of the Competition Act of 2007and Article 101 or 102 TFUE. 9 Article 10(1)-(3) and Article 106(1)(1)-(2) of the Competition Act of 2007. 10 Article 12 of the Competition Act of 2007. 11 Article 10(4)-(9) of the Competition Act of 2007 as provided by the 2014 Amendment Act. 12 So K. Kowalik-Bańczyk, ‘Reforms of Polish Antitrust Law: Closer to, or Farther From, the European Model?’ (2014) Journal of European Competition Law & Practice. 13 Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ [2003] 1/1.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 169 remedies (both behavioural and structural) than the UOKiK President since the new Polish legal provision does not regulated this issue in much detail14. Similarly to the EU, conduct remedies in Poland can be behavioural or structural in nature, albeit behavioural measures are the preferred method. The 2014 Amendment Act provides an open catalogue of behavioural remedies, naming four types ‘in particular’. Hence, the UOKiK President may: 1) order an IPR licence to be granted, 2) grant access to certain infrastructure, or 3) deliver to other entities goods or provide certain services. All these three remedies must be performed in anon-discriminatory manner. Moreover, the UOKiK President may also 4) change any concluded contract15. In light of the above, a question thus arises: will the UOKiK President also be able to impose on the investigated undertaking the obligation to remedy harm resulting from their antitrust infringement16? According to the new text of Article 10(5) of the Competition Act of 2007, the UOKiK President may impose structural remedies aimed at the reorganisation of an undertaking’s business. Structural remedies may provide for the ‘allocation’ of a given economic activity to specific entities within the offender’s capital group, or to an organisationally separate unit within the structure of the offender. This may pertain, for instance, to a wholesale activity of a vertically integrated business. These exhaustedly listed forms of structural remedies can be imposed only if using behavioural remedies would not be effective, or if other measures – while equally effective – would prove more burdensome for the undertakings concerned. The powers of the UOKiK President do not go so far, however, as to allow him to oblige an undertaking to change the subject matter of its business(for instance, to start a new economic activity)17. Behavioural and structural conduct remedies must be proportionate to the gravity and type of the infringement at hand. They must also be necessary to bring the violation to an end, and to remove its effects18. The expected positive
14 See more A. Piszcz, ‘Kilka uwag do projektu założeń ustawy o zmianie ustawy o ochronie konkurencji i konsumentów’ [‘A few remarks on the draft assumptions for an Act amending the Act on competition and consumers protection’] (2012) 2(1) internatowy Kwartalnik Antymonopolowy i Regulacyjny 10, available in Polish at http://www.ikar.wz.uw.edu.pl/; A. Maziarz, ‘Kilka uwag do projektu nowelizacji ustawy o ochronie konkurencji i konsumentów’ [‘A few comments on the Draft Amendment to the Act on Competition and Consumers Protection’] (2013) 7(2) internetowy Kwartalnik Antymonopolowy i Regulacyjny 9, available in Polish at http://www.ikar. wz.uw.edu.pl/. 15 Article 10(4)-(6) of the Competition Act of 2007 as provided by the 2014 Amendment Act. 16 So A. Stawicki, B. Turno (WKB), Istotne zmiany w prawie konkurencji [Essential changes in competition law], available at: http://wkb.com.pl/en/node/19?id=273. 17 So also K. Kowalik-Bańczyk, ‘Reforms of Polish Antitrust Law…’, p. 5. 18 Article 10(6) of the Competition Act of 2007 as provided by the 2014 Amendment Act.
VOL. 2015, 8(11) 170 TADEUSZ SKOCZNY results of this new instrument will primarily depend on the successful dialogue between the UOKIK President (who is obliged to inform the undertakings about his intention to impose certain conduct remedies) and the investigated undertakings. This realisation has the potential to enhance ‘negotiated’ enforcement of competition law – undertakings have, in this context, the right to express their position on the authority’s proposals. Later on, they also have an obligation to provide the UOKiK President with information on the extent of the implementation of the imposed conduct remedies19.
2. Leniency and Leniency Plus
Since 2004, the UOKIK President has been able to completely refrain from imposing an antitrust fine, or to reduce the level of such fine, with respect to an undertaking which had participated in a prohibited anti-competitive agreement. The appropriate provisions are now found in Article 6(1) Competition Act of 2007 or Article 101(1) TFUE20 (leniency procedure/programme). Despite the fact that the Polish leniency programme under the Competition Act of 2007 referred to the 2006 Commission Notice on Immunity from fines and reduction of fines in cartel case21, it was actually widely criticised for being imperfect22. Nonetheless, Poland saw a repeated use of leniency in recent years, albeit, interestingly, it has mostly been used in vertical cases (rather than horizontal). Unfortunately, the possibility to use leniency with respect to vertical agreements has still been preserved, despite the many improvements introduced by the 2014 Amendment Act. These improvements include the incorporation into the Competition Act of the provisions of the Implementing Regulation of2009
19 Article 10(7)–(9) of the Competition Act of 2007 as provided by the 2014 Amendment Act. 20 Article 109 of the Competition Act of 2007. 21 OJ [2006] C 298/17. 22 See more B. Turno, Leniency. Program łagodzenia kar pieniężnych w polskim prawie ochrony konkurencji [Leniency. A program to reduce fines in Polish competition protection law], Warszawa 2013, passim. See also: K. Rumak, P. Sitarek, ‘Polish Leniency Programme and its Intersection with Private Enforcement of Competition Law’ (2009) 2(2) YARS 99; P. Sitarek, ‘The Impact of EU Law on a National Competition Authority’s Leniency Programme – the Case of Poland’ (2010) 7(9) YARS 185; D. Hansberry-Bieguńska, ‘Polish Leniency and Competition Procedures – Shifting Sands for Applicants’ (2011) 5 Competition Law International 59; M. Król-Bogomilska, ‘Program łagodzenia kar pieniężnych (leniency) w polskim prawie antymonopolowym – po pięciu latach obowiązywania ustawy’ [‘A programme to reduce fines in Polish competition law (leniency) – after five years of the law’s applicability’] (2012) 4 Europejski Przegląd Sądowy 4–5; K. Kowalik-Bańczyk, ‘Programy łagodzenia kar (leniency) w Unii Europejskiej i w Polsce a zasada pewności prawa’ [‘Programmes to reduce fines (Leniency) in the European Union and Poland and the legal certainty principle’] (2013) 5 Przegląd Ustawodawstwa Gospodarczego 19.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 171 which regulates conditions for obtaining leniency23. In accordance with the ECN Model Leniency Programme24, the only requirement for a leniency applicant contained in the revised version of the Competition Act of 2007 is now to end the infringement as soon as possible (rather than immediately) after lodging a leniency application25. It thus also allows for the use of leniency by the initiator of the agreement; solely those participants that were persuading others to take part are precluded from benefiting from the programme26. As the UOKiK President strongly desired, the changes introduced by the 2014 Amendment Act are meant to improve the attractiveness of Polish leniency so as to increase the number of undertakings applying for immunity and fine reductions. First of all, the earlier fine setting system for the 2nd, 3rd and further applicants has been changed and has finally become more in line with the EU standard. According to the new system, the 2nd, 3rdand further leniency applicants can now receive a reduction of, respectively,30-50%, 20-30% or 20% of the fine which would have been imposed if they had not applied for leniency27. Second, in order to improve the attractiveness of the Polish programme, the 2014 Amendment Act introduced also extensive safeguards against the disclosure of documents submitted by leniency applicants28. Some commentators wonder whether the introduction of such far reaching protection of leniency documents might not create a clash between the new Polish provisions and the jurisprudence of the CJEU in Pfleiderer and Donau Chemie29. The Polish legislator found their introduction necessary, however, in order to shield leniency applicants from damage claims, and in order to prevent discouraging potential applicants from using the programme30. The Polish leniency programme was also enhanced by the 2014 Amendment Act through the introduction of the ‘leniency plus’31 instrument, mirroring solutions existing in the USA and some EU member states, such as the UK32.
23 See Rozporządzenie Rady Ministrów z dnia 26 stycznia 2009 r. w sprawie trybu postępowania w przypadku wystąpienia przedsiębiorców do Prezesa Urzędu Ochrony Konkurencji i Konsumentów o odstąpienie od wymierzenia kary pieniężnej lub jej obniżenie (Journal of Laws No. 20, item 109) (unavailable in English). 24 Available in revised form from 2012 at: http://ec.europa.eu/competition/ecn/mlp_ revised_2012_en.pdf. See more K. Kowalik-Bańczyk, ‘Reform of Polish Antitrust Law…’, p. 2. 25 Article 113a(6) of the Competition Act as provided by the 2014 Amendment Act. 26 Article 113b point 3 of the Competition Act 2007 as provided by the 2014 Amendment Act. 27 Article 113c(2) of the Competition Act 2007 as provided by the 2014 Amendment Act. 28 Article 70(1) in connection with Article 113a-113k as provided by the 2014 Amendment Act. 29 A. Stawicki, B. Turno, Istotne zmiany…, p. 1. See also P. Sitarek, ‘The Impact of EU Law…’, p. 195. 30 So K. Kowalik-Bańczyk, Reforms of Polish Antitrust Law…, op. cit., p. 3. 31 Article 113d as provided by the 2014 Amendment Act. 32 See more M. Martyniszyn, M. Bernatt, ‘On Convergence with Hiccups. Recent Amendments to Poland’s Competition Law’ (2015) 1 European Competition Law Review 10.
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This instrument allows a leniency applicant, which had failed to qualify for full immunity (i.e. 100% reduction of a fine) with respect to an illegal practice, to get an additional (‘plus’) reduction of the fine imposed for its participation in that prohibited agreement. Such company can receive such ‘plus’ reduction in exchange for disclosing a separate, yet unknown, illegal anti-competitive agreement on a different market, provided the leniency plus applicant co-operates with the competition authority in that regard. This means that a whistleblower may receive full immunity (a 100% reduction of its fine) under general leniency rules for the additionally disclosed agreement, as well as a fine reduction in the original case. As a result of this legal change, the UOKiK President expects an increase in the number of applications overall, even if leniency plus is no more that merely an option available to undertakings. However, Polish leniency plus offers many significant benefits to interested undertakings and yet presents them with few risks. When considering filing a leniency plus application, those that participate in an anti-competitive agreement are aware of the set – and very high – level of fine reductions (always 30%) attached to the disclosure of every new illegal agreement separately. In each such case, the leniency plus applicant secures for itself the 1st position in the leniency line for the additional agreement. The whistleblower is also not excluded from the circle of entities which can apply for immunity. It must only refrain from its own participation in such agreements, at least at the moment of delivering its leniency plus application. For all these reasons, cartel participants may try to use leniency plus to secure for themselves immunity from future fines. Finally, it is likely that a significant increase in the number of leniency applications will also result from a general change in Poland’s competition law enforcement system whereby fines can now be imposed upon individuals (see below), and both leniency, as well as leniency plus, will now be open not just to undertakings but also to their ‘managing persons’33.
3. Settlement procedure
Up until 2014, the leniency programme was the only element of the Polish competition law system that provided the opportunity to gain a fine reduction for an antitrust infringement34. The 2014 Amendment Act introduced a completely new legal instrument, called in Polish ‘a voluntary submission to a fine’ (in Polish: dobrowolne
33 Article 113h-113j of the Competition Act 2007 as provided by the 2014 Amendment Act. 34 Article 109 of the Competition Act of 2007 with the op. cit. implementing regulation of 26 January 2009 (Journal of Laws No. 20, item 109).
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 173 poddanie się karze)35, which should simplify and enhance, in particular, accelerate competition proceedings before the UOKiK President. Indeed, the essence and purpose of the new instrument is to shorten the length of antitrust proceedings thanks to a form of consensus reached between the authority and parties. Hence, the procedure allows both the authority and the parties to save major resources. The settlement procedure introduced into EU law in 199836 has the same essence and purpose. However, for no apparent reason, the Polish procedure differs from its European prototype. Similarly to the leniency programme, settlement in Poland can namely be used in any type of antitrust cases. These include not only horizontal, but also vertical anti-competitive agreements, as well as the abuse of a dominant position37. The law makes it possible for infringers (undertakings or individuals) of antitrust prohibitions to settle the case with the Polish competition authority in exchange for a 10% reduction of the fine to be imposed for the violation to which the undertakings admit to. That reduction is only available to those who voluntarily submit to the fine and agree not to appeal it (if an appeal is submitted, they lose the ‘discount’). Hence, the use of the settlement procedure is much faster in providing undertakings with legal certainty, since they will not have to further preoccupy themselves with eventual court proceeding (judicial review). Incidentally, the Polish settlement procedure introduced by the 2014 Amendment Act is partly also modelled on the German and the French system38, rather than just on the procedure employed by the Commission. It will take time to discover whether the Polish settlement will fulfil all of the abovementioned expectations. The Competition Act of 2007 states that a settlement procedure may be offered after the main competition proceeding is completed, but before the decision is issued. Yet before settlement talks can even begin, most procedures before the Polish competition authority would have already taken many months. Moreover, the period between the moment when the UOKIK President starts to discuss a settlement (ex officio or on a party’s motion) and the time when he actually takes his final decision may also be long. During settlements talks, all parties involved in the infringement, which have accepted the authority’s invitation to settle, must be informed of the initial findings established in the proceeding. The UOKiK President
35 Article 89a of the Competition Act of 2007as provided by the 2014 Amendment Act. 36 See Commission Regulation (EC) No 622/2008 of 30 June 2008 amending Regulation (EC) No. 73/2004, as regards the conduct of settlement procedures in cartel cases, OJ [2008] L 171/3. 37 Article 89a(1) of the Competition Act of 2007 as provided by the 2014 Amendment Act. 38 See in details M. Martyniszyn, M. Bernatt, ‘On Convergence with Hiccups…’, p. 10.
VOL. 2015, 8(11) 174 TADEUSZ SKOCZNY must also inform them of his anticipated decision, including the extent of the expected fine. The parties must give first their initial and later their formal settlement statement to the authority’s proposal whereby they assume liability (but not guilt) for the given infringement and accept the level of the reduced fine. Both the UOKiK President as well as the parties may withdraw from the settlement procedure at any stage. In such situations, however, any information or evidence obtained by the authority within the settlement procedure cannot be used as evidence in the given (or any other) proceedings before the UOKiK President. The negotiated character of the settlement procedure makes it possible to hope for an improvement in the overall efficiency level of competition law enforcement in Poland39. However, the procedure has an administrative character and thus the UOKiK President plays the dominant role here. Even reduced, the fine ultimately imposed by the UOKiK President has an administrative character as well. Finally, it is a common belief that the2014 Amendment Act failed to introduce appropriate safeguards guaranteeing the observance of the rights of undertakings, safeguards at last comparable to those of penal law40. As the extent of the fine reduction for using the settlement procedure is not especially high in Poland (10%), it is the lack of appeals, rather than the fine reduction, that might prove a stronger motivating factor for companies to use this procedure. However, lack of judicial review of cases decided with the use of settlement may also be seen as a weakness of this legal instrument. Still, it is rather doubtful whether this can be the basis for the accusation that this legal tool is actually contrary to Article 6 of the European Convention on Human Rights and Fundamental Freedoms41. Moreover, the consequences of the use of settlement on possible private antitrust enforcement are as yet unknown.
4. The introduction of fines for individuals
The Competition Act of 2007 provides a set of financial penalties for breaking competition rules, including fines for breaking the restrictive practices prohibitions42. In general, these fines are imposed on undertakings. Fines for antitrust violations could, until the 2014 Amendment Act, be imposed on an
39 See E.D. Sage, ‘Increasing Use of „Negotiated” Instruments of European Competition Law Enforcement towards Foreign Companies’ (2014) 7(10) YARS 235. 40 So A. Piszcz, ‘Kilka uwag…’, p. 10; K. Kowalik-Bańczyk, ‘Reforms of Polish Antitrust Law…’, p. 4. 41 See K. Kowalik-Bańczyk, ‘Reforms of Polish Antitrust Law…’, p. 4. 42 Articles 106 para 1 points 1–2 of the Competition Act of 2007.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 175 individual only if he/she was also an “undertaking”. Irrespective of the above, individuals remain subject to criminal liability for their participation in bid- rigging agreements (criminal offence)43. As a result, individuals that are not undertakings (e.g. managers) could thus far only be fined for not implementing administrative decisions and judgements, not notifying a concentration, not supplying information demanded by the UOKIK President, or not co-operating during an inspection44. The Polish competition authority was very keen to use the 2014 Amendment Act to toughen the national antitrust enforcement regime. It thus introduced – for the first time in Poland – the possibility to impose financial penalties on managers (‘managing persons’). According to the Competition Act, manages of undertakings can now be fined for ‘letting a violation take place’ of the ban placed on anti-competitive agreements (Article 6(1)(1)-(6) Competition Act of 2007 or Article 101(1)(a)-(e) TFEU). Hence, liability of natural persons covers both horizontal agreements (thereby going beyond black-listed practices) as well as vertical agreements. Simultaneously however, managers will now also be able to apply for leniency (see above)45. The new Article 4 point 3a of the Competition Act of 2007 defines which individuals could be fined as a ‘person managing an undertaking’. These are, in particular, a ‘person fulfilling directing functions’ or a ‘member of its management board’. The open formula (‘in particular’), and the difficulties in a precise determination who actually ‘fulfils directing functions’ (in different types of companies or at different levels of undertakings), may make it difficult to apply the new provisions in practice. In fact, decisive influence on the decision-making process in an undertaking can sometimes be exercised by a person who is now fluffing managing functions46. Personal liability of managers (even former managers) covers situations when, within their managing function, they intentionally by their actions or omissions allow the undertaking they work for to participate in an anti- competitive agreement47. However, an individual may be found in violation only if such a conclusion was reached with regard to the undertaking this person works for, only in the decision addressed to that very company48 issued at the end of administrative proceedings directed at that company49. This solution implies the possibility of a conflict of interest arising between
43 Article 305 of the Polish Criminal Code. 44 Article 108 of the Competition Act of 2007. 45 Article 111h–113j of the Competition Act of 2007as provided by the 2014 Amendment Act. 46 So A. Stawicki, B., Turno, Istotne zmiany…, p. 3. 47 Article 6a of the Competition Act of 2007as provided by the 2014 Amendment Act. 48 Article 106a(2) of the Competition Act of 2007as provided by the 2014 Amendment Act. 49 Article 88(3–4) of the Competition Act of 2007as provided by the 2014 Amendment Act.
VOL. 2015, 8(11) 176 TADEUSZ SKOCZNY undertakings and their ‘managing persons’, a fact that might surface especially during appeals. Individuals (natural persons) can in no way be fined for their actions, or failure to act, dated before the 2014 Amendment Act came into force. The competition authority can impose on an individual a fine of up to 2 000 000 PLN (about EUR 500 000)50. This sum might be regarded as a rather severe penalty, especially when compared to the fine of up to 10% of yearly turnover that can be imposed on undertakings51. It is justified to agree with the rather common criticism of the introduction of fines for individuals into the Polish antitrust system since it ‘seems excessive and disproportional and is not a dissuasive measure’52. Particularly problematic is the subjective scope of the fines to be imposed on the basis of Article 4 point 3a of the Competition Act 2007 and the fact that they are dependent upon the subjective criterion of intentional fault. Importantly also, although such penalty is formally an administrative fine, it is nevertheless a criminal sanction in nature, in the sense of Article 6 of the European Convention of Human Rights (ECHR) according to the so called Engel criteria53. Only actual enforcement practice will show whether this instrument will be effective in combating restrictive practices in Poland, while at the same time managing to avoid violating the right of defence and the presumption of innocence of undertakings. Controversies about this provision centre on the fact that a single UOKiK official will not only conduct the proceedings against the accused undertaking, but also decide on the assessment of the case and the potential imposition of individual fines upon its managing persons.
50 Article 106a(1) of the Competition Act of 2007as provided by the 2014 Amendment Act. 51 Article 106(1) of the Competition Act of 2007. 52 Lately so K. Kowalik-Bańczyk, ‘Reforms of Polish Antitrust Law…’, p. 7. See also A. Piszcz, ‘Osoba zarządzająca’ w rządowym projekcie ustawy zmieniającej ustawę o ochronie konkurencji i konsumentów’ [‘The ‘manager’ in the Government’s Draft Amendment Act to the Competition Act’] (2013) 7(2) internetowy Kwartalnik Antymonopolowy i Regulacyjny 23, available in Polish at http://www.ikar.wz.uw.edu.pl/; Sz. Syp, ‘O odpowiedzialności osób fizycznych w polskim prawie konkurencji – de lege lata nad de lege ferenda’ [‘Individual responsibility in Polish competititon law – de lege lata and de lege ferenda’] (2014) 4(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny 11, available in Polish at http://www.ikar.wz.uw.edu.pl/. 53 M. Martyniszyn, M. Bernatt, ‘On Convergence with Hiccups…’, p. 13. See more A. Błachnio-Parzych, ‘The Nature of Responsibility of an Undertaking in Antitrust proceedings and the Concept of ‘Criminal Charge’ in the Jurisprudence of the European Court of Human Rights’ (2012) 5(6) YARS 939.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 177
5. Inspection powers
The UOKIK President is quite well-equipped when it comes to his powers to conduct different sorts of inspections. However, the Polish competition authority remained unsatisfied with the speed and efficiency of its inspections. Undertakings criticised the original provisions of the Competition Act also, because its rules were not sufficiently precise in specifying the rights of the inspected companies, and because of the lack of judicial control of the UOKiK’s actions taken during inspections54. It is necessary to state at the start that the Competition Act of 2007 continues to differentiate between two general types of inspections of undertakings and of their premises: ‘a control’ (in Polish: kontrola)55 and ‘a search’ (in Polish: przeszukanie)56. Importantly, the two types of inspection were difficult to tell apart57 under the Competition Act of 2007, which regulated controls and searches in a similar manner, albeit the latter remains permissible only with the prior authorisation of the Court of Competition and Consumer Protection (hereafter, SOKiK); the division is thus of a purely formal nature. The 2014 Amendment Act introduced significant changes in this context. First of all, it formally and clearly distinguished its regulation of the two kinds of inspections58, limiting at the same time the type of cases where the conduct of a search is possible. A search can now be performed during proceedings on competition restricting practices conducted by the UOKiK President. It can also be undertaken on request of the European Commission or another National Competition Authority with respect to their own proceedings on competition restricting practices or concentration control59.
54 See more M. Bernatt, Sprawiedliwość proceduralna w postępowaniu przed organem ochrony konkurencji [Procedural fairness in the proceedings before competition authorities], Warszawa 2011 passim. 55 Articles 105a–105b and Article 105e-105l of the Competition Act of 2007as provided by the 2014 Amendment Act. 56 Articles 91 and 105d of the Competition Act of 2007as provided by the 2014 Amendment Act.A control is sometimes called a simple/usual/ordinary inspection while a search is sometimes known as a forced inspection, equivalent to dawn rights; see M. Martyniszyn, M. Bernatt, ‘On Convergance with Hiccups…’, p. 813. K. Kowalik-Bańczyk, ‘Reforms of Polish Antitrust Law…’, p. 5 57 See more M. Bernatt, ‘The powers of Inspection of the Polish Competition Authority. The Question of Proportionality’ (2011) 4(5) YARS 47, 53–55. Please note that the EU law does not divide inspections into two separate types, however differs them in similar way (Article 20 and 21 Regulation 1/2003). So K. Kowalik-Bańczyk, ‘Reforms of Polish Antitrust Law…’, p. 6. 58 Article 105n of the Competition Act 2007as provided by the 2014 Amendment Act. 59 Article 105i and 105n of the Competition Act 2007as provided by the 2014 Amendment Act.
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Second, the 2014 Amendment Act has largely differentiated and clarified the rights of inspectors in a control and in a search. According to the amended provisions, inspectors can now also demand the provision of data carriers related to the subject-matter of the inspection60. By contrast, the 2014 Amendment Act gives, expressis verbis, the UOKiK President a special power to copy data of the inspected undertaking, as well as to seize data storage devices and take them away from the undertaking’s premises to be stored and analysed at the premises of the competition authority61. The 2014 Amendment Act clarified also the list of data carriers, access to which can be demanded or the content of which can be copied or printed, adding written communications and emails to the already existing list62. It also separately listed the possibility to demand ‘access to information systems owned by another undertaking which contain the data of the investigated undertaking related to the subject-matter of the inspection, to the extent to which the inspected undertaking has access to them’63. Third, the 2014 Amendment Act clarified also the role of the SOKiK with respect to his powers in the case of both controls and searches. A control64 may be conducted by the services of the UOKIK President during both explanatory and anti-monopoly proceedings based on a written authorisation given by the UOKiK President. Such authorisation cannot be contested before the SOKiK, or any other court, be it on legal or proportionality grounds. At the same time, the UOKIK President may impose a fine of up to EUR 50 million on an undertaking for denying access to its premises or for its failure to co-operate65. By contrast, in the case of a search (which must still be authorized by the SOKiK)66, the inspected undertaking will be entitled to file a complaint to the SOKiK if the actual search goes beyond the scope established in its judicial authorisation. However, such a complaint will not suspend the search itself67. It is expected that the above provisions should improve the effectiveness of the UOKiK President’s inspection powers. On the other hand, the
60 Article 105b(1)(2) of the Competition Act2007 as provided by the 2014 Amendment Act. 61 Article 105o of the Competition Act 2007 as provided by the 2014 Amendment Act. 62 Article 105b (1)(2) and Article 105g of the Competition Act of 2007as provided by the 2014 Amendment Act. 63 Article 105b (1)(2) in fine of the Competition Act 2007as provided by the 2014 Amendment Act. 64 Article 105a-105b and Article 105d-105m of the Competition Act of 2007as provided by the 2014 Amendment Act. 65 Article 106(2)(3) and (4) as well as Article 108(2)-(6) of the Competition Act of 2007as provided by the 2014 Amendment Act. 66 Article 105n-105q of the Competition Act of 2007, as provided by the Amendment Act of 2014. 67 Article 105p of the Competition Act of 2007as provided by the 2014 Amendment Act.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 179
2014 Amendment Act introduces also new rules that should help guarantee the observance of the rights of undertakings. Accordingly, a UOKiK President’s decision initiating an inspection (both control and search) must clearly indicate a time period for the carrying out of that inspection68. The possibility to contest specifically control activities was extended by adding the right to submit a complaint about control activities and complaints by owners of external information storage devices69. Specifically with respect to searches, the old institution of ‘opposing the start and conduct of search activities’ was replaced by ‘a complaint about search activities’, which can be submitted not only by the entity being searched, but also other entities whose rights have been violated during the inspection. To sum up, the standpoint expressed by some commentators should be supported that certain changes concerning controls and searches (dawn raids) introduced into the Polish competition law system by the 2014 Amendment Act largely mirror both the practice of the European Commission and their assessment by the European Courts70.
III. Simplifying and shortening merger control proceedings
The concentration control model that existed in Poland under the original version of the Competition Act of 2007 had many weakness – both material (e.g. no definition of concentration, control of all joint ventures, rather than only concentrative ones) and procedural (e.g. one-stage-proceeding, lack of a statement of objection)71. It differed, for no apparent reason, from solutions applied at the same time in the EU and in most of its member states. The amendment of the Polish model has thus long since been postulated72.
68 Article 105a(4)(7) of the Competition Act 2007as provided by the 2014 Amendment Act. 69 Article 105m Competition Act of 2007. 70 So K. Kowalik-Bańczyk, ‘Reform of Polish Antitrust Law…’, p. 6. 71 See more T. Skoczny, ‘Polskie prawo kontroli koncentracji’ [‘Polish law of concentration control’] (2010) 5 Europejski Przegląd Sądowy 15. 72 M. Kolasiński, ‘Polityka kontroli koncentracji w Polsce – stan obecny i możliwe zmiany’ [‘Policies for controlling concentrations in Poland – current stataus and possible changes’] (2012) 1(1) internetowy Kwartalnik Antymonopolowy i Regulacyjny 74, available in Polish at http://www. ikar.wz.uw.edu.pl/; D. Wolski, ‘Kierunek zmian w zakresie kontroli koncentracji przedsiębiorców w projekcie nowelizacji ustawy o ochronie konkurencji i konsumentów’ [‘Directions of amendements concerning merger control in the draft of the Amendment of the Competition and Consumers Protection Act’] (2013) 1(2) internatowy Kwartalnik Antymonopolowy i Regulacyjny 1, available in Polish at http://www.ikar.wz.uw.edu.pl/.
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Unfortunately, the changes ultimately introduced by the 2014 Amendment Act related to procedural rules only. According to the Competition Act of 2007 before its recent amendment, notified concentrations were evaluated by the UOKIK President within a one- stage review process, with a statutory period of two months for the issuance of a decision73. In practice, even decisions in cases that did not generate any competition problems were issued at the very end, or even after the laps of the statutory deadline. More complex proceedings lasted approximately 5–6 month, sometimes even longer74. As expected by many scholars and practitioners, Poland will starting from 18 January 2015 finally have a two-stage merger control system, which will replace the earlier one-stage review model. According to the new regime, cases that do not raise any significant competition concerns should be cleared in a simplified procedure, which should last no more than 1 month75. It is expected that about 80% of all notified concentrations will be reviewed and cleared this way. The review process can enter the 2nd stage: for particularly complicated concentrations with a justified probability of a significant competition restriction, or where market research might be necessary. The 2nd stage should last no more than an additional 4 months (on top of the 1 month prescribed for the 1st stage)76. A UOKiK President’s resolution on the extension of proceedings (that is, entering the 2nd stage) is not subject to judicial review and will thus not prolong the entire assessment process77. This is a very good solution and is generally in accordance with the EU merger control system78. Unfortunately, and unlike the EU, the UOKiK President can ‘stop the clock’ during the 1st and 2nd assessment stage every time the authority poses additional questions, or requests new data, information or documents. This can lead to extensions of the merger procedures in both stages. The 2014 Amendment Act introduced another very important change into the Polish merger control system namely the UOKiK President expressing a ‘competition concern’ during the 2nd stage of the procedure, before a final decision is issued. In truth, the UOKiK President’s resolution on the extension
73 Articles 96(1) of the Competition Act of 2007. 74 See more T. Skoczny, Zgody szczególne w prawie kontroli koncentracji [Special clearances in merger control law], Warszawa 2013, passim. 75 Articles 96(1) of the Competition Act of 2007 as provided by the 2014 Amendment Act. 76 Article 96a(1) of the Competition Act of 2007 as provided by the 2014Amendment Act. 77 Article 96a(2) of the Competition Act 2007 as provided by the 2014 Amendment Act. See also K. Kowalik-Bańczyk, ‘Reform of Polish Antitrust Law…’, p. 3. 78 See Article 6 and 8 of the Council Regulation (EC) No. 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation), OJ [2004] L 24/1.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 181 of the investigation to the 2nd stage of the proceedings could already signal that the concentration was causing competition concerns, and could thus potentially prompt undertakings to propose commitments early79. However, on the basis of data gathered after the extension, the authority can now issue a separate statement expressing its competition concerns also during the 2nd stage of the procedure. This is the latest point in time when the UOKiK President will inform the undertakings of his justified concerns about the compatibility of the notified concentration80. The merging undertakings will then have an opportunity to respond to the concern, and to possibly modify the transaction in order to obtain clearance81. This institution can lead to more ‘negotiated’ enforcement of merger control rules as undertakings will now be able to offer modifications to a planned transaction82. Those amendments are likely to reduce the number of prohibitions (avoiding merger bans) and increase the number of conditional clearances in Poland, which are the most common solution to preventive merger control proceedings in advanced competition legal jurisdictions83. Due to changes made also with respect turnover calculation rules, and the introduction of new de minimis exemptions, the 2014 Amendment Act is likely to reduce the number of ‘technical’ notifications of concentrations planned by an undertaking with limited business activity in Poland. This is because under the new version of the Competition Act of 2007, the turnover of the seller will not be calculated for the purpose of meeting the turnover thresholds, the exceeding of which triggers the notification duty. Moreover, the Competition Act of 2007 retains its de minimis exemption from the notification duty for the acquisition of control, or the acquisition of assets, where the target’s Polish turnover had not exceed 10 million EURO in any two proceedings years. Thanks to the2014 Amendment Act, this exemption has been extended to two additional types of concentrations: a full merger and the creation of a joint venture. Such concentrations will now not be subject to the notification duty if the Polish turnover of any undertaking concerned had not exceeded 10 million EUR in none of the two preceding years84. From a practical point of view, one of the most significant, albeit small, changes introduced into the Polish merger control system by the 2014 Amendment Act concerns the deadline for completing a divestment required
79 So K. Kowalik-Bańczyk, ‘Reform of Polish Antitrust Law…’, op. cit. 80 Article 96a(3)-(4) of the Competition Act of 2007as provided by the 2014 Amendment Act. 81 Article 96a(5)-(9) of the Competition Act of 2007as provided by the 2014 Amendment Act. 82 See E.D. Sage, ‘Increasing Use of „Negotiated” Instruments…’, p. 235. 83 See more T. Skoczny, Zgody szczególne w prawie kontroli koncentracji, p. 33. 84 Article 14(1) of the Competition Act of 2007 and Article 14(1a)-(1b) of the Competition Act of 2007 as provided by the 2014 Amendment Act.
VOL. 2015, 8(11) 182 TADEUSZ SKOCZNY as part of a merger remedy package. Before the 2014 Amendment Act, deadlines were clearly stated in the text of conditional clearance decisions. Such approach put the undertaking subject to the divestment condition in a very weak negotiating position against potential buyers. This sometimes ended in breaches of divestment obligations imposed in conditional merger clearances. After the 2014 Amendment, divestment deadlines will be kept confidential until the date of the completion of the imposed conditions, provided the party concerned requests keeping this part of the conditional clearance (deadline) temporally confidential85. Incidentally, the new provision answers the calls of the market only partially. Undertakings spoke, in fact, in favour of confidentiality not only of the deadline for the fulfillment of the conditions, but also of the content of the conditions themselves.
IV. Conclusions
It is too early to evaluate the reforms introduced into the Polish competition law system by the Amendment Act of 2014. The full implications of the new provisions will have to be analysed over the next few months, or even years, not only by the UOKiK President but also by businesses and the academia. For now, the amendment generates mixed feelings. Most of the changes are a definite step (or even a few steps) in the right direction; several may not work as desired. For example, some commentators advocate the changes that have been introduced into the Polish merger control regime and those on the settlement procedure. Amendments with respect to the issue of leniency plus have been received as rather unfortunate86. Unsurprisingly, the introduction of individual fines for managers causes deep concern among businesses. The main questions, ‘to what extent may the newly introduced instruments increase the effectiveness of Polish competition law enforcement?’, and ‘how much simpler and quicker will merger procedures be?’, are generating mostly positive feedback. The generally positive picture of the main changes brought about by the 2014 Amendment Act has been further strengthened by other small, but very welcome adjustments. First, the new version of the Competition Act of 2007
85 Article 19 para 4 of the Competition Act of 2007 and Article 19(4–6) of the Competition Act of 2007 as provided by the 2014 Amendment Act. 86 P. Semeniuk, Sz. Syp, ‘Wylanie dziecka z kąpielą” – czyli o leniency plus w Polsce’ [‘Throwing out the baby with the bathwater” – about leniency plus in Poland’] (2013) 7(2) internetowy Kwartalnik Antymonopolowy i Regulacyjny 31, available in Polish at http://www.ikar. wz.uw.edu.pl/.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES 2014 AMENDMENT OF THE POLISH COMPETITION… 183 extends the limitation period from 1 to 5 years, running from the end of the year when the anti-competitive practice was discontinued. This will broaden the powers of the UOKiK President to pursue infringers. Second, extending the period for appealing a decision of the competition authority from 14 days to 1 month is an important change for undertakings. Unfortunately, the new deadline is still short in comparison to the 2 months allowed within the EU system. The 2014 Amendment Act does not end the process of improving the Polish competition law regime. More changes are expected, some of which have already been proposed many times in the past, for instance during the consultation process for the 2014 Amendment. The fact must be stressed that the recent act did not introduce any changes in Polish substantive competition law provisions. Such amendments have, however, been expected by businesses and academic circles alike, so as to achieve a higher level of conformity of Polish competition law with its EU counterpart. Indeed, about 60% of all proposals that came from academia and the business community ended up being completely omitted during the recent reform87. Unfortunately, the amendment process was also not used to ensure full conformity of the Polish enforcement framework with fundamental rights requirements88. Finally, the specific issue of Legal Professional Privilege (LPP) is still not directly addressed89 by the Competition Act of 200790. In light of the results of the application of the new legal instruments discussed in this paper (especially leniency plus, individual fines and merger control), and taking into consideration the many omitted proposals made by scholars and the businesses community over the last two to three years, a new amendment initiative to further enhance the substantive rules and the enforcement framework of Polish competition law should be started soon. In the meantime, the idea of a further amendment is being accepted also by the representatives of the Polish competition authority.
87 As estimated by M. Martyniszyn and M. Bernat, ‘On Convergence with Hiccups…’, p. 8. 88 As observed by M. Martyniszyn, M. Bernatt, ibidem, p. 13. 89 See more M. Bernatt, B. Turno, ‘Zasada ‘Legal Professional Privilage’ w projekcie zmiany ustawy o ochronie konkurencji i konsumentów’ [‘Legal Professial Privilage in the draft amendment to the Act on Competition and Concumers Protection’] (2013) 1(2) internatowy Kwartalink Antymonopolowy i Regulacyjny 7, available in Polish at http://www.ikar.wz.uw.edu.pl/; M. Bernatt, ‘Convergence of Procedural Standards in the European Competition Proceedings’ (2012) 8 Competition Law Review 255–283. 90 LPP remains to be eventually applied in the case of searches only under the particular provisions of the Code of Criminal Procedure; see Article 105q of the Competition Act of 2007as provided by the 2014 Amendment Act.
VOL. 2015, 8(11)
New Procedural Notices of the Czech Office for the Protection of Competition: Leniency, Settlement, and Alternative Problem Resolution
by
Petra Joanna Pipková*, Ivo Šimeček**
CONTENTS
I. Introduction II. Notice on the Leniency Programme 1. Positive changes to the leniency programme 2. Negative changes to the leniency programme 3. Assessment III. Notice on the Settlement Procedure 1. Settlement procedure 2. Discretionary powers of the Office 3. Participation of all parties to the proceedings (hybrid settlement) 4. Termination of the settlement procedure without the conclusion of a settlement 5. Evaluation IV. Notice on Alternative Problem Resolutions 1. Dismissal of the case 2. Elimination of the competition problem without initiating administrative proceedings 3. Decision on commitments V. Conclusions
* Dr. Petra Joanna Pipková, scientific researcher, Centre for Comparative Law, Law Faculty Charles University; [email protected]. ** Ivo Šimeček, senior associate in Havel, Holásek& Partners, attorneys-at-law; ivo. [email protected].
VOL. 2015, 8(11) 186 PETRA JOANNA PIPKOVÁ, IVO ŠIMEČEK
I. Introduction
In connection with the 2012 amendment of the Czech Act on the Protection of Competition (hereafter, APC), reported in YARS last year1, the Czech Office for the Protection of Competition (hereafter, Office) issued three new procedural noticesin November 2013: Notice of the Office for the Protection of Competition of 4 November 2013 on the application of Section 22ba of the Act on the Protection of Competition (hereafter, Notice on the Leniency Programme), Notice of the Office for the Protection of Competition of 8 November 2013 on the Procedure aimed at the speeding up of administrative proceedings by meansof the application for a reduction of the fine according to Section 22ba(2) of the Act on the Protection of Competition (hereafter, Notice on the Settlement Procedure), and Notice of the Office for the Protection of Competition of 8 November 2013 on alternative resolutions of competition problems and on the dismissal of the matter (hereafter: Notice on Alternative Problem Resolutions)2. This contribution analyzes the aforementioned three new procedural soft-law instruments. The new notices react to changes brought about by the 2012 Amendment of the APC (hereafter, 9th APC Amendment) in Czech competition procedure. The 9th APC Amendment incorporated the leniency programme and the settlement procedure into the APC for the first time in the history of Czech competition law. Furthermore, the amendment introduced the instrument of the so-called prioritisation, i.e. the possibility for the Office to dismiss a matter in caseswhere there is no public interest in its prosecution.
II. Notice on the Leniency Programme
Before the 9th APC Amendment, the Czech leniency programme existed only as a soft-law. Thanks to the new legislation, leniency found its way into Section 22ba of the APC. The new Notice on the Leniency Programme will provide interpretational rules for its application as a tool of cartel investigation. The Notice on the Leniency Programme retains the same structure asits predecessor but it contains changes in its details. Some of these ‘little’ modifications clarify earlier rules and thus represent a change for the better.
1 See R. Neruda, L. Gachová, R. Světnický, ‘9th Amendment to the Czech Competition Act’ (2013) 6(8)YARS 159 ff. 2 All to be found here: http://www.uohs.cz/en/legislation.html.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEW PROCEDURAL NOTICES OF THE CZECH OFFICE… 187
Some of these amendments mean, however, a deterioration of the position of the parties to the proceedings.
1. Positive changes to the leniency programme a) Possibility of preliminary consultations regarding the leniency application
Since November 2013, a leniency applicant may, before lodging an official submission, andalongside the possibility of presenting the information in a hypothetical form, ask the Office to consult with it on the matter. Such consultations have, of course, an informal character and shall help applicants assess whether it is appropriate for them to lodge aleniency submission at all, or which effects would the lodging of suchsubmission have on them. The Office is of the opinion that undertakings will be more motivated to cooperate in the investigation and in proving cartelsthanks to the informality of this procedure. The Office will not be able to use the information and documents obtained during such informal talks in the proceedings if the undertakings decide after the consultations not to lodge a leniency application. This shall serve as an incentive that protects the undertaking requesting the consultation. Informal consultations shall improve the position of potential leniency applicants. b) Non-imposition of the sanction prohibiting the participation in public tenders
The Notice on the Leniency Programme also reflects the fact that the 9th APC Amendment provided for a new type of sanction for bid-rigging cartels. The sanction consists ofplacing the offender on a blacklist prohibiting the included undertakings from participating in public tenders. Such a sanction may have a significant effect on those undertakings whose commercial activities and income derive from fulfilling public contracts. According to Section 22ba para. 3 APC, such a penalty cannot be imposed onsuccessful leniency applicants. The Notice on the Leniency Programme reiterates this rule which is meant to serve as a further incentive for members of bid-rigging cartels to apply for leniency. c) Obligation not to jeopardize onsite inspections
Under the previous notice, a leniency applicant had to terminate its participation in the cartel immediately after lodging its submission in order for
VOL. 2015, 8(11) 188 PETRA JOANNA PIPKOVÁ, IVO ŠIMEČEK the application to be successful. This obligation was modified under the new Notice on the Leniency Programme. Now, an applicant shall not terminate its participation in the cartel if this would jeopardize onsite inspections. This shift reflects the Office’spractical experiences. Successful onsite inspections presuppose a moment of surprise. If one of the members would suddenly terminate its participation in the cartel, other members might be forewarned. Thus, they would gain enough time to prepare for onsite inspections, e.g. by destroying certain documents. For this reason, the Office introduced the new obligation not to jeopardize onsite inspections that shall eliminate such scenarios. d) Keeping leniency applications outside of the case files
Before the 9th APC Amendment was adopted, the Czech law did not contain any provisions on how and where to keep leniency applications. Thus, the practice of the Office of handling the leniency applications (e.g. keeping them outside of the case files) was legally unfounded. The new wording of Section 21c para 3 APC states that leniency applications and related documents (produced both by the applicants and the Office) shall be kept outside the case files until the issue of the statement of objections. The Notice on the Leniency Programme develops this rule further. Similarly, Section 21c para. 4 APC and the Notice on the Leniency Programme regulate the regime of accessing case files containing a leniency submission. Accessing leniency applications and related documents shall now be allowed only for parties to the proceedings and only from the moment of the statement of objections becoming part of the case files. This means that 3rd parties that assert that they have been affected by the Office’s decision will not be allowed access to these documents. This solution will serve as a safeguard for leniency applicantsas they will not have to fear that the information and documents provided to the Office will be (ab)used by 3rd parties. Clearly, if such right of the procedural parties would not have been limited in time, theywould be able to thwart the proceedings. After the issue of the statement of objections, leniency documents will become part of the case files and procedural parties will have an unlimited access to the files. They will, however, not have unlimited use of the files as they may not make copies or take abstracts of leniency documents. General inaccessibility of leniency documents to 3rd parties contradicts, of course, the recent CJEU judgement in the DonauChemie case3. According
3 Case C-536/11 Bundeswettbewerbsbehörde v. DonauChemie AG and Others, ECLI:EU:C:2013:366.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEW PROCEDURAL NOTICES OF THE CZECH OFFICE… 189 to the CJEU, it shall be for the courts to decide in individual cases whether public interest in cartel enforcement prevails over an individual interest in given compensation. On the other hand, the revised Czech rules are perfectly compatible with Article 6 of the new directive on damages actions for breach of competition law4. e) Criminal liability of natural persons
The Notice on the Leniency Programme reacts also to the amendment of the Czech Criminal Code that was carried out together with the 9th APC Amendment. This amendment introduced a special provision on active repentance that effaces criminal liability. According to the new Section 248a of the Criminal Code, criminal liability for participating in a cartel expires if the offender fulfils the obligations for leniency set out by the APC. The Notice on the Leniency Programme specifies that the application of active repentance within the meaning of Section 248a of the Criminal Code requires that the natural person, as the offender, is actively participating in the fulfilment of the requirements set out by the leniency programme by the undertaking. In doing so, the Notice on the Leniency Programme concretises the scope of the participation of natural persons in the leniency programme. f) Conditions foran applicant’s cooperation with the Office necessary for granting leniency
According to the previous leniency programme, a leniency applicant had to cooperate effectively, fully, continuously and responsively with the Office. According to the new Notice on the Leniency Programme, a leniency applicant has to participate actively in the case investigation. It is obvious that previous rules required the applicant to fulfil very broadly defined conditions, a fact that has created considerable uncertainty. In the past, applicants could have done their utmost and still might not have fulfilled, in the eyes of the Office, the conditions of effective, full, continuous and responsive cooperation. This could have lead to the rejection of their leniency application and the loss of its advantages.
4 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, OJ [2014] L 349/1.
VOL. 2015, 8(11) 190 PETRA JOANNA PIPKOVÁ, IVO ŠIMEČEK g) Added value
Unlike the previous notice, the new Notice on the Leniency Programme no longer contains the provision according to which conclusive evidence had more probatory value than other evidence, e.g. in the form of declarations which need further confirmation where contradictions emerge. The new Notice on the Leniency Programme states that significant added value may also be attributed to information and documents that enable the Office to prove a higher gravity or longer duration of the cartel. This makes it possible to submit a leniency application also forentities that cannot provide significant evidence, provide they want to contribute to the enforcement of competition law. h) Summary applications
Already the previous notice contained rules governing cases where the Commission is well placed to deal with the case (i.e. if one or several agreement(s) or practice(s), including networks of similar agreements or practices, have effects on competition in more than three Member States5) and the applicant submits a leniency application to the Commission and makes use of the so-called summary application. The new Notice on the Leniency programme changed the provisions insofar that they now copy the provisions in the ECN Model Leniency Programme. Thus, unlike the previous notice summary applications may be submitted not only in cases of type IA applications but also in cases of type IB and II applications. Further, the new provisions regulate explicitly a summary application marker system. Further changes concern the possibility to submit the summary application by making use of the ECN template and in English language. Finally, the applicant is now obliged to substantiate why the Commission is best placed to deal with the case.
2. Negative changes to the leniency programme a) Tightening of the requirements on the quality of information and documents
Unlike the previous notice, an undertaking applying for leniency type IA has to provide the Office, as the 1st applicant, with information and documents that the Office does not yet have and that enable the Office to conduct onsite inspections. The previous notice did not require for the information
5 See Art. 14 of the Commission Notice on cooperation within the Network of Competition Authorities.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEW PROCEDURAL NOTICES OF THE CZECH OFFICE… 191 or documents to be yet unknown to the Office. Thus, providing a new interpretation of already available information could have theoretically been enough. However, the requirement of ‘not yet known’ could have already been interpreted into the previous notice also. Thus, with the new wording of the requirements, the Office obviously tries to limit the possibility of double interpretation. However, it also tightens the requirements because the Office is not obliged to accept a leniency application if it is based upon information that it already has, although could not interpret correctly until the actual application. This change leads to a higher uncertainty for leniency applicants which cannot know what information and documents the Office already has and, thus, cannot know whether the information and documents it provided will have enough probatory value in order for the Office to accept their leniency submission. b) More advantageous position of the cartel initiator
The previous notice precluded the initiator of the cartel, the party which forced others to remain in the cartel or played a leading role in the cartel for applying for leniency type I. The new Section 22ba para. 1(a) APC precludes that possibility only for those undertakings that forced others to remain in the cartel. The new Notice on the Leniency Programmemerely reiterates this requirement and does not contain the other two preclusions. This may lead to the paradox that the initiator or the leader of the cartel will benefit from full immunity thanks to the leniency programme. The Office, apparently, made concessions to its previous requirements on the quality of the applicant. This seems to be rather unfair towards other cartel members who got involved on the way. c) Returning of the documents
Section 22ba para. 5 APC states that a leniency application may be withdrawn within fifteen days after the expiration of the deadline for its submission to the Office6. This situation entails the risk that the Office will keep the information and documents that have been provided in connection with the leniency application after the submission was in factwithdrawn. This may have adverse effects on the assessment of the behaviour of such a temporary applicant.
6 I.e. fifteen days after the statement of objections was delivered.
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This issue is connected with a further problem in the new Notice on the Leniency Programme. The previous notice contained a provision that, upon request, the Office will return any documents or other materials that were provided in connection with a leniency application to the applicant if leniency was ultimately not granted. This provision was left out from the new Notice on the Leniency Programme.
3. Assessment
The new Noticeon the Leniency Programme entails a number of changes that should be assessed positively, especially the introduction of the informal consultation procedure and considerations of the new sanction of the public tender blacklist. On the other hand, it also entails a set of new rules that seem rather disputable. This concerns primarily the changes in the position of the initiator of the cartel whose position has been much improved by the amendment and the omission of a rule that would govern the treatment of information and documents submitted as part of a leniency application that was withdrawn and not granted. Despite the aforementioned deficiencies, it is to be anticipated that the application of the new leniency programme by the Office will strengthen the readiness of undertakings to actively contribute to the detection of cartels without weakening their legal certainty.
III. Notice on the Settlement Procedure
It was not only the leniency programme that was incorporated into the APC by the 9th APC Amendment. The same took place with respect tothe settlement procedure which has not, until then, been regulated by Czech law in any form whatsoever (neither in ‘hard-law’ nor in soft-law) and yet the Office has been happily applying it since 2008. Nevertheless, without any written rules, the procedure lacked transparency for both the procedural parties and potential applicants.Moreover, the Office came to the conclusionthat it had been far too generously with the procedure (concerning, especially, the amount of fine reductions) and decided to tighten it up. The 9th APC Amendment and the Notice on the Settlement Procedure repre- sent also a paradigm shift. In the past, the Office used the settlement procedure as a means of procedural economy as well as a means of investigating/proving anticompetitive behaviour (next to leniency). The new legal provisions on set-
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEW PROCEDURAL NOTICES OF THE CZECH OFFICE… 193 tlement assign this procedural instrument – in the manner of other European countries – solely to the category of procedural economy. Before, the adoption of the 9th APC Amendment, the Office applied the settlement procedure on at least six instances7, both in cartel (horizontal as well as vertical agreements) and abuse of dominance cases. This is one of the traits that distinguished the Czech procedure from other European jurisdictions, which limit settlements to cartel cases only. The average amount of fine reductions following a settlement was approximately 50% (way above the 10% offered by the Commission); albeit in the last years before the amendment, the discountswerecloser to 20%. The fine reduction was conditional upon admitting the anticompetitive behaviour, its legal qualification by the Office as an infringement, as well as the completion of evidentiary proceedings. With the 9th APC Amendment (especially Section 22ba para 2, 3, 6 and 7 APC), the Czech settlement procedure obtained a clearer silhouette. Accordingly, a party to the proceedings wishing to close the proceedings with a settlement has to submit a settlement application no later than 15 days after it received the statement of objections. The applicant has to admit to committing an infringement of competition law: cartel, unlawful vertical agreement, abuse of dominance or violation of the standstill obligation in merger control. It is clear that the scope of the application of the Czech procedure is still broader than the usual one inEurope. If the Office deems the resulting sanction as adequate, it concludes the settlement and reduces the intended fine by (exactly) 20%. Furthermore, an undertaking that successfully completed the settlement procedure cannot be sanctioned by being placed on the public tenders blacklist (a special sanction for bid rigging). The above-said is the entirety of what the amended APC currently says on the settlement procedure. Therefore, as it was done for the leniency programme, the Office adopted the Notice on the Settlement Procedure.
1. Settlement procedure
In its main part, the Notice on the Settlement Procedure deals with the procedure itself, that is, with the particular steps that need to be taken in order to successfully conclude the procedure. The settlement procedure entails seven particular steps:
7 Case no. S95/2008/KD Kofola/Kofola Holding (vertical agreements); case no. 114/2008/ KD Albatrosnakladatelství (vertical agreements); case no. S52/2009/DP RWE Transgas (abuse of dominance); case no. 147/2008/KD Karlovarskéminerálnívody/HBSW (vertical agreements); case no. S169/2008/KD Henkel/Procter&Gamble/Reckitt Benckiser (cartel); case no. 346/2010/ KD AVE/.A.S.A./van Gansewinkel/SITA (cartel).
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i. initiation of the procedure by the Office: The Office sends a call to the parties to the proceedings in order to determine their interest in a possible settlement. The parties must reply within a period stipulated by the Office in the call. Thus, although it seems according to Section 22ba para 2 APC that the procedure is initiated bya party to the proceedings (submission of the settlement application), in practice, the Office is the ultimate initiator of settlementsas the procedure itself starts long before the actual application for settlement. In order to benefit from procedural economies as much as possible, the Office intends to initiate the procedure as soon as it has a satisfactory idea of the infringement of competition law and liability for it. ii. commencement of the settlement procedure by the Office: After the parties to the proceedings expressed their willingness to conclude (i.e. complete) the proceedings by means of a settlement, the Office officially opens the settlement procedure by sending a written notice. iii. oral hearings with individual parties within the settlement procedure: The Office conducts these hearings bilaterally. During those hearings, the Office summarizes briefly the facts that it had managedto ascertained, the evidence upon which they are based, the legal qualification of the conduct and the envisaged fine. Should the Office determine during the oral hearings that new facts came to light, it closes the settlement procedure in order to gather further evidence. However, this does not mean that the Office and the parties cannot return to the settlement procedureat a later date. In such cases, the settlement procedure starts from the beginning. iv. notice of interest of the parties to the proceedings to continue with the settlement procedure: After the oral hearings are concluded, the Office sends a further call to the parties to reconfirm their interest in concluding the proceedings by way of a settlement within a period stipulated by the Office in the call. v. issue of a brief statement of objections by the Office: If the procedural parties remain willing to conclude a settlement, the Office issues a brief statement of objections containing basic facts, reference to main evidences, legal qualification of the conduct and the amount of fines it intends to impose on the parties. From this moment on (e.g. the moment of the delivery of the statement of the objections to the individual parties), the limitation period of fifteen days begins to run (see Section 22ba para 6 APC). Within this period, the parties have to submit their applications for settlement. The limitation period does not have to be observed only in exceptional cases (hardship clause in Section 22ba para 7 APC).
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vi. application for settlement: It is only now that the parties to the proceedings submitofficial settlement applications according to Section 22ba para 2 APC. The Office calls this an application for the reduction of the fine within the settlement procedure. The application must contain a full and unconditional admittance of responsibility for thecompetition law infringement and aconfirmation of the factual circumstances of the case and of their legal qualification specified in the statement of objections. It must also contain a statement that the given party is familiar with the amount of the fineenvisaged by the Office and that it won’t propose any new evidence or performance of any further procedural actions. vii. issue of a brief decision in the matter: After the parties submit the settlement application, the Office issues a brief decision in the matter. This (the shortness of the decision) is the real advantage of the settlement procedure, of course next to the 20% fine reduction and avoiding the inclusion on the public tender blacklist. The facts and the evidence of the case are described in a very general manner only. Parties injured through the anticompetitive behaviour at hand are usually not mentioned at all, a fact especially advantageous to those who may fear claims for compensation by injured parties. Such a procedure shall not only entail procedural economies for the State and for the parties concerned (parties do not request performing further evidentiary proceedings or procedural actions and do not submit appeals or actions to administrative courts), but it shall also contribute to a faster restoration of competition on the market.
2. Discretionary powers of the Office
In spite of the settlement procedure being advantageous, it is stained by the fact that its application remains entirely within the discretion of the Office, regardless of the wording of Section 22ba para. 2 APC. First, as seen above, it is the Office who initiates the settlement procedure. The Office states in its Notice on the Settlement Procedure that it will always make the decision whether the initiation of the settlement procedure is appropriate and useful on a case-by-case basis. When considering the possibility of using the settlement procedure, the Office shall take into account in each case mainly the nature and seriousness of the anticompetitive behaviour, the current status and development of the administrative proceedings, the number of parties and the expected amount of sanctions, including an assessment
VOL. 2015, 8(11) 196 PETRA JOANNA PIPKOVÁ, IVO ŠIMEČEK whether final sanctions will be sufficient even after their reduction with regard to the nature and seriousness of the offence. The Office shall also consider whether there is established national or EU case law relevant to the given type of anticompetitive conduct. In cases that might provide a precedential guide for further practice, the Office will generally not initiate the settlement procedure so that its conclusions could be reviewed in court proceedings. Furthermore, the Office may break of the negotiations almost during the entire settlement procedure. This possibility is not only limited to cases where further evidence is necessary (as stated above). The Office may, according to the Notice on the Settlement Procedure, terminate the procedure at any time and without having to give a reason. Such termination will, of course, be subject to a possible review by an administrative court, which is not bound by the Notice on the Settlement Procedure; however, its conception is yet unknown. The possibility of an unreasoned termination of the settlement procedure is available also to the parties of the proceedings.
3. Participation of all parties to the proceedings (hybrid settlement)
Unlike the European regime, the Notice on the Settlement Procedure does not allow for a hybrid settlement. Thus, any time one of the parties to the proceedings withdraws its consent to the settlement, the Office will terminate the procedure. If any of the parties does not express its interest in engaging in a settlement at the outset, the Office will not even start the negotiations.
4. Termination of the settlement procedure without the conclusion of a settlement
The settlement procedure may either end with a brief decision in the matter or with a notice on the termination of the settlement procedure. The latter instrument is used when the Office ends the procedure by terminating it without concluding a settlement. If the settlement procedure was terminated in a later stage of the proceed- ings, a problem arises with the documents submitted by the willing procedural parties. The Notice on the Settlement Procedure is trying to solve this problem. It stipulates that documents related to the settlement procedure shall become part of the case files even if the procedure is ultimately terminated. The Office, however, shall not take them into account when issuing a decision in the matter.
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5. Evaluation
First of all, it needs to be stated that the Notice on the Settlement Procedure is a great step forward when compared with the situation before. However, a number of issues should have been resolved differently. The most important of these issues are: the fact that the settlement procedure may be initiated only by the Office, and the fact that the Notice on the Settlement Procedure excludes the use of a hybrid settlement. This limits considerably the provisions set out in Section 22ba para. 2 APC, which states only that the Office shall reduce the fine (the amount of which was notified to the parties by the Office in the statement of objections) by 20% if: the undertaking admits liability for the administrative offence, and if the Office considers such a sanction as sufficient with respect to the nature and seriousness of the administrative offence in question.Para 6 of the same provision states that the application for a fine reduction pursuant to para 2 shall be submitted within 15 days, at the latest, from the day when the statement of objections was delivered to the given party. The APC does not state anything about the Office being the sole initiator of the settlement procedure, or the fact that all parties to the proceedings have to participate in the settlement. If the Office has arbitrary discretion to initiate a settlement procedure, a possible danger of political bias arises. Moreover, this may violate the right of equal treatment in (almost) identical cases. The exclusion of hybrid settlements (reduction of fines) may seem to be justified by the fact that procedural economies cannot be reached in such cases: the Office is required to prepare a full statement of objections, deliver a full decision in the matter and that decision may be appealed. However, even a hybrid settlement is justified. This is because the Office will get rid of a number of possible appellants and those who have settled will faster contribute to the restoration of competition. The fact that the settlement procedure in the framework of the Notice on the Settlement Procedure deviates somehow from the stipulations of Section 22ba APC has led some competition lawyers to the conclusion that the procedure under Section 22ba para 2 APC is not the same as the procedure under the Notice on the Settlement Procedure, that is, that they represent in fact two different settlement procedures8. This is, however, only a theoretical contemplation, which remains to be solved by further practice and the courts.
8 See e.g. the presentation of Kamil Nejezchleb, ‘Narovnání jako procesní institut’ [‘Settlement as a Procedural Institute’] at the conference ‘Aktuální vývoj v právu na ochranu hospodářské soutěže’ [‘Current Developments of the Law on the Protection of Competition’], Masaryk University Brno, 22 May 2013.
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IV. Notice on Alternative Problem Resolutions
The Notice on Alternative Problem Resolutions is the last of the three new procedural notices under review here. Like the Notice on the Leniency Programme, it is a new version of an older notice that has been updated according to the new provisions in the APC. The new Notice on Alternative Problem Resolutions provides for three different procedures of alternative solutions of competition problems: i. elimination of the competition problem without initiating administrative proceedings; ii. decision on commitments; and iii. dismissal of the case. The first and the last solution were already dealt with by the previous notice. The new notice has added the dismissal. These procedures, although quite different in their characteristics, are linked together by the fact that the conduct of the undertaking in question is anticompetitive, and the Office has in principle the right to sanction it, but it refrains from doing so for certain reasons. The Notice on Alternative Problem Resolutions builds upon the principle that the Office, as any other public authority, shall perform its powers with restraint and impose a fine only then, when it is (absolutely) necessary. Furthermore, the Notice on Alternative Problem Resolutions shall help the Office to focus on serious competition restraints that cannot be redressed at all, or that cannot be redressed without imposing a sanction. The Office, as any other competition authority, has limited financial and personal resources, making it unable to deal with all anticompetitive behaviours and thus forces it to select which case to purse. This Notice presents the rules for making such a selection. The first and the second solution (elimination of the competition problem without initiating an administrative procedure and the dismissal of the case) are now based on a new legal provision (Section 21 para. 2 APC). This provisionenables the Office not to initiate proceedings if there is no public interest in the conduct of such proceedings (so-called prioritisation). This enabling provision states that the Office may decide not to initiate proceedings ex officio after a preliminary investigation, if there is no public interest in pursuing the case due to the low level of the detrimental effect of the given practice on competition. Here, the Office shall consider particularly: i. the nature of the conduct and the manner of its execution; ii. significance of the relevant market; and iii. the number of affected consumers.
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1. Dismissal of the case
The Office considers that the anticompetitive effects of an illegal behaviour may be in certain exceptional cases so small that there will be no public interest their prosecution at all. This consideration of the Office is based on the idea of the prioritisation of more important cases (because of the Office’s limited resources). The instrument of “the dismissal of the case” can be used in relation to all kinds of competition law infringements: forbidden agreements (cartels and vertical agreements), abuse of dominance or a violation of the standstill obligation. Unlike the other forms of alternative problem resolution, the Office does not provide for any clear guidelines on the question which cases could fall under this rule. The Office will assess them ad hoc considering whether the anticompetitive conduct had/has no effect on competition or whether the effect was/is very small. The Office is of the opinion that these cases will mostly concern entirely insignificant geographical markets or a marginal number of affected consumers. Such cases could relate to, for instance, Christmas markets in city centres, selling of refreshments at a pool or in a zoo. The Office – to illustrate its conception – gives one example of a case where it would apply the instrument of case dismissal. It concerns the violation of the standstill obligation if this infringement could evidently not lead to a distortion of competition and if the non-imposition of a sanction will not jeopardize the principle of ex ante merger control. The Office is of the opinion that this condition is fulfilled if the concentration could have been approved in a simplified procedure (Section 16a APC) and the parties have ceased implementing the concentration before the Office has acquired knowledge of the infringement. The termination of proceedings with a dismissal has to be performed by drawing a record of the dismissal (Section 21 para. 2 APC). If the proceedings were initiated after a motion of an affected party, a simple record for the files will be accompanied by a written notice to the complainant. The notice has to be justified – a key realisation in light of the principle of due administration, and might prove important should the complainant submit an action to the administrative courts. The complainant obviously cannot submit an action against an administrative decision as there is no decision in the sense of the law. The complainant can also not submit an action for inaction because, as the Supreme Administrative Court stated for instance in its judgement in the Novinová a poštovnís.r.o. case9,
9 Judgement of the Supreme Administrative Court no. 6 Ans 6/2013 of 7 June 2013, Novinová a poštovnís.r.o. v Office for the Protection of Competition.
VOL. 2015, 8(11) 200 PETRA JOANNA PIPKOVÁ, IVO ŠIMEČEK the complainant has no individual right consisting of the obligation of the Office to initiate administrative proceedings. However, it is possible – in theory – to submit an action for unlawful interference. Here, any person who claims that his/her rights were directly affected by an action (that is not a decision) of an administrative authority has standing. The complainant would of course have to substantiate how the dismissal interferes or interfered with his/her rights. In such case, the justification of the dismissal in the notice will play a major role in the qualification of the actions of the Office as unlawful. The Office believes that those undertakings and consumers, who consider themselves as being affected by the illegal behaviour in cases that have been dismissed, will not remain without protection as they can use civil law instruments: damages claims and injunctions. The problem here is that those instruments do not yet work properly in the Czech Republic for a variety of reasons, the most important being lack of competition law knowledge by competent judges. Thus, the affected individuals do have a theoretical possibility to enforce their rights, but their success in real life remains unclear even if their claim is reasonable and sound.
2. Elimination of the competition problem without initiating administrative proceedings If the effect on competition of the anticompetitive conduct in question is low (especially if the infringementwas short lived and its effects can be eliminatedswiftly), the Office has also a second option how to deal with the case – ‘the elimination of the competition problem without the initiation of proceedings’. This option was already included in the previous Notice on Alternative Problem Resolutions, albeit it did not have a legal basis in the APC. Now, it could be claimed that it has ‘sort of’ of a legal basis in Section 21 para.2 APC – the same provision that serves as a legal basis for case dismissals. The Office will assess the suitability of the use of this solution primarily on the basis of the scope of the harmful effects of the conduct in question. If these are limited, or if it can be expected that the scope of the harm will seriously increase if the problem isnot immediately eliminated, the Office will proceed with the elimination of the competition problem without initiating administrative proceedings. However, the Office will embark on this procedure only under the condition that the undertaking or undertakings in question are able to take measures necessary for a swift elimination of the competition problem. In its previous notice, the Office limited the scope of the application of this notice only to less serious infringements (especially vertical agreements with a limited effect).
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Its application scope has been widened under the new notice. Accord- ingly, the competition problem elimination procedure can be applied especially to: i. agreements in general, which means – with regard to the further points on the list – horizontal cartels that have not been implemented yet and the effects of which on competition would have beenlimited; ii. decisions by associations with a negligible ability to unite the conduct of a larger number of undertakings, regardless of whether the agreement includes a hard-core restriction. However, this will apply only under the condition that the aggregate market shares of the association’s members does not exceed 5% and the contents of the decision have not been disseminated among undertakings not participating in the association; iii. vertical agreements with a limited effect on competition, regardless of whether the agreement includes a hard-core restriction or not. However, none of the parties to such agreements may have a market share exceeding 10% and none of the affected markets may be foreclosed by the cumulative effect of the agreements. On the other hand, the instrument of the elimination of the competition problem without initiating proceedings cannot be applied to cases where onsite inspections are conducted or an extensive economic or econometric analysis is necessary. If the Office, on the basis of its preliminary investigations, reaches the conclusion that the case at hand is fit for this procedure, it will send a ‘statement of suspicions’ to the undertakings concerned containing a description of the conduct it considers anticompetitive. From the moment of its delivery, the undertaking has ten days to submit a written reply containing the assurance that it is prepared to eliminate the problem. After this, the Office gives the undertaking one month to submit a proposal of measures that shall eliminate the problem. If the anticompetitive behaviour concerns several undertakings, the proposal has to be submitted by all of them jointly. The proposed measures have to be sufficient – of such a character and intensity that their performance will justify in itself the resignation of an authoritative declaration of the illegality of the conduct and of the imposition of a fine. If the measures are dependent on uncertain circumstances, or they cannot or shall not be performed directly, the Office will not consider them as sufficient. If the Office considers the measures sufficient, it will inform the undertakings of its decision notto initiate proceedings. However, the resignation is not everlasting – it only lasts as long as the undertaking performs the measures, or as long as the circumstances have not significantly changed.
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This solution to a competition problem is considerably fairer to the affected parties than dismissal since it is to be expected that the proposed measures will eliminate the source of the adverse effects on competition. This instrument is thus not just the Office turning a blind eye to a problem, as is the case with dismissals. Instead, it is the fulfilment of the authority’s duties, which do not consist of imposing fines, but of protecting competition.
3. Decision on commitments
Finally, the Office defines alsoin the new Notice on Alternative Problem Resolutions its rules on ‘decisions on commitments’. The latter were already subject to the previous notice, together with the ‘elimination of competition problems’ procedure. Commitments can of course be applied only in already initiated proceedings, which would otherwise end with a condemning decision. The parties to the proceedings have the right to submit to the Office a commitments proposal that should lead to the restoration of competition. Commitments may be submitted fifteen days,at the latest,after the delivery of the statements of objections to the respective procedural party. Should the Office consider them as sufficient and accept them, it will terminate the proceedings with a decision accepting the commitments without declaring the conduct illegal and imposing a fine. In its decision on commitments, the Office can include further conditions and obligations (accepted by the parties) that are necessary to achieve a goal that the Office had previously communicated to the parties. Unlike the two previous alternative competition problem solutions, commitments had a legal basis in the APC already before the 9th APC Amendment10. Nevertheless, the Office has taken the opportunity to amend some of its aspects with the new notice. In particular, the Office has changed its position with regard to the assessment of whether a case is fit for the application of this legal instrument. In the previous notice, the Office built upon the typical feature of the seriousness of an infringement. In the new notice, the Office builds upon the scope of the harmful effects of the conduct, on the possibilities to restore effective competition, or on the needs of extensive conduct changes in order to restore competition (cessation of the conduct is not enough). This is one of the rays of the so-called ‘more economic approach’. Consequently, the use of this instrument is most appropriate forvertical agreements and abuse
10 Prohibited agreements in Section 7 para. 2 APC, abuse of dominance in Section 11 para. 3 APC.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES NEW PROCEDURAL NOTICES OF THE CZECH OFFICE… 203 of dominance. It is worth noting, however, that its application in horizontal cartels is not explicitly excluded. Commitments are, according to the Office, appropriate especially in those cases where, without a swift cessation of the conduct, there is a risk that competition will not able to develop effectively on the affected and related markets, or in cases where the agreement brings efficiencies, but does not fulfil all of the requirements for an exemption and where a simple cessation would lead to a loss of these efficiencies.
V. Conclusions
Overall, in spite of the little flaws contained in the threenew procedural notices, they have to be welcomed for several reasons. First of all, the Office has modernized its soft-law and moved it from the ‘formalistic approach’ box to the ‘more economic approach’ box. Second, in the area of settlements, there is finally a codified set of rules that provides for a certain amount of legal certainty, albeit soft-law instruments have ‘only’ a self-binding nature. However, though the notices were published in November 2013, their application in practice cannot be assessed yet. Thus, it is necessary to await the Office’s future actions that will provide for an interpretation of unclear terms.
VOL. 2015, 8(11)
Competition Policy Developments in Lithuania in 2013
by
Raimundas Moisejevas*, Monika Dapkutė**
CONTENTS
I. Introduction II. Amendments of the Law on Competition 1. Former legal rules 2. The main aim of the amendments and their adoption 3. Suspension of the enforced recovery of the fine and interest III. Case law 1. Obstructing an investigation 2. Control of concentrations 3. Anticompetitive agreements IV. Conclusions
I. Introduction
The most recent Amendment1 to the Law on Competition of the Republic of Lithuania (hereafter, the Law on Competition2) were adopted by the Lithuanian Parliament on 23 December 2013 and came into force on 8 January 2014. The Amendment altered Lithuanian provisions on the payment of fines imposed by the Competition Commission by undertakings. Accordingly, the Law on Competition
* Dr. Raimundas Moisejevas, Advocate and Associated Professor in the Business Law Department, Faculty of Law, Mykolas Romeris University, Lithuania; [email protected] ** Monika Dapkutė, LLM candidate, Faculty of Law, Mykolas Romeris University, Lithuania, and Faculty of Law, University of Savoy, France. 1 Law of 23 December 2013 Amending Articles 33, 39 of the Law on Competition of the Republic of Lithuania (Register of Legal Acts 2014, item 2014-00064). 2 Law of 23 March 1999 on Competition (Official Gazette 2012 No. 42-2041) .
VOL. 2015, 8(11) 206 RAIMUNDAS MOISEJEVAS, MONIKA DAPKUTĖ gives now the fined undertakings the right not to pay their fine until the courts adopt a final ruling in their case. However, annual interest for period of the payment delay will be calculated and added to the original amount of the fine. The following review focuses on the adoption and effects of this Amendment.
II. Amendment of the Law on Competition
1. Former legal rules
Article 39(1) of the Law on Competition provides that undertakings shall pay their fines within 3 months after the publication of the resolution on the website of the Competition Council. Before the amendments, Article 33(3) of the Law on Competition provided that an appeal would not suspend the resolution of the Competition Council unless the court decided otherwise. Before the Amendment, Article 39(2) of the Law on Competition used to provide also that in the event of a justified request submitted by the economic entity at stake, the Council had the right to defer the payment of the fine, or its part, for a period of up to 6 months if that economic entity was not able to pay the fine on time for objective reasons. Moreover, the court had the right to suspend the validity of the resolution of the Competition Council applying the provisional measures procedure provided by Lithuanian Law on Administrative Proceedings3. However, Lithuanian administrative courts used to suspend the validity of the resolutions of the Competition Council only in very exceptional cases4. Usually, undertakings had to pay huge fines within 3 months of the original verdict, although courts have sometimes revised the resolutions of the Competition Council afterwards.
2. The aim of the Amendment and its adoption
The aim of the proposed Amendment5 of the Law on Competition was to protect legitimate interests of undertakings in cases where the courts have not
3 Law of 14 January 1999 on Administrative Proceedings (Official Gazette 2000 No. 85-2566). 4 Judgement no. AS-438-241/2013 dated 20 February 2013 of the Supreme Administrative Court of the Republic of Lithuania; judgement no. AS-602-223/2013 dated 21 February 2013 of the Supreme Administrative Court of the Republic of Lithuania; judgement no. AS-146-246/2013 dated 28 February 2013 of the Supreme Administrative Court of the Republic of Lithuania. 5 Explanatory Memoranda dated 25 April 2013 of the Law Amending Articles 33, 39 of the Law on Competition of the Republic of Lithuania.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES COMPETITION POLICY DEVELOPMENTS IN LITHUANIA IN 2013 207 yet adopted a final judgment and the payment of the imposed fine would have lead to unreasonable restraints of the activities of the fined undertakings. It was alleged in this context that fines imposed by the Competition Council were usually significantly reduced by the courts. For example, a number of cases exist where the Supreme Administrative Court of Lithuania has decided to reduce such fines by a considerable amount (from 27 to 65%)6. There are also cases where the courts annulled the resolutions of the Competition Council in their entirety7. The initial proposal of the Amendment provided that undertakings shall be relieved from the payment of the fine imposed by the Competition Council until a final court judgment is delivered. However, the draft amendment did not contain any provisions regarding financial consequences where undertakings decided to challenge the resolution of the Competition Council. The draft only provided that the imposed fine would have to be paid within the period of 3 months after the adoption of the final judgment. The proposal was thus subject to major criticism from various entities, including the Competition Council. Listed as one of its main negative sides was the argument that the draft could increase the number of legal disputes. The Amendments would thus cause additional litigation costs as undertakings would take advantage of the possibility to postpone the payment of their fines even in the absence of an objective justification for an appeal. Although the Parliament adopted the proposed Amendment, the President did not sign it using her right to veto. The President argued that the proposed rules would allow undertakings to appeal the resolutions of the Competition Council merely in order to postpone the payment of the fine. During subsequent court proceedings, undertakings could then terminate their anti- competitive activity and avoid the fine altogether. After re-consideration, the Parliament supplemented the Amendment with the obligation for the fined undertaking to pay annual interest for the period of time when the payment of the fine was suspended.
6 Judgement No. A822-3003/2012 of the Supreme Administrative Court of the Republic of Lithuania; judgement No. A502-323/2012 of the Supreme Administrative Court of the Republic of Lithuania; judgement No. A858-290/2012, No. A858-293/2012 and No. A858-290/2012 of the Supreme Administrative Court of the Republic of Lithuania. 7 Judgement No. A-502-892/2010 dated 2 September 2010 of the Supreme Administrative Court of the Republic of Lithuania; judgement No. A-520-2136-12 dated 21 June 2012 of the Supreme Administrative Court of the Republic of Lithuania.
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3. Suspension of the enforced recovery of the fine and interest
The Law on Competition provides currently that if the undertaking appeals the resolution of the Competition Council, such appeal shall suspend the recovery of the fine and of the interest incurred. However, if the court upholds the resolution of the Competition Council, the fine will have to be paid to the State budget together with the accrued annual interest amounting to 6%. The interest shall be calculated for the entire duration of judicial proceedings, starting from the first day after the end of the 3 month period given to the undertakings in order to pay the fine. However, the total length of the period for which the interest is calculated should not exceed 180 days. Such legal rule should deter undertakings from appealing against resolutions of the Competition Council merely in order to postpone the payment of the fine. Accordingly, even if the undertaking plans to appeal the resolution of the Competition Council, it is able to pay the fine within the initial 3 months in order to avoid any possible interest payments later on. In case the undertaking has paid the fine but the fine is subsequently reduced or annulled by the court, the fine should be refunded in accordance with the procedure provided under the Law on Tax Administration.
III. Case law
According to the statistics provided by the Lithuanian Competition Council, 20 cases were opened in total in 2013, 8 cases extended and 21 investigations closed. That year, Lithuanian courts upheld 10 resolutions adopted by the Competition Council and obligated the undertakings to pay their fines. Moreover, 26 other cases related to the resolutions of the Competition Council were under consideration of Lithuanian courts of various instances as well.
1. Obstructing an investigation
In 2012, the Competition Council carried out an investigation under Article 5 of the Law on Competition which prohibits competition restricting agreements. The Competition Council suspected bid rigging by UAB LitCon, UAB Rekreacinė statyba, UAB Meliovesta and TŪB Virmalda in public procurement for building installation works8. During the inspection carried
8 Later on the Competition Council terminated the investigation because no proof of bid rigging has been identified.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES COMPETITION POLICY DEVELOPMENTS IN LITHUANIA IN 2013 209 out in the premises of UAB LitCon, a dispute emerged whether all of the requested information was duly submitted to the officers of the Competition Council. An employee of UAB LitCon allegedly left the premises with a document requested by the Competition Council’s representatives returning to the premises only after a while. In the opinion of the Competition Councils, such behaviour created the risk that the requested document could have been damaged or amended and so its evidential value could have been lost. The Competition Council noted that obstructing an investigation is a procedural violation for which the undertaking is liable without evaluating whether the specific actions have caused any actual damage to the investigation. On 17 July 2013, the Competition Council adopted a resolution fining UAB LitCon 615 000 LTL (178 116 EUR)9. This resolution is important because it is the largest fine imposed so far by the Competition Council for an obstruction of an investigation. The resolution of the Competition Council was appealed to the Vilnius Regional Administrative Court. In the first instance the court upheld the resolution of the Competition Council. The court ruled that an employee’s refusal to present a document of an evidential value by removing it from the inspected premises during an inspection shall be considered a serious procedural infringement. However, on 6 November 2014 the Supreme Administrative Court repealed decision of the Vilnius Regional Administrative Court and the resolution of the Competition Council10. The Supreme Administrative Court held that the Competition Council had the right to take only those documents that were directly related to the investigation. The Court thought that the Competition Council have not proved that the document under consideration had any evidential value. Moreover, the Court noted that since the document constituted personal notes of the employee, this document could not have been removed from the premises of the Company UAB LitCon.
2. Control of concentrations
On 18 April 201311, the Competition Council imposed a fine on UAB Lukoil Baltija (the largest crude oil and oil products trading company in Lithuania)
9 Resolution of 17 July 2013 no. 2S-10 of the Competition Council Concerning impediment of investigation by UAB LitCon. 10 Judgement No. A502-1693/2014 dated 6 November 2014 of the Supreme Administrative Court of the Republic of Lithuania. 11 Resolution of 18 April 2013 no. 2S-4 of the Competition Council regarding compliance of actions of UAB Lukoil Baltija and UAB Luktarna with Article 8(1) and Article 9(2) of the Law on the Competition of the Republic of Lithuania.
VOL. 2015, 8(11) 210 RAIMUNDAS MOISEJEVAS, MONIKA DAPKUTĖ for failing to notify a concentration in petroleum retail markets. The fine amounted to 1 177600 LTL (341 056 EUR). The Competition Council found that UAB Lukoil Baltija failed to notify a concentration by way of an acquisition of control over gas stations on the basis of joint venture agreements. The Competition Council initiated an investigation in June 2012 with regard to a set of agreements concluded in 2004-2009 and changes implemented in relation to the management of several gas stations.The Competition Council discovered that after the conclusion of the joint venture agreements, gas station managers were changed and control over another economic entity acquired. According to the provisions of the Lithuanian Law on Competition, control could be acquired, inter alia, if the parties conclude agreements for the lease of a business and receive control over its management and resources. Acquisition of control might be implemented even without the transfer of property rights or shares of the company. The Competition Council held that even if a joint venture agreement is treated as a lease agreement, this does not prevent the acquisition of control. Moreover, in order to determine whether a contract confers control it is important to evaluate the factual circumstances of the case. The legal form of the contract is not as important. The Competition Council also noted that in order to prove the existence of control it is not necessary to establish the existence of de facto control. It is sufficient to show the possibility to determine the strategic behaviour of the undertaking in question. In the case under consideration, UAB Lukoil Baltija had employed the relevant gas stations’ staff, organized oil supplies, set prices of goods and services, applied discount schemes, etc. Therefore, the Competition Council concluded that UAB Lukoil Baltija acquired de jure and de facto control over the gas stations on the basis of the joint venture agreement. It was also held that UAB Lukoil Baltija have not followed the obligation to submit a prior notification of the intended concentration to the Competition Council.
3. Anti-competitive agreements
On 30 July 2012, the Competition Council started an investigation under Article 5 of the Law on Competition that prohibits agreements restricting competition. The Council suspected bid rigging by UAB Milsa and UAB Torita in the context of public procurements carried out by AB Lithuanian Railways. It was alleged that UAB Milsa and UAB Torita, acting in the market of gravel, have coordinated their tender offers. The initial position of the Competition Council was that both companies UAB Milsa and UAB Torita acted as independent and competing undertakings
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES COMPETITION POLICY DEVELOPMENTS IN LITHUANIA IN 2013 211 and concluded an anti-competitive agreement in the scrutinised public tender. However, in was noted during the investigation that UAB Milsa and UAB Torita have many common shareholders. Moreover, some of their administrative staff was closely related by family and cooperation relationship. UAB Milsa and UAB Torita managed to persuade the Competition Council that no anti- competitive agreement took place since both undertakings should be regarded as a single economic entity. Consequently, the Competition Council adopted a resolution on 23 December 2013 to terminate the investigation12. Nevertheless, this is a very important case because it allowed the Competition Council to substantially develop the single economic entity doctrine in Lithuanian competition law. AB Lithuanian Railways, as an interested party, decided to submit an appeal against the resolution of the Competition Council. The Vilnius Regional Administrative Court upheld, however, the original resolution. At the moment, the ruling of the Vilnius Regional Administrative Court is under appealed to the Supreme Administrative Court.
IV. Conclusions
Recent developments in Lithuanian antitrust legislation should be seen as an improvement of the national competition law system. The Amendment adopted in 2013 reflects both the interests of undertakings and the interests of the State as regards payments of fines imposed by the resolution of the Competition Council. The Amendment provides undertakings with more freedom to decide whether it would be reasonable to appeal a resolution adopted by the Competition Council. If the court refuses to satisfy an appeal, the fined undertaking will have to pay not only the fine itself but also the accrued annual interest in the amount of 6%. Such provisions are likely to deter undertakings from challenging resolution only in order to postpone the payment of the fine and yet simultaneously provide a more flexible and effective procedure for the payment of the imposed fines. The enforcement practice of the Competition Council in 2013 is characterized by the imposition of record fines for the failure to notify a concentration and for obstructing an investigation. Moreover, the Competition Council has recognized in one of its cases on anti-competitive agreements that undertakings with closely related business activities and common shareholders
12 Resolution of 23 December 2013 No. 2S-16 of the Competition Council regarding compliance of actions of the undertakings participating in public procurement to Article 5 of the Law on Competition of the Republic of Lithuania.
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YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Recent Developments in the Competition Law of Georgia. Changes Resulting from the Association Agreement
by
Solomon Menabdishvili*
CONTENTS
I. Introduction II. Law on Free Trade and Competition of 2012 III. Recent amendments of the existing Law on Competition IV. Conclusion
I. Introduction
After regaining its independence, Georgia signed the Partnership and Cooperation Agreement (hereafter, PCA) with the European Community in 1996. According to Articles 43 and 44 PCA, Georgia has undertaken to approximate its future laws and standards with those of the European Community. In September 1997, the Parliament of Georgia adopted Resolution #828-IS whereby all legislation and other normative acts adopted in Georgia after 1 September 1998 were to comply with the standards and rules existing in the European Community. In 1996, the Georgian legislator adopted the Law on Monopolistic Activities and Competition; a competition authority – the Antimonopoly Service – was established in the same year to monitor the application of the Law. The authority played an active role in the promotion of fair competition in Georgia for a number of subsequent years. However, after the ‘Rose Revolution’ held
* Solomon Menabdishvili, a lectuter at Tbilisi State University in Georgia; a head of the Center for Competition Law and Consumer Protection in Georgia; [email protected].
VOL. 2015, 8(11) 214 SOLOMON MENABDISHVILI in Georgia in 2003, the newly elected government was of the opinion that Georgia’s antimonopoly legislation and its enforcement authority hindered in fact fair competition because of the widespread corruption present in Georgia at that time. The legislation was thus revoked and a new Law on Free Trade and Competition adopted in 2005 for a transitory period. A new Agency on Free Trade and Competition was created, but with limited institutional powers. The Law on Free Trade and Competition was not practically applied. As a result, undertakings were unrestrained in their market activities: they could merge freely, misuse their dominant positions, and engage in cartel activities. After the war of 2008 between Georgia and the Russian Federation, negotiations begun on a Deep and Comprehensive Free Trade Area (hereafter, DCFTA) between the European Union and Georgia. In this context, Georgia was obliged to meet requirements set forth by the EU as preconditions for the signing the DCFTA agreement. The country was, in particular, obliged to carry out structural and policy reforms. The European Commission published in May 2011 a Country Report on Georgia on the Implementation of the European Neighborhood Policy in 2010. The report stressed Georgia’s preparedness for the DCFTA. The Report stated also that Georgia has made some progress in drafting and adopting strategies and legislation in key areas. According to the opinion of the European Commission, Georgia should successfully accomplish its ongoing reforms. The aim of this article is to show recent developments in Georgian competition provisions and explain the major flaws of its current Law on Competition (adopted in 2012 and extensively amended in 2014).
II. Law on Free Trade and Competition of 2012
Within the preparatory works on the DCFTA, the Government of Georgia started in 2009 working on reforming the domestic competition law system, issuing a Comprehensive Strategy in Competition Policy1 in December 2010. The Document stressed the need to adopt new national legislation that would comply with EU rules. It was also said that establishing a new competition law enforcement agency was necessary, with sufficient power to monitor the application of the new legislation. By the decree of the President of Georgia
1 See, Comprehensive Strategy in Competition Policy, The Government of Georgia, available at: www.government.gov.ge/files/41_32357_225550_Comprehensive20StrategyinCompetition Policy.pdf, 20.07.14.
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No. 143, the Free Trade and Competition Agency was subsequently created in 2010. By the decree of the President of Georgia No. 829, the Free Trade and Competition Agency merged in January 2012 with another independent legal entity of public law – the State Procurement Agency – into a single entity named the Competition and State Procurement Agency of Georgia. On 8th May 2012, the Parliament of Georgia adopted a new Law on Free Trade and Competition (hereafter, LFTC). Despite the progressiveness of the LFTC’s provisions compared to its 2005 predecessor, the new act retained some serious flaws when it comes to the approximation of national legislation with EU rules. According to the LFTC, the holding of a dominant position was not illegal, only its abuse was prohibited. Article 6 LFTC contained an exhaustive list of inadmissible activities of dominant undertakings. This provision had some flaws compare to Article 102 TFEU and so the list has been modified by the amendments introduced in March 2014. Article 7 LFTC prohibited agreements, decisions and concerted practices among economic agents that intentionally and unlawfully distort competition. Article 7 LFTC contained an exhaustive list of inadmissible activities also, and was thus modified in 2014. According to Article 9 LFTC, cartel activities were exempt provided they benefited consumers and: 1. improved production and/or supply; or 2. promoted technical and economic progress. Article 8 LFTC concerned agreements of minor importance. In its original version, the de minimis rule was applicable if the parties’ aggregate market share did not exceed 25% for horizontal agreements, and if each party’s market share did not exceed 40% for vertical agreements. If a multilateral practice contained the characteristics of both a horizontal as well as a vertical agreement and, consequentially, it was difficult to classify it as a horizontal or a vertical agreement, the aggregate share on the relevant market of the parties to the agreement could not exceed 40%. Also this provision was amended in 2014. According to Article 11 LFTC, concentrations were defined as a merger of two or more independent economic agents, when one or more economic agents merge with the other or when two or more economic agents merge as a single new economic agent. A concentration also meant controlling an economic agent through direct or indirect control by means of an agreement. Despite the fact that this provision stressed the importance of concentrations, as they may result in the creation or straightening of a dominant position, the LFTC did not prohibit such activities. Moreover, notifications of concentrations were voluntary allowing (but not obliging) economic agents to notify a planned or
VOL. 2015, 8(11) 216 SOLOMON MENABDISHVILI existing concentration to the Georgian competition authority. The content of this article was modified in March 2014 as well. Finally, state aid could be allowed by the competition authority if it did not significantly distort competition, or did not create a threat for its significant distortion, and its purpose was to develop certain economic activities or economic sectors. The following list of state aids did not require the consent of the Agency: a. State aid issued in case of a force majeure; b. Individual aid of a social character; c. State aid related to regional development; d. State aid provided for the purpose of promoting the conservation of culture and cultural heritage; e. State aid granted for reasons of national security; f. State aid for scientific researches; g. De minimis individual state aid (its amount determined by a governmental decree); h. In cases of tax reduction and restructuring, if the decision on the matter was taken by the Georgian government; i. In cases of the suspension of the payment of tax arrears, ensuring measures, and writing off tax arrears. According to the LFTC, the grantor of the state aid was obliged to submit an application to the Competition and State Procurement Agency, containing information about the aim, its form and its beneficiaries. The grantor was also obliged to prove that the aid in question did not significantly distort competition. The Agency was able to assess the conformity of the state aid with the provisions laid down by the LFTC and issue a legal opinion (within no later than 30 working days from submitting information on state aid) about the non-conformity of the aid. Failure to deliver such an opinion on time would be deemed as consent. If a granted state aid leads to a significant distortion of competition on the relevant market, or if there is an infringement of legislation concerning free trade and competition in relation to the state aid granting procedures, the person who directly suffered damages as a result of the distortion or infringement may appeal a granted state aid to the court. As mentioned, the Competition and State Procurement Agency was established in early 2012 to monitor the application of the LFTC. According to Article 16 LFTC, the main aims of the Agency’s activities were: a) creating favorable conditions for the development of competition in every sector of the economy; b) detecting violations of competition rules by economic agents; c) formulating recommendations in the case of the detection of state actions or decisions that distort competition; d) formulating recommendations related to
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES RECENT DEVELOPMENTS IN THE COMPETITION LAW OF GEORGIA… 217 competition distorting state aid; e) executing responsibilities conferred upon the Agency by the ‘Law of Georgia on Public Procurement’; f) cooperating with state authorities and international organizations with the view to promote free competition in the country. According to the LFTC, the Agency could start an investigation only on the basis of an application and/or complaint (Article 18(1(a)) LFTC). Article 3(m) and (n) determined who could act as an ‘applicant’ and who could be a ‘complainant’. A person having information or evidence on an infringement of Georgian competition rules, even if he/she had not suffered damages directly from the infringement, could be an applicant. The applicant was not considered a party to the proceedings according to Article 22(1) LFTC. By contrast, only an economic agent that had directly suffered damages as a result of an infringement of competition rules could act as a complainant. The complainant was a party to the proceedings and had to bear the burden of proof (Article 22(2) LFTC). Article 19 LFTC concerned the institutional powers of the Agency. Accordingly, the priorities of the authority’s activities would be approved periodically by the Georgian government. Moreover, the Agency was able to consider applications and complaints only in accordance with these priorities. Article 19 LFTC was abolished by the amendments of 2014. In the beginning, the Competition and State Procurement Agency had limited institutional powers. It was not able to deliver final decisions or fine economic agents for their infringements of national competition rules. The authority was obliged to refer a case to the Tbilisi City Court if it found that an infringement of the provisions of the LFTC had occurred. Therefore, final decisions on Georgian competition law cases were left to the judiciary. Under the LFTC, the Agency could only impose fines on economic agents if the latter admitted to a distortion of competition, as revealed in the course of the investigation (Article 26(2) LFTC). Incidentally, the rule has not been changed however (Articles 18(1(f)) and Article 32 of the LFTC as well as the current Law on Competition) whereby the authority is entitled to impose administrative fines of between 1000 GEL to 3000 GEL (around 1305 EUR). on economic agents if they do not submit the requested information, or if they submit incorrect or incomplete information (Article 25(9) LFTC). According to Article 25 LFTC, the Agency was obliged to deliver its decisions no later than 6 months after having taken the decision to launch an investigation. This period could be extended by the Agency depending on the importance and gravity of the case, but it should have not exceeded 15 months. These timeframes were decreased by the amendments of 2014. The LFTC provided sanctions for economic agents only for their infringements of the ban placed on the misuse of a dominant position and on
VOL. 2015, 8(11) 218 SOLOMON MENABDISHVILI cartel activities. According to Article 33 LFTC, the amount of the fine could not have exceeded 10% of the profit made by the economic agent during the previous financial year. If the economic agent did not make a profit during that year, the amount of the fine could not have exceeded 2% of its turnover during the same period of time. Damages caused by the infringement, its duration and its scope should have been taken into account while deciding on the amount of the fine. According to the transitional and final provisions of the LFTC, the act would not apply to the electronic communication sector until 1 January 2016 and to the electricity and natural gas sectors until 1 January 2018 (Article 34 LFTC). Besides, on the basis of Article 1(4) LFTC, the following fields were exempt from the application of the LFTC: a) intellectual property rights; b) interactions envisaged by the ‘Law of Georgia on Securities Market’; c) activities of economic agents in a free economic zone; d) objects of importance for national security; e) labor relations: f) markets the total turnover of which did not exceed 0.25% of the Gross Domestic Product; g) goods and services necessary for defense and public safety.
III. Recent amendments of the existing Law on Competition
Political negotiations between Georgia and the European Union on the DCFTA commenced soon after the war of August 2008; talks on the Association Agreement (hereafter: AA) officially began in July 2010. On 29 November 2013, an official ceremony was held at the Eastern Partnership Summit in Vilnius, to mark the initialing of the AA between the EU and Georgia. The AA was ultimately signed in Brussels on 27 June 2014 by Georgia and the EU which includes a Deep and Comprehensive Free Trade Area. The AA will replace the Partnership and Co-operation Agreement (hereafter, PCA) signed in 1996 as a more comprehensive and politically stronger document than the PCA. The AA aims to achieve qualitatively new and higher levels of co-operation between Georgia and the EU in many important sectors. The AA is around 1000 pages long and provides for the harmonization of the legislation of Georgian with 300 EU laws.2
2 See, ‘The European Union and Georgia have initiated their Association Agreement’, available at: http://www.mfa.gov.ge/index.php?lang_id=ENG&sec_id=464&info_id=16997, 24.07.14.
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The Georgian Parliament has unanimously ratified the AA at an extraordi- nary session held on 18 July 2014. Although it may take several years before all EU member states ratify this agreement, some of the provisions of the AA can be applied provisionally even before the ratification process is completed in Europe (in all EU member states and by the European Parliament)3. With the signing of the AA, Georgia has accepted the obligation to reform almost all areas of its political, economic and social life. The agreement is likely to have a positive impact on the national market, since economic and trade relationships will increase among the parties (after the removal of EU import duties, Georgia may freely export its products to the EU, including those from the agricultural sector). Title IV of the AA concerns Trade and Trade–related Matters. Chapter 10 of Title IV covers competition issues. Under Article 204 AA, Georgia is obliged to maintain comprehensive competition rules effectively addressing all anti-competitive behaviors of economic agents, including anti-competitive agreements, concerted practices and unilateral conduct of enterprises with a dominant market power. Georgian competition rules must also provide an effective control mechanism over concentrations in order to avoid significant impediments to effective competition and abuse of dominance. Under Article 204(2) AA, Georgia must establish a competition authority and equip it with the power to effectively enforce its competition rules. In order to meet the EU’s requirements for the AA, the government of Georgia drafted extensive amendments to the LFTC of 2012. These legislative changes were meant to improve the institutional framework of competition protection in Georgia, promote free competition, and the development of a competitive national market. The Parliament adopted the draft proposed by the government as part of a general completion law reform on 21 March 2014. After its signing and publication by the President of Georgia, the amendments entered into force at the beginning of April 2014. The amendments managed to eliminate some of the original flaws of the LFTC. Even now however, some important provisions of Georgian competition law need to be harmonized still. Discussed below will be the changes introduced into the LFTC in 2014 as a result of the adoption by the Georgian Parliament of the new amendments. It should be noted, first of all, that the title of the Law on Free Trade and Competition (LFTC) has been changed into the Law on Competition (hereafter, LC). Fields outside the application of the LC were decreased; the LC now only exempts: labor relations, intellectual property rights (provided they do not distort or eliminate competition), and interactions envisaged by the law of
3 See, ‘Georgia, EU Sign Association Agreement’, available at: http://www.civil.ge/eng/ article.php?id=27417, 22.07.14.
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Georgia ‘On Securities Market’ (except for cases when these interactions affect competition existing in the domestic goods market and/or distort it, or may result in its substantial distortion (Article 1(4) LC)). The definition of a dominant position was changed also. The LC defines dominance as a position held by an economic agent (agents) acting in a relevant market, which enables it to act independently from competing economic agents, suppliers, clients and final consumers, to exercise a substantial influence on the general conditions of the circulation of goods in the market, and to distort competition. Unless proven otherwise, an economic agent shall not be considered to hold a dominant position if its (their) market share(s) in the relevant market does not (do not) exceed 40%. In a group of two or more, each economic agent shall be considered to hold a dominant position if it does not face significant competition from other economic agents (taking into account the limited accessibility to sources of raw materials and sales markets, entry barriers and other factors) and simultaneously: a) joint share of no more than 3 economic agents exceeds 50% while, at the same time, the market share of each makes up no less than 15%; b) joint share of no more than 5 economic agents holding the most significant share of the market exceeds 80% while, at the same time, the market share of each makes up no less than 15%. The contents of Articles 6 and 7 LFTC were modified to comply with Articles 102 TFEU and 101 TFEU respectively. According to Article 6 LC, the misuse of a dominant position by one or more economic agents is prohibited. Although Article 6 still contains a list of prohibited activities, the list is now not exhaustive. Accordingly, the following actions shall be regarded as an abuse of a dominant position: a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; b) limiting production, markets or technical development to the prejudice of consumers; c) setting discriminatory conditions to equivalent transactions with specific trading partners, thereby placing them in an uncompetitive environment; d) setting such precondition of a contract that impose additional obligations on other parties to the transaction that are not logically connected with the subject of the transaction, and etc. (tying/bundling). According to Article 7 LC, it is currently forbidden in Georgia to conclude agreements, adopt decisions or carry out concerted practice having their object or effect the prevention, restriction or distortion of competition in the relevant market and, in particular: a) directly or indirectly setting (fixing) purchase or selling prices or other trading conditions;
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b) restricting production, markets, technical development or investments; c) dividing markets or sources of supply based on consumers, territories or other factors; d) applying dissimilar/discriminatory conditions to equivalent transactions with specific trading partners, thereby placing them at a competitive disadvantage; e) imposing such additional obligations as preconditions for transactions which by their nature or according to commercial usage have no connection with the subject of the transaction; f) setting such terms of tenders (to ensure material gain or advantage for the concerted economic agents or other parties participating in the public procurements), which cause substantial damage to the legal interests of the purchasing organization. According to Article 7(2) LC, conducts prohibited by Article 7 LC are void unless the exceptions laid down by the LC apply thereto. It should be noted that, according to Article 1951 of the Criminal Code of Georgia, bid rigging in public procurement is punishable if it causes substantial damage to the legal interests of the purchasing organization. The amendments decreased also the thresholds for agreements of minor importance. The following market share thresholds apply according to Article 8 LC since 1 April 2014: • In case of horizontal agreements – 10%; • In case of vertical agreements – 15%; • If it is difficult to classify the agreement – 10%. These thresholds are not applicable to practices covered by the prohibitions of Article 7(1(a)(d)(f). The definition of hard core restriction is not provided by the Law on Competition. Though these three restrictions provided by Article 7 (a)(d)(f) can be qualified as an hard core restrictions. Article 9 has undergone changed also and now provides the same four cumulative requirements enshrined in Article 101(3) TFEU. Article 9(3) authorizes the government of Georgia to adopt for a certain period of time the exemptions on prohibition of contracts restricting competition provided they meet the four requirements. On 1st September 2014, the Government of Georgia has adopted the Resolution #526 on this issue. According to the document, exemptions apply to the following agreements: • concluded between distributor economic agents provided that each of their turnover does not exceed GEL 15 000 000 (around 7 000 000 EUR) during the last fiscal year, and they are not competing economic agents; • concluded between economic agents operating in a motor vehicle sector;
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• technology transfer agreements (in case of competing economic agents market share threshold is 20%, whilst in non-competing economic agents’ case the threshold is 30 percent); • specialisation agreements (market share threshold is 20%); • joint research agreements (market share threshold is 25%). According to Article 11 LC, concentrations substantially distorting effective competition on the goods or service markets of Georgia (or a significant part of Georgia) and resulting in the acquisition or strengthening of a dominant position are inadmissible. A new Article 111 has been added to the LC. On its basis, a pre-emptive notification of a concentration is now compulsory if the value or annual turnover (based on data from the previous financial year) throughout the whole territory of Georgia of individual, as well aggregate, assets of an economic agent(s) (with the exception of the economic agents acting in ‘regulated’ fields) participating in the concentration exceeds the limits stipulated by the ‘Procedure on submission and consideration of notifications about concentration’4. Article 112 provides a list of concentrations exempted from the duty of an advance notification. They include: • minor market share; • rescue concentrations; • temporal control etc. Article 113 is another new provision of the LC prohibiting unfair, dishonest competition. Still, the LC does not provide for any penalties for such activities. Important provisions have been amended regarding the competences of the Georgian Competition Agency. The new body is accountable to the Prime Minister of Georgia; its chairperson is appointed and dismissed by the Prime Minister. The Agency is independent in its activities and decision- making process. Importantly also, it can now start an investigation on its own initiative (Article 18(1(a)) LC) as well as upon an application or complaint. Furthermore, the Agency has been authorized to impose fines under Article 33 LC on economic agents if they infringe the provisions of the LC. The Competition Agency’s main duty is to monitor the application of the LC – that is, to uncover, assess and make relevant decisions within its competences relating to infringements of the LC. In order to fulfill its duties, Article 18 LC makes the Agency able to: a) Request information in relation to a specific case from a relevant economic agent and other interested party about their legal, organizational
4 The Procedure is under preparation.
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and logistic relationship, get acquainted with the relevant documents pertaining to the activities of an economic agent; b) If an economic agent fails to deliver the requested documents, for the purposes of an investigation, the Agency may ask the court to compel such economic agent to submit the information; c) If a complaint is filed, the Agency invites the parties for oral clarifications and, if necessary, organizes meetings with interested parties; d) For the purposes of an investigation, and upon judicial consent, the Agency can carry out on-the-spot inspections of economic agents involved; e) Require an economic agent to bring its activities in line with the requirements of the LC; f) If necessary, invite experts in the process of investigating the case; g) If considered appropriate, the Agency can perform an inquiry with the view of defining the scale of unobserved economy on a relevant market, in order to define the market share indicating a dominant position; h) Upon repeated violation of Georgian legislation by an economic agent holding a dominant position, the Agency can raise the issue of its forced division before relevant bodies if there is an opportunity for organizational and territorial separation of an enterprise, or carry out any other measures provided by competition policy; i) Raise before relevant authorities the issue of the responsibility of an individual (a managing official of an undertaking) who has violated Georgian legislation; j) Ask the court to suspend a given activity of an economic agent temporally, until the Agency delivers its final decision, if there is sufficient evidence that this activity can restrain competition pursuant to Articles 6 and 7 LC. According to Article 25 LC, the Agency is entitled to carry out an on-the-spot inspection of an economic agent against whom a complaint and/or application has been filed. Yet with the contextual meaning of Article 27(7), the Agency does not have the power to inspect an economic agent against which it has started an investigation ex officio. According to Article 25(8) of the LC, the Agency is entitled to submit to the court a motivated petition so as to carry out an on-the-spot inspection. This provision does not require the Agency to get such court permission in advance before carrying out the on-the-spot inspection. Procedural issues of on-the-spot inspections are regulated by the Administrative Procedures Code of Georgia. The latter allows the Agency to start an on-the-spot inspection in exceptional cases without prior permission of the court (for example, if there is an immediate danger of evidence being destroyed). Still, the Agency is obliged to apply for such court permission
VOL. 2015, 8(11) 224 SOLOMON MENABDISHVILI within 24 hours after starting of the inspection and substantiate the urgent need for the inspection (Article 212 of the Administrative Procedure Code). Article 25(8) LC entitles the Agency to carry out on-site inspections of economic agents only in the following cases: • if economic agents and interested persons failed to submit the requested documents /information necessary for the investigation; • a danger exists of information related to the circumstances of the case being destroyed or hidden; • the parties do not fulfill the obligation to submit documentation and information; • if it is necessary to inspect the assets visually. During the inspection procedures, Article 25(10) LC entitles the Agency only to: a. have access to the documentation related to the activities of an economic agent, including financial and economic documentation, regardless of their confidentiality; b. make copies of the documentation; c. receive clarifications on the spot; d. have access to the premises of the legal or factual activities of an economic agent. The Agency may conduct an investigation only within three months after deciding to start the investigation. Taking into consideration the importance and complexity of the case, this time period can be extended up to 10 months. Article 27 LC provides now for a three-year time limitation period for infringements of the LC. The time shall begin on the day on which the infringement is committed. There is no time limitation for repeated or continuing infringements. Penalties for the infringements of the LC are set out in Article 33 LC. The Agency may now impose upon economic agents a fine not exceeding 5% of their annual turnover achieved in the previous financial year. The authority can impose the fine only on economic agents for infringements stipulated in Articles 6 LC and 7 LC. However, as an exemption, the Agency cannot impose a fine on an economic agent from a regulated economic field. According to Article 3(p) LC, regulated economic fields include: commercial banks, investments funds, electronic communications, electricity and natural gas, as well as other sectors with tariffs defined by the government via a resolution. Article 33 LC stipulates a fine of up to 10% of previous year’s turnover for repeated offenders or if the economic agent has not eradicated the legal basis of an infringement. It must be noted that in determining the amount of the fine, regard shall be paid to the damages caused by the infringement as well as its duration and scope.
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Article 331 has been added to the LC. It provides for a leniency programme and grants partial or full immunity to economic agents which simultaneously meet the following conditions: a. admit to the participation in agreements stipulated in subparagraphs “a”, “c” or “f” of Article 7 LC; b. submit to the Agency the identified information in an oral and/or written form and, if necessary, evidence about the agreement stipulated in paragraph “a” before this information becomes known to the Agency from other sources; c. continuously and unreservedly cooperate with the Agency in its investigation of the case. According to Article 33(2)1 LC, immunity does not apply to the sole organizer and/or initiator of an agreement, as well as the person (economic agent) who forced others to participate in the agreement. Economic agents or interested persons may go directly to the court. They are entitled to appeal the decisions of the Agency to the Tbilisi City Court. The Agency is obliged to formulate and issue other legal acts envisaged in the LC no later than by 1 October 2014. The list of these acts includes: a. procedure of the submission and consideration of notifications of concentrations (Article 11(2)1); b. rules and procedures of investigation [Article 25(13)]; c. rules on submitting applications and complaints and procedures and terms related to the admissibility of complaints and applications [Article 23(7)]; d. rules and procedure for the application of the Leniency Programme (Article 33(3)1); e. rules on the methodology of market analysis [Article 5(2)]. Aside from the above, the LC obliges the Georgian government to issue by 1 September 2014 necessary legal acts on de minimis state aid, exceptions from the prohibition of competition restricting agreements, and general rules for the granting of state aids. The competences of the Agency provided by the LC shall be fully enacted upon adopting/ approving the respective legislative acts.
IV. Conclusion
To summarize Georgian legislation in the field of competition law, it is clear that it has undergone a long way of modifications and developments. The current Law on Competition (LC) is more effective than its initial version
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(the Law on Free Trade and Competition issued in 2012). However, although the LC is now better approximated with EU competition rules, it still has some flaws. First, the Competition Agency should have more powers in order to effectively detect infringements. According to the LC, the Agency does not have a clear entitlement to carry out dawn raids. Although it does have such right according to the Administrative Procedures Code of Georgia, its practical execution may be difficult because the authority must notify the relevant (defendant) economic agents about the fact that it received an application/ complaint about its practices or had taken a decision to start an investigation ex officio. Moreover, the Agency does not have the right to seize the property of economic agents. Second, Georgian competition law envisages penalties for infringements of Articles 6 and 7 LC only (equivalent to Article 102 & 101 TFEU). There are no penalties for breaching the pre-emptive notification requirements for concentrations or breaching the unfair competition ban of Article 113 LC. In these cases, the Agency may only require the economic agent to bring their activities in line with the requirements of the LC. Apart from this, it may also raise before relevant authorities the issue of the responsibility of an individual (managing official of an economic agent) who has violated the legislation of Georgia. Third, the law should provide adequate penalties for competition law infringements. Fines of up to 5% turnover cannot be considered as an effective penalty with an adequate deterrent effect, taking into consideration that the price of relevant goods or services increases as a result of a competition law infringement by between 10% and 30%. It can be hoped that these, and other minor flaws of the LC will soon be eradicated and Georgia’s Law on Competition will comply with Article 204 of the Association Agreement.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Protection of Legal Professional Privilege in the European Union, Turkey and Ukraine
by
Hanna Stakheyeva*
CONTENTS
I. Introduction II. Legal privilege under EU competition law 1. Powers of the European Commission and their limitations 2. Factors determining the scope of legal privilege 2.1. Independent v. in-house lawyer 2.2. Nationality of the lawyer 2.3. Nature of documents and purpose of the communications 2.4. Authority conducting the investigation 2.5. Ability to supply enough evidence that legal privilege applies III. Protection of confidential information in Turkey IV. Scope of legal privilege under Ukrainian law V. Concluding remarks
I. Introduction
When investigating suspected violations of competition law, competition authorities have wide powers to inspect an investigated company’s business premises, as well as home residences, private property and vehicles belonging to the management and employees of the company. Moreover, competition authorities can make copies of documents that may help them to complete
* Hanna Stakheyeva, Ph.D, International Legal Counsel, Ketenci Law Firm, Istanbul; [email protected].
VOL. 2015, 8(11) 228 HANNA STAKHEYEVA their investigation. Any written correspondence including letters, faxes, e-mails, notes of meetings, notes of calls, diary entries, hand-written comments about proposed deals, business activities etc. produced by any member of the company could be seized by competition authorities during dawn raids, especially given that much company information is now stored electronically. The only documents that fall outside the scrutiny of competition authorities are those protected by legal professional privilege (hereafter: legal privilege). Normally, confidential (not disclosed to third parties) communications with lawyers made in relation to and in the interest of a client’s right of defence, are protected by legal privilege. The scope of legal privilege varies from one jurisdiction to another. For instance, in common law countries legal privilege also covers communications between in-house lawyers and their clients, provided such communications relate to the clients’ legal position. Civil law jurisdictions tend to limit legal privilege to communications with independent external counsel only and, in most cases, it is justified by the general confidentiality duty biding the legal profession (either by statute or professional rules) which prevents lawyers from disclosing client information. This paper addresses the peculiarities of legal privilege-related rules in a number of jurisdictions and analyses the main similarities and differences between them. It focuses, in particular, on the legal privilege regime in the EU, Turkey and Ukraine. It is suggested in conclusion that some form of convergence in legal privilege rules worldwide would be beneficial for both competition authorities and for the undertakings concerned.
II. Legal privilege under EU competition law
1. Powers of the European Commission and their limitations
The European Commission (hereafter, EC or Commission) has wide investigatory powers in competition law cases. According to Article 20 Regulation 1/2003 on the implementation of the rules on competition laid down in Articles 101 and 102 of the Treaty (hereafter, Regulation 1/2003), the EC is empowered to conduct inspections at the business premises of the company, take copies of or extracts from books/business records, ask for oral explanations on the spot, and undertake other investigations with the view to obtaining information necessary to bring to light infringements
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES PROTECTION OF LEGAL PROFESSIONAL PRIVILEGE IN THE EU… 229 of Article 101 and 102 of the Treaty on Functioning of the European Union. The Commission’s powers in dawn raids are subject to constant revisions in order for them to keep up with technological progress. For instance, the EC revised in March 2013 its Explanatory Note on the conduct of dawn raid inspections at business premises of companies suspected of anti-competitive behaviour1. The revised Note highlights that a company’s obligation to cooperate with EC officials carrying out a dawn raid inspection extends to providing access to all electronically stored data. It is now also specifically provided that a company may be required to provide members of staff in order to assist the inspectors with IT-related tasks such as: temporary blocking of individual email accounts, or removing and re-installing hard drives from computers. In addition, the Note warns companies that when such actions are taken, the inspected company must not interfere in any way with these measures and must inform their affected employees accordingly. In such circumstances, all documents can potentially be discovered and seized by competition authorities in the EU, especially given the fact that most company information is now stored electronically. Thanks to forensic IT techniques, documents can be obtained from servers even if they were modified or deleted. Forensics makes it possible to make a full copy of a company’s server – including all documents, all emails and all other correspondence, whether saved or deleted – in a matter of moments and from anywhere around the globe. At the same time, the investigatory powers of the Commission are subject to various limitations and conditions. For instance, pursuant to Articles 20(3) and 20(4) Regulation 1/2003, the EC has to communicate to the representatives of the undertaking concerned the subject matter and purpose of the inspection prior to actually entering its business premises. The investigatory powers of the Commission are also limited by the need to protect confidentiality. Legal privilege prevents the EC from examining certain written communications between the company and its lawyer(s). However, legal privilege does not prevent an undertaking (client) from disclosing written communications between itself and its lawyer(s) provided the undertaking (client) considers such approach to be in its best interest2.
1 Explanatory note to an authorisation to conduct an inspection in execution of a Commission decision under Article 20(4) of Council Regulation No 1/2003 (2013), available at: http:// ec.europa.eu/competition/antitrust/legislation/explanatory_note.pdf > (accessed 20 June 2014). 2 Case 155/79 AM & S Europe Limited [1982] ECR 1575, para.28.
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2. Factors determining the scope of legal privilege
The right of confidentiality of communication between lawyer and client is recognized as a fundamental, constitutional or human right, ‘accessory or complementary to other such rights which are expressly recognised’3. The principle of legal protection of written communications between a lawyer and his client is recognized as such in various countries of the EU, even though it is not covered by a single, harmonized legal concept4. Hence, the approaches in various EU Member States differ. In some EU Member States, legal privilege is based primarily on the recognition of the very nature of the legal profession; in others, it is justified by the right of defence. There are no uniform principles on legal privilege governing the enforcement of competition law – a fact that ‘adds to the enforcement discrepancies throughout the EU’5. Several EU Member States ‘have chosen to maintain a protection of the legal privilege that is different and at times wider in scope than at the EU level’6. The following factors determine the nature and scope of legal privilege in various jurisdictions: (i) whether the lawyer is external, independent or an in-house counsel; (ii) nationality of the lawyer and whether he is a member of a national bar association; (iii) nature of the document and purpose of the communications; (iv) which authority conducts the investigation; and (v) ability to provide the investigating authority with enough evidence proving that legal privilege applies to the documents concerned.
2.1. Independent v. in-house lawyer
According to the 1979 judgement of the European Court of Justice (hereafter, ECJ) in the AM&S7 case, confidentiality of written communications between lawyers and clients should be protected under two cumulative conditions: (i) the information exchange with the lawyers must be connected to the right of defence of the client concerned, and
3 The view taken by the Consultative Committee of the Bars and Law Societies of the European Community in Case 155/79 AM & S Europe Limited [1982]. 4 The view taken by United Kingdom in Case 155/79 AM & S Europe Limited [1982]. 5 M. Frese, ‘The Development of General Principles for EU Competition Law Enforcement – The Protection of Legal Professional Privilege’ (2001) 3 Amsterdam Center for Law & Economics, Working Paper 20. 6 C. Swaak, ‘Legal Privilege: An overview of EU and national case la’ (2013) No. 65144 e-Competitions (available at: www.concurrences.com, accessed 20 June 2014). 7 Case 155/79 AM & S Europe Limited [1982] ECR 1575.
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(ii) such information exchange must emanate from an independent lawyer which is not bound to the client by any employment relationship. In the more recent Akzo Nobel8 judgement of 2007, the ECJ followed and re-confirmed the requirements for legal privilege established in AM&S. As a result, it concluded that legal privilege does not cover communications between a client and his in-house lawyer because of the lawyer’s employment relationship with the client which affects its ability to exercise his professional independence by taking into account the commercial strategies of his employer. Hence, in-house lawyers are less able to deal effectively with any conflicts that might arise between their professional obligations and the goals pursued by their client. Contrary to the Court’s statement that the above two conditions are common9 in the national legal systems of EU Member States, there are a number of jurisdictions which deviate from these criteria. While France, Finland, Lithuania and the Czech Republic follow the EU approach in terms of limiting legal privilege to external lawyers only; Romania, Bulgaria, Greece and Denmark do not distinguish between in-house and external lawyers. By contrast, legal privilege applies to both external and in-house lawyers in the UK. In Germany, legal privilege may be applicable to in-house lawyers when it is sufficiently proven that a special relationship exists between the lawyer and the client in a given case that ensures that the lawyer enjoys a certain degree of independence10. Moreover, since 2013, communications between companies and in-house lawyers are also protected by legal privilege under Dutch and Belgian laws. The Dutch Supreme Court held in 2013 that ‘in view of the Dutch practice and the guarantees that exist with regard to the practice of lawyers registered at the Dutch bar with an employment relationship, there is no ground to deprive such lawyer of the legal privilege due to the mere fact that he is in an employment relationship with the client’11. Similarly, the Brussels Court of Appeal delivered in 2013 a landmark judgement (case 2011/MR/3 Belgacom) recognising that legal privilege extends to communications with in-house lawyers, including internal emails containing advice given by such lawyers. In its assessment, the court took into consideration the provisions of the Belgian Criminal Code which state that ‘any person whose status or function makes them the recipient of secrets is bound by professional secrecy, except when they have to testify before the courts or when they are bound by law to
8 Case C-550/07 P Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission [2010] ECR I-830. 9 Case 155/79 AM & S Europe Limited [1982] ECR 1575, para. 21. 10 See Regional Court of Bonn, Decision 10.09.2010, 27 Qs 21/10. 11 C. Swaak, ‘Legal Privilege...’, p. 3.
VOL. 2015, 8(11) 232 HANNA STAKHEYEVA disclose these secrets’12. In addition, the Belgian Court made also reference to the right of privacy envisaged in Article 8 of the European Convention on Human Rights, which gives a higher level of protection to ‘correspondence of individuals entrusted with a mission of general interest, where the success of that mission depends on confidentiality of their correspondence’13. Considering these recent developments, it may be concluded that there is a trend towards extending the scope of legal privilege in EU Member States to also cover in-house lawyers14. Hence, the position expressed by the ECJ in Akzo Nobel, ‘the legal situation in the Member States of the EU has not evolved to an extent which would justify a change in the case-law and recognition for in-house lawyers of the benefit of legal professional privilege’15, will potentially be reconsidered in the future. In the end, both in-house and external lawyers are expected to provide independent and objective legal advice; just as clients of both in-house and external lawyers have a right to obtain confidential, profesional legal advice. Moreover, clients should be protected against any obligations to disclose such ‘confidences, as long as the lawyer is acting as a lawyer and not merely as a business adviser’16. For the time being, communications with in-house counsel may however be seized and used as evidence for companies subject to scrutiny by the EC according to the jurisprudence of the Court of Justice.
2.2. Nationality of the lawyer
Legal privilege in the EU applies to any lawyer that is entitled to practice law in one of the EU Member States, regardless of where the client resides. Looking at the Member States however, their approach to this issue varies from one EU country to another. In the UK for example, legal protection
12 V. Lefever, J. Van Acker, ‘The Brussels Court of Appeal recognises legal professional privilege to in-house lawyers (Belgacom)’ (2013) No. 51820 e-Competitions (available at: www. concurrences.com, accessed 20 June 2014), p.1. 13 Ibidem, p. 2. 14 Countries outside of the EU, but with close ties with the EU, also extend the scope of legal privilege. For instance, Switzerland adopted a new law in May 2013 which extends the scope of legal privilege protection to documents located outside lawyers’ premises and drafted before the initiation of proceedings (which were not privileged prior to this law). P. Kellezi, ‘A Swiss law enters into force extending the scope of protection of the legal professional privileg’ (2012) No. 61096 e-Competitions (available at: www.concurrences.com, accessed 20 June 2014). 15 Case C-550/07 P – Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission [2010] ECR I-8301, para. 76. 16 Competition law and legal privilege, Commission on Competition, International Chamber of Commerce [2006] No. 225/630, p. 2.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES PROTECTION OF LEGAL PROFESSIONAL PRIVILEGE IN THE EU… 233 covers communication with any lawyer, not just those that practice law in the EU. The ECJ implied in the AM&S judgment that the EU does not recognize legal privilege for attorneys from outside EU Member States by stating that legal privilege is only ensured for a lawyer ‘entitled to practice his profession in one of the Member States’ but that ‘such protection may not be extended beyond these limits’. This means that documents may not be legally privileged if they are created, for instance, by an American in-house lawyer, then sent to a client in the EU, after which they are seized by the Commission in an EU antitrust investigation. Generally speaking therefore, non-EU in-house or external lawyers would not be afforded legal privilege in the course of EU proceedings. In international disputes, where alleged privileged communications took place in a foreign country or involved foreign lawyers or proceedings, courts defer to the law of the country that has the ‘predominant’ or the ‘most direct and compelling interest’17 in the case. The laws of the country in which the privileged communication took place will normally be applied by the courts.
2.3. Nature of documents and the purpose of communications
As mentioned above, one of the conditions for a communication to be protected by legal privilege in the EU is that such information exchange with the lawyers (document that contains it) must be connected to the right of defence of the client concerned. Again, however, legal privilege covers a wider range of legal advice in a number of EU Member States, such as the UK for example. Legal privilege at the EU level applies to all written communications exchanged after the initiation of administrative procedures in an antitrust investigation. Still, it is possible to extend legal privilege to earlier written communications as well, provided they have a relationship with the subject matter of such procedures18. Legal privilege applies also to preparatory documents drafted exclusively for the purpose of seeking legal advice from external lawyers in the exercise of a client’s right to defence19. If such a preparatory document was drafted
17 Astra Aktiebolag v. Andrx Pharmaceuticals, Inc., 208 F.R.D. 92, 98 (S.D.N.Y. 2002); Golden Trade, S.r.L. v. Lee Apparel Co., 143 F.R.D. 514, 522 (S.D.N.Y. 1992)// Cross-border Attorney, available at: http://www.acc.com/chapters/stlouis/upload/Session3_CrossBorder AttorneyClientPrivilegeIssues.pdf, accessed 20 June 2014. 18 Case 155/79 AM & S Europe Limited [1982] ECR 1575, para. 23. 19 Case C-550/07 P Akzo Nobel Chemicals Ltd and Akcros Chemicals Ltd v European Commission [2010] ECR I-8301, para. 128.
VOL. 2015, 8(11) 234 HANNA STAKHEYEVA for this purpose, this fact should be unambiguously clear from the content of the document itself, or from the context in which the document was prepared. In addition, legal privilege may also apply to internal company documents (i.e. memoranda) reporting legal advice received from external counsel. The General Court clarified in Hilti v European Commission20 that ‘the principle of the protection of written communications between lawyer and client may not be frustrated on the sole ground that the content of those communications and of that legal advice was reported in documents internal to the undertaking’. Hence, any internal documents that report legal advice given by external counsel may benefit from the protection granted to legally privileged documents21.
2.4. Authority conducting the investigation
The privileged nature of a communication depends, to a large extent, on which competition authority conducts the investigation and its specific jurisdiction. Many antitrust investigations in the EU are conducted by a national competition authority (hereafter, NRA) of a given member state. In such cases, the rights and obligations of the companies whose premises are being searched, and the powers of the NCA regarding the seizure of documents, are defined in the applicable national laws of the Member States concerned. In investigations conducted by the Commission, specific national laws are applicable only to the extent that a given NCA provides its assistance in accordance with Article 20(6) Regulation 1/2003 (e.g. concerning the use of coercive measures when there is opposition from the undertaking concerned in conducting the inspections). However, the question of the scope and nature of the documents which the Commission may examine in such situations is determined in accordance with EU law. In practice, ‘as various authorities apply Article 101 and 102 TFEU in close cooperation and may carry out inspections on behalf of their colleagues, circumvention of national safeguards is inherent in the syste’22. NCAs have the power to exchange and use information collected for the purpose of competition law enforcement in the framework of the European Competition Network. Hence, a given NCA can obtain a contested document from an
20 Case T-30/89 Hilti v. Commission [1990] ECR II, p. 163. 21 J. Bellis, ‘Legal professional privilege: An overview of EU and national case law’ (2011) No. 39467 e-Competitions (available at: http://awa2012.concurrences.com/academic/article/legal- professional-privilege-an#nh14, accessed on 28 October 2014). 22 M. Frese, ‘The Development...’, p. 21.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES PROTECTION OF LEGAL PROFESSIONAL PRIVILEGE IN THE EU… 235 authority in another member state that has a more relaxed legal privilege protection regime.
2.5. Ability to supply enough evidence to prove that legal privilege applies
A company might refuse to produce a written lawyer-client communication to the Commission claiming that the document is legally privileged. Doing so, it must however provide the EC with relevant materials proving that the communication in question indeed fulfils the conditions of being protected by legal privilege. Disclosing the contents of the communication is not mandatory in such cases, although the Commission should be allowed a cursory look at the headings of the contested document(s). When the EC is not satisfied with the evidences provided, it can order the investigated company to deliver the communication in question despite its objections. If necessary, the Commission may impose fines or periodic penalty payments on a company if the latter refuses either to supply whatever additional evidence the Commission considers necessary to resolve the issue, or to produce the communication itself (which is not protected by legal privilege according to the EC)23. Hence, it is the duty of the company claiming protection under legal privilege rules to provide enough evidence to persuade the Commission that the requested lawyer-client communication is in fact covered by legal privilege. The undertaking concerned, as well as its lawyers, can try to strengthen their position and protect themselves by clearly marking all documents sent between them as ‘Privileged & Confidential’. In the case of disputes over the applicability of legal privilege to a given document, the latter should be placed in an envelope and can be removed by the EC’s inspectorate from the premises of the company. The inspected company’s representative may ask the Hearing Officer to examine the document and communicate his preliminary opinion on its nature24. In case of an objection and failure to reach an agreement on the issue, the Hearing Officer should deliver a reasoned recommendation to the Commission for its further examination. It will normally not look at the disputed document before
23 Case 155/79 AM & S Europe Limited, para. 31. 24 In the author’s opinion, a better solution to this was suggested by United Kingdom in this case, i.e. if the Commission’s inspector is not satisfied by the evidence supplied by the undertaking, an independent expert should be consulted, and then the European Court of Justice (Case 155/79 AM & S Europe Limited, para. 7). The Consultative Committee of the Bars and Law Societies also suggested that if the undertaking and the Commission cannot not agree as to whether a document is confidential or not, the most appropriate procedure would be to have recourse to an expert’s report, or to arbitration (Case 155/79 AM & S Europe Limited, para. 8).
VOL. 2015, 8(11) 236 HANNA STAKHEYEVA the deadline for appealing the decision to the Court of Justice has lapsed, or before the proceedings before the Court of Justice are closed25.
III. Protection of confidential information in Turkey
There are no specific provisions regarding legal privilege under Turkish law. However, some guidance on the protection of clients’ confidential information is given by the Lawyers Act (Article 36) and the Turkish Code of Criminal Procedure (Article 130)26. Accordingly, a lawyer is prohibited from disclosing information received from a client while performing his duties as a representative of this client and/ or a member of the Turkish Bar Association. Lawyers breaching this obligation may be subject to criminal liability and related sanctions under Article 239 of the Turkish Criminal Code. They might also be subjected to disciplinary sanctions under the Lawyers Acts. Just as in the EU, legal privilege only covers information exchanges between clients and independent, external lawyers. On the other hand, legal privilege applies in Turkey to all information exchanges between a client and his lawyer regarding the client’s right of defence, without any time limitations. Rules on legal privilege may be applicable to lawyers not qualified in Turkey itself, provided they carry out their business activities in Turkey pursuant to its Lawyers Act, since they are subject to the professional rules contained therein. A lawyer is entitled not to permit the confiscation of a document that relates to his client by claiming that the document is covered by legal privilege. In such a situation, the document should be sealed in an envelope – it will then be for the Court to decide if the contested document is indeed protected by legal privilege. Importantly, legal privilege should be claimed directly by the lawyer. Developments in relation to legal privilege at the EU level may well have an impact on the situation within Turkey, especially considering its customs union with the EU27, the on-going harmonisation process between Turkey and the EU, and the position of Turkey as a EU candidate country. The case law of the Court of Justice of the EU has a significant impact of the application of legal privilege in Turkey already.
25 J. Jimenez-Laiglesia, Legal Privilege Handbook, DLA Piper (2013), p. 5. 26 Ibidem, p. 89-90. 27 Article 32 and 33 of Decision 1/95 of the Association Council of 22.12.1995, OJ [1996] L 35.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES PROTECTION OF LEGAL PROFESSIONAL PRIVILEGE IN THE EU… 237
IV. Scope of legal privilege under Ukrainian law
Similarly to the situation in Turkey, the legal basis for legal privilege in Ukraine derives from the confidential character of lawyer-client relations secured by the Law of Ukraine ‘On the Bar and Advocates’ Activity’ (Law on the Bar) and the Rules of Advocates’ Ethics28. Confidentiality is dealt with by Article 10 of the Rules of Advocates’ Ethics29 whereby the ‘observance of the principle of confidentiality is a necessary and the most important precondition for the trust relationship between the advocate and the client, without which proper legal assistance, defence and representation are not possible’. Hence, advocates in Ukraine have the right to keep any information confidential that they receive from their clients, as well as about their clients or third parties in the process of pursuing their professional activities. Advocates are, at the same time, obliged to keep such information confidential with respect to third parties who might demand their disclosure. Disclosure of information covered by advocates’ confidentiality is prohibited in all circumstances. This includes an authority’s unlawful attempts to gain access to such information and the questioning of an advocate in court about circumstances covered by advocate’s confidentiality. It is prohibited to demand that the advocate (or his assistant, trainee, employee) provides information covered by the advocate’s secrecy (Article 23 of the Law on the Bar), as well as to search, inspect and seize documents related to his activity. In the case of an inspection of the advocate’s house or other premises where he carries out his professional activity, the court has to indicate a list of items (documents) that are expected to be found there. The relevant regional council of advocates must be notified in advance about such inspection. Ukraine’s principle of confidentiality is not limited in time. However, information and documents may lose the status of the advocates’ confidentiality upon the written request of the client in circumstances specified by the Law on the Bar.
28 In the Ukraine, a lawyer who also passed an additional qualifying examination is known as an advocate. Passing such examination and becoming an advocate is optional and not required for legal practice. Advocates are members of the Union of Advocates of Ukraine. Other law graduates who practice law without any further qualifications are regarded as Legal Advisers. Legal Advisers can provide the same legal services as Advocates, and have the same rights to appear in court, but they are not subject to the same ethical rules of conduct and disciplinary procedures as Advocates. 29 Rules of Advocate’s Ethings, Ukraine [2012], available at: http://www.unba.org.ua/about/ For_foreign_advocates/2%20Rules%20of%20Advocates%20Ethics.pdf, accessed 20 June 2014.
VOL. 2015, 8(11) 238 HANNA STAKHEYEVA
Legal privilege protects legal advice emanating from Ukrainian-qualified lawyers as well as from foreign lawyers who practices law in Ukraine in accordance with its national laws. Ukrainian advocates recognize the professional status of foreign advocates who practice law in Ukraine pursuant to the Law on the Bar – they are treated with respect and admired (Article 51 of Rules on Ethics). Foreign lawyers must comply with the Rules of Advocates’ Ethics if they practice law in the Ukraine. There is no distinction between in-house or external lawyers in Ukraine since confidentiality is the professional obligation of any legal adviser/ advocate. It covers any information that became known to the lawyer, his trainee, a person that he employs etc. The information covered regards the client and the issues covered by the legal advice sought, the content of such legal advice, the lawyer’s comments and clarifications, documents prepared in that matter, information stored in an electronic format, and other documents and information received by the lawyer in the course of his professional activity (Article 22 of the Law on the Bar). Following the entry into force of the EU Association Agreement, Ukrainian competition law will be subject to further harmonization. This process will impact the scope of legal privilege in Ukraine.
V. Concluding remarks
With the growing role of mass-media and technological progress, competition authorities around the globe are increasingly able to extract information from companies, and to initiate antitrust investigations based on such information. To maximize the chance that important client-lawyer correspondence/ documents are covered by legal privilege, clients should always mark their requests for legal advice as ‘Privileged and confidential: Attorney – Client Communication’. They should also be kept in a safe place in order to prove that they are indeed confidential. It would also be useful to familiarize yourself with the rules on legal privilege in the applicable jurisdiction. In the absence of harmonised EU rules governing legal privilege, it is for the national legal systems of each member state to decide on the specific aspects of the right to defence protection, including legal privilege. Uniform interpretation and application of legal privilege in the EU would improve the efficiency of antitrust procedures and benefit equal treatment of the companies concerned. Legal privilege rules at the EU level are influenced and ‘shaped’ by the national laws and enforcement practice of EU Member States. It is possible that legal privilege at the EU level will, in the future,
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES PROTECTION OF LEGAL PROFESSIONAL PRIVILEGE IN THE EU… 239 also cover information exchanges with in-house lawyers, considering recent developments in the Netherlands and Belgium that support the trend of extending the scope of legal privilege protection to in-house lawyers also. Currently, the scope of legal privilege protection in the EU can be circumvented thanks to information exchanges within the European Competition Network – information legally privileged in one EU member state may be extracted by the NCA of a member state with a less protective legal privilege regime. If Turkey and Ukraine – jurisdictions with different levels of EU law integration – become members of the EU, their competition authorities will join the European Competition Network. Hence, there will be more exchanges of information collected for the purposes of antitrust enforcement between the EC and the competition authorities of Turkey and Ukraine. This will have an impact on the treatment of legal privilege in these jurisdictions. To avoid confusion and commercial risks, as well as to ensure more legal certainty, some form of convergence in legal privilege rules worldwide would be beneficial both for competition authorities and for the undertakings concerned.
Literature
Bellis J., ‘Legal professional privilege: An overview of EU and national case law’ (2011) No. 39467 e-Competitions. Competition law and legal privilege, Commission on Competition, International Chamber of Commerce 2006, No 225/630. Frese M.J., ‘The Development of General Principles for EU Competition Law Enforcement – The Protection of Legal Professional Privilege’ (2001) 3 Amsterdam Center for Law & Economics, Working Paper. Jimenez-Laiglesia J., Legal Privilege Handbook 2013, DLA Piper. Lefever V., Van Acker J., ‘The Brussels Court of Appeal recognises legal professional privilege to in-house lawyers (Belgacom)’ (2013) No. 51820 e-Competitions. Kellezi P., ‘A Swiss law enters into force extending the scope of protection of the legal professional privilege’ (2012) No. 61096 e-Competitions. Reich E.J., ‘Cross-border Attorney – Client Privilege Issues’ CLE Seminar for ACC, 2012. Swaak Ch., ‘Legal Privilege: An overview of EU and national case law’ (2013) No. 65144 e-Competitions. Zeynep E., Legal Privilege Handbook 2013, DLA Piper.
VOL. 2015, 8(11)
C A S E C O M M E N T S
The objectives of competition law and the effective conduct of the infringement proceedings: Judgments of the Court of Bosnia and Herzegovina in BH Telecom and Telekomunikacije RS. Case comment to the Judgments of the Court of Bosnia and Herzegovina No. S1 3 U 003765 10 U of 24 April 2013 (BH Telecom) and No. S1 3 U 007875 11 U of 10 October 2013 (Telekomunikacije RS)
by
Alexandr Svetlicinii*
I. Infringement proceedings of the competition authority
On 16 February 2010 the Competition Authority of Bosnia and Herzegovina (KV)1 initiated an investigation into the potential margin squeeze and discriminatory practices applied by the incumbent telecom operator BH Telecom2. The investigation was prompted by the complaint submitted by an independent telecom operator Akt. online, which claimed that BH Telecom abused its dominant position by obstructing access to the fixed line network and applying discriminatory pricing on call termination services to the domestic providers. BH Telecom is a public telecom operator, which along with Telekomunikacije RS and Hrvatske Telekomunikacije Mostar was declared undertaking with significant market power (SMP) by the sector regulator – Communications Regulatory Agency (RAK)3. Pursuant to the Law on Communications4 public telecom operators are obliged to pro- vide interconnection to their networks. The SMP status allows RAK to regulate the interconnection charges in order to assure that they are cost-based. RAK has approved
* Dr. Alexandr Svetlicinii, Assistant Professor, University of Macau, Faculty of Law; [email protected]. 1 Konkurencijsko vijeće BiH, http://bihkonk.gov.ba/. 2 KV Decision No. 01-05-26-028-11-II/2009 dated 16.02.2010. See Alexandr Svetlicinii, The Competition Authority of Bosnia & Herzegovina commences an investigation into potential margin squeeze practices of the incumbent telecom operators (BH Telecom / Telekomunikacije Republike Srpske), 16 February 2010, e-Competitions Bulletin June 2010, Art. N° 31479. 3 Regulatorna agencija za komunikacije BiH, http://rak.ba/bih/. 4 Zakon o komunikacijama, Official Gazette B&H No. 31/03, 75/06.
VOL. 2015, 8(11) 242 CASE COMMENTS the ‘Reference Interconnection Offer’ to be applied by the public telecoms. Once the formal criteria for interconnection are met by the third party the incumbent provider must set the term for negotiations and conclude them within ninety days from the set date. Akt.online submitted that BH Telecom concluded the interconnection agreement only after one year from the commencement of negotiations. Moreover, according to the complainant, BH Telecom has effectively delayed the implementation of the inter- connection and conditioned it with unrelated requests, which led to termination of Akt. online’s agreements with international operators and caused substantial loss of profit. Akt.online argued before the KV that BH Telecom has abused its dominant position based on the ownership of the essential facility (fixed land line networks) thus preventing liberalization of telecommunications market in Bosnia and Herzegovina. Akt.online explained that it set out to offer call termination service to foreign telecom operators and for that purpose it had to lease the fixed lines from the incumbent telecoms. The complainant argued that following the EU practice in this field call termination charges for international calls should be equal to those imposed on local calls due to the absence of any cost difference for the network owners. At the same time, there was a minimal difference in price between the call termination fees on the wholesale and retail level. Besides alleging the existence of anti-competitive margin squeeze practices, Akt.online submitted that BH Telecom was liable for applying discriminatory conditions to the domestic service providers by offering better terms to the foreign telecom operators that concluded their interconnection agreements directly with the incumbent. On the basis of the available evidence the KV decided to open an investigation and following the analysis of the information supplied by the parties was expected to issue a decision on the merits. The B&H Competition Act mandates the KV to issue its final decision (concerning existence of abuse or absence thereof) within four months after the commencement of the investigation5. The law also allows the KV to extend this period for the further three months where it is necessary for the collection of additional evidence or where the investigation concerns important industries or markets, as could be the case with the telecommunications. On 14 June 2010 the KV ordered the extension of the investigation in BH Telecom case6. As explained in the KV‘s decision the extension was partly caused by the requests of BH Telecom asking for more time to submit the requested documents and prepare for the oral hearing. Upon the expiration of the additional three-month period, the KV has not, however, issued a decision on the merits. In such cases the B&H Competition Act provides that if the KV does not issue an infringement decision within the prescribed time limits, ‘it shall be deemed that concluded agreement or practice of the economic entity is not abuse of dominant position’7. Furthermore, at the request of the undertaking the KV
5 Article 41(1) of the B&H Competition Act (Zakon o konkurenciji, Official Gazette B&H, No. 48/05, 76/07, 80/09) defines the following time limits for the KV‘s procedures/investigations: (a) 6 months for anticompetitive agreements, (b) 3 months for individual exemptions; (c) 4 months for abuses of dominance, and (d) 3 months for the assessment of concentrations. 6 KV Decision No. 01-05-26-028-48-II/09 dated 14.06.2010. 7 B&H Competition Act, Article 11(2).
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES The objectives of competition law and the effective conduct of the infringement… 243 shall issue a no-infringement decision, confirming the fact that since the infringement decision was not issued within the prescribed time limits, ‘that concluded agreement or the practice of the economic entity is not abuse a dominant position’8. Upon a request of BH Telecom, the competition authority confirmed in an administrative decision that in the absence of a decision on the merits, it should be concluded that BH Telecom has not abused its dominant position9. On 12 October 2011 the KV closed similar investigation into the alleged abuse of dominant position on the part of another incumbent telecom operator Telekomunikacije RS10. The KV‘s investigation was prompted by a complaint lodged by an independent telecom operator Crumb group who claimed that Telekomunikacije RS abused its dominant position by obstructing access to its landline network and applying discriminatory access policy towards independent providers. Crumb group was an independent telecom operator, which has been licensed by the RAK to provide fixed telephony services. Crumb group has approached Telekomunkacije RS with the request to conclude an interconnection agreement. At the first meeting with the incumbent Crumb group was informed that the standard form of the agreement as well as the interconnection charges have not yet been developed by the incumbent. At the same time, as Crumb group has subsequently learned, Telekomunikacije RS has already concluded the interconnection agreement with another independent provider. This fact prompted Crumb group to claim that Telekomunikacije RS has abused its dominant position by favoring Crumb group’s rivals and placing the latter at a competitive disadvantage. After the long process of negotiations with Telekomunikacije RS, which involved the intervention of the sector regulator, Crumb group finally managed to conclude an interconnection agreement with Telekomunikacije RS. At the same time, as claimed by Crumb group, the independent provider could not maintain its traffic due to the limited technical capacity provided by the incumbent. Crumb group argued that Telekomunikacije RS has abused its dominant position and prevented the liberalization of telecommunications market thus preserving its uncontested dominance. The applicant argued that following the EU practice in this field call termination charges for international calls should be equal to those imposed on local calls due to the absence of any cost difference for the network owners. At the same time, there was a minimal difference in price between the call termination fees on the wholesale and retail levels. Apart from the alleged anti-competitive margin squeeze practices, Crumb group argued that Telekomunikacije RS was also applying discriminatory conditions to the domestic service providers by offering better terms
8 B&H Competition Act, Article 11(3). 9 KV Decision No. 01-05-26-028-63-II/2009 dated 04.11.2010. See A. Svetlicinii, ‘The Bosnian & Herzegovinan Competition Authority closes the investigation into the alleged margin squeeze practices of the incumbent telecom operator (BH Telecom)’ 4 November 2010, e-Competitions Bulletin November 2010, Art. N° 33572. 10 KV Decision No. 05-26-2-028-76-II/10 dated 12.10.2011. See A. Svetlicinii, ‘The Competition Authority of Bosnia & Herzegovina closes the investigation into the alleged abusive practices of the incumbent telecom operator without reaching a decision on the merits (Telekom RS/Crumb group)’ (2011) N° 40544 e-Competitions Bulletin.
VOL. 2015, 8(11) 244 CASE COMMENTS to the foreign telecom operators that concluded their interconnection agreements directly with the incumbent. On the basis of the available evidence on 2 March 2011 the KV opened an investigation and following the analysis of the information supplied by the applicant it was expected to issue a decision on the merits. On 8 June 2011 the KV ordered the extension of the investigation in relation to Telekomunikacije RS11. Upon the expiration of the additional three month period the KV has not issued the decision on the merits and upon request of the parties the competition authority confirmed that in the absence of the decision on the merits, which had to be adopted within the prescribed time limits, it should be concluded that Telekomunikacije RS has not abused its dominant position. Unlike the KV’s decision concerning the alleged abuse of dominance in Telekomunikacije RS case, the Crumb group’s claim concerning the existence of an anti-competitive agreement between Telekomunikacije RS and another independent provider – Aneks – has been dismissed by the KV in its decision on the merits12. The KV defined the relevant market as the market for interconnection services on the territory of the Republic of Srpska where the Telekomunikacije RS’s infrastructure was located. The applicant has essentially alleged that the interconnection agreement with Aneks was the result of the Telekomunikacije RS’s abuse of its dominant position by favoring certain independent telecom providers (such as Aneks) while placing the others (such as Crumb group) at a competitive disadvantage. Unlike Article 101 TFEU, which prohibits anticompetitive agreements by ‘object or effect’, the B&H Competition Act for the existence of an anti-competitive agreement requires both: ‘object and effect’13. The KV held that such agreements would normally involve the coordination of the competitors’ conduct, leading to the exclusion of other competitors from the relevant market. As a result, the KV concluded that the applicant has failed to present the evidence that the interconnection agreement between Telekomunikacije RS and Aneks involved the requisite anticompetitive ‘object and effect’.
II. Proceedings before the Court of Bosnia and Herzegovina
Akt.online challenged the decision of the KV in BH Telecom case before the Court of Bosnia and Herzegovina14 The applicant noted that pursuant to the
11 KV Decision No. 05-26-2-028-40-II/10 dated 08.06.2011. 12 KV Decision No. 05-26-2-028-92-II/10 dated 17.11.2011. See A. Svetlicinii, ‘The Competition Authority of Bosnia & Herzegovina finds no anticompetitive practices on the market for telecom interconnection services in the absence of the requisite anticompetitive object and effect (Crumb/Telekomunikacije Republike Srpske, Aneks)’ (2011) N° 40995 e-Competitions Bulletin. 13 B&H Competition Act, Article 4(1). 14 Sud Bosne i Hercegovine, http://www.sudbih.gov.ba/.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES The objectives of competition law and the effective conduct of the infringement… 245 provisions of the B&H Competition Act15, the KV should conduct its proceedings in conformity with the Administrative Procedure Act (ZUP)16. The ZUP17 mandates the administrative agency to respect rights and freedoms of the citizens in line with the B&H Constitution18 and the European Convention on Human Rights19. The ZUP also requires the administrative authorities to establish all facts relevant to the case under consideration20. According to the applicant, by failing to adopt decision on the merits the KV has infringed the applicant’s right to a fair trial (within reasonable time) and right to property guaranteed by the B&H Constitution21. It was also submitted that the provision of the B&H Competition Act22, providing for the default conclusion that failure to reach a decision on the merits amounts to the absence of an infringement, is unconstitutional. Similar challenge was launched by Crumb group against the KV’s decision in Telekomunikacije RS case. The applicant in that case argued that by failing to investigate the factual situation of the case the competition authority has infringed its own procedural rules and the general provisions of the ZUP. In the BH Telecom case the Court found that the infringement proceedings conducted by the KV lasted unreasonably long taking into account the nature of the allegations advanced by the complainant. The Court noted that the complaint was primarily based on the allegation that BH Telecom discriminated domestic providers by offering to the foreign telecoms lower prices for call termination in own network. Therefore, by requesting BH Telecom to provide the texts of the interconnection agreements with domestic and foreign operators the KV could conduct the comparison of the prices and determine the existence of discrimination or the absence thereof. The Court noted that the KV has spent eight months from the start of the investigation until the closing of the case without carrying out substantial investigative activities. This fact was evident from the many delays in hearings; these were caused by the attempts of the parties to find a mutually acceptable solution, and the election of new members of the competition authority. The Court concluded that this inefficient conduct of the investigation was not objectively justified and was contrary to the objective of the B&H Competition Act: the protection and promotion of market competition in Bosnia and Herzegovina23. As a result, the Court has annulled the KV’s no-infringement decision in BH Telecom case.
15 B&H Competition Act, Article 26. 16 Zakon o upravnom postupku, Official Gazette B&H, No. 29/02. 17 B&H Administrative Procedure Act, Article 5. 18 Constitution of Bosnia and Herzegovina, adopted on 21.11.1995, entry into force 14.12.1995. It is Annex IV of the Dayton Peace Agreement reached in Dayton, OH, USA on 21.11.1995 and formally signed in Paris on 14.12.1995. 19 Convention for the Protection of Human Rights and Fundamental Freedoms, Nov. 4, 1950, Europ.T.S. No. 5; 213 U.N.T.S. 221. 20 B&H Administrative Procedure Act, Article 5. 21 Constitution of Bosnia and Herzegovina, Article II(3). 22 B&H Competition Act, Article 11(2). 23 B&H Competition Act, Article 1.
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The Court has also addressed the length of the KV’s investigation in the Telekomunikacije RS case. In that case the competition authority has conducted the proceedings for the initial four months with an additional three month extension. The Court noted that the major argument of the complainant concerned the existence of the interconnection agreement that Telekomunikacije RS has already concluded with some independent providers; the same was refused to Crumb group. In order to verify the allegations of the complainant the KV had to establish the existence of the interconnection agreements with other operators or their absence. The Court concluded that the length of the investigation in the light of the actual investigatory activities carried out by the KV was unjustified and contrary to the objective of the B&H Competition Act. As a result, the Court has annulled the KV’s no-infringement decision in Telekomunikacije RS case.
III. Repeated infringement proceedings of the competition authority
Following the annulment of its no-infringement decision in BH Telecom case the KV has repeated its infringement proceedings against the incumbent telecom operator and on 6 February 2014 issued an infringement decision24 establishing abuse of dominant position in the form of ‘making the conclusion of contract subject to acceptance by the other party of additional obligations which, by their nature or according to commercial usage, have no connection with the subject of such contract’25. The sanction imposed on BH Telecom for the specified infringement amounted to BAM 150.000 (approx. EUR 76.700). In its repeated investigation the KV determined two relevant product markets: interconnection services to BH Telecom fixed landline network and international call termination in BH Telecom fixed and mobile networks. The competition authority established that the delay in execution and BH implementation of the interconnection agreement between Akt.online and Telecom was caused by the refusal of the latter. BH Telecom was insisting that Akt.online should terminate its agreement with another operator concerning international call services that Akt.online was providing in violation of the sector legislation and without appropriate license from RAK. The KV took into account the fact that sector regulator has established the infringement of sector regulations by Akt.online and ordered the latter to terminate the specified agreement. Nevertheless, the competition authority concluded that delay in execution of interconnection agreement by BH Telecom could not be excused by the fact that Akt.online was acting in violation of sector regulations. According to the KV, said conduct by BH Telecom amounted to abuse of dominant position and insisting on termination of the agreement with other operator was not related to the subject of the interconnection agreement.
24 KV Decision No. 05-26-3-01-70-II/11 dated 06.02.2014. 25 B&H Competition Act, Article 10(2).
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES The objectives of competition law and the effective conduct of the infringement… 247
In relation to the alleged margin squeeze and price discrimination the KV established the following facts. The prices for international call termination services in own network were not regulated by the RAK and telecom operators were free to establish the prices in direct negotiations with foreign and domestic operators. Following the comparison of the prices charged by BH Telecom for call termination services provided to foreign operators the KV concluded that no discrimination in favour of foreign telecom providers can be established. As a result, the KV has dismissed the abuse of dominance claim on that account. When determining the amount of fine to be imposed on BH Telecom the KV has considered short duration of the infringement (six months) and the fact that RAK has confirmed the violation of sector regulations by Akt.online, the fact has been used by BH Telecom in order to condition the conclusion of the interconnection agreement with Akt.online.
IV. Comment
The significance of the Court’s judgments in BH Telecom and Telekomunikacije RS cases has multiple dimensions. One of them can be seen in the effectiveness of the judicial review of the KV’s decisions. Generally, there have been only few KV’s decisions that have been quashed by the Court. The judicial statistics demonstrates strong record of the KV defending its decisions before the Court: there were no succesful appeals in 201226 and 201027; and only one succesful appeal in 200928. The national judiciary has agreed with the competition authority in multiple cases, related to the interpretation of substantive and procedural provisions of the B&H Competition Act. For example, the B&H Competition Act instructs the KV to consider EU competition law and jurisprudence in domestic cases29. The KV has followed this guidance and on several occasions referred to the EU competition rules and standards in its infringement decisions30. This practice has been accepted by the Court, which has upheld the abuse of dominance decisions where KV has made references to the EU case law31.
26 See KV 2012 Annual Report, available at http://bihkonk.gov.ba/datoteka/IZVJESTAJ- ZA-2012-GODINU.pdf. 27 See KV 2010 Annual Report, available at http://bihkonk.gov.ba/datoteka/IZVJEsTAJ- o-radu-2011bos.pdf. 28 See KV 2009 Annual Report, available at http://bihkonk.gov.ba/datoteka/izvjestaj_2009.pdf. 29 B&H Competition Act, Article 43(7): ‘Council of Competition, for the purpose of assessment of a given case, can use the case law of the European Court of Justice and the decisions of the European Commission’. 30 See A. Svetlicinii, ‘The Competition Authority of Bosnia & Herzegovina applies EC competition law standards prosecuting exclusive importer of automobiles for abuse of dominant position (ASA Auto / MRM export-import, “Volkswagen” case)’ (2009) N° 26443 e-Competitions Bulletin. 31 See Z. Mekšić, ‘Jurisdikcija Suda EU u praksi Suda BiH’ [‘Jurisprudence of the CJEU in the practice of the Court of B&H’] (2012) 8 Sveske za javno pravo 70-76. The author comments the Judgment of the Court of B&H No. S1 3 U 005412 10 Uvl dated 15.03.2012 where the
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In the present cases the Court has demonstrated its willingness to review the KV’s application of the most strait-forward procedural rules contained in the B&H Competition Act. In light of the initially defunct investigations carried out by the KV in the BH Telecom and Telekomunikacije RS cases, the Court quashed the competition authority’s no-infringement decisions as it was established that the KV was not following the objectives of competition law, that is, to take measures for the protection and promotion of competition. In this sense the cases set the precedent that the KV will be unable to use the respective default provisions of the B&H Competition Act in cases where it is unwilling to issue a decision on the merits. This interpretation of the respective provisions of the B&H Competition Act could become a strong tool for the parties challenging the effectiveness of the KV’s investigations and failures to act. At the same time, it should be stressed that the Court did not follow the arguments advanced by the applicants concerning the unconstitutionality of the respective provisions and their contradiction with the right to fair trial. Procedural considerations aside, it could be suggested that the Court has not denied the right to fair trial and legal certainty guaranteed to the undertakings under investigation by the KV. The approach taken by the Court demonstrates that the responsibility for the effective conduct of the infringement proceedings lies with the competition authority and every time when the default provisions are applied by the KV the latter will have to prove that it has acted efficiently in collecting and analyzing the available evidence in order to reach the decision on the merits. It should be also noted that the KV has not opposed this approach of the Court impliedly sharing the Court’s position. Even though in the course of the repeated investigation BH Telecom argued before the KV that the competition authority can adopt the identical decision even after the judicial annullment, the KV has proceeded differently. Without disputing the Court’s assessment of its actions, the KV has analyzed the avaliable evidence and completed the case with the decision on the merits. It is expected that the repeated investigation in Telekomunikacije RS case should be completed in a similar manner. Taking into account that the B&H Competition Act mandated the KV to initiate the infringement proceedings upon the receipt of a complaint from an interested party32, the precedent established by the Court should contribute to the efficiency of the KV’s investigations. As a result, both the complainants and the undertakings under investigation would enjoy an increased legal certainty that the KV will complete the investigation within the mandatory time limits as prescribed by the law.
B&H court refers to the jurisprudence of the CJEU when reviewing an infringement decision of the B&H competition authority in an abuse of dominance case concerning the refusal to deal in the automobile market. 32 B&H Competition Act, Article 32(2): “Council of Competition is obliged to adopt a conclusion of initiation of proceedings within 30 days of receipt of complete and adequate request.“
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES The First Bid Rigging Case in Slovakia After Years of Judicial Disputes
by
Silvia Sramelova*, Ondrej Blazo**
CONTENTS
I. Introduction II. On the application of criminal law standards to administrative proceedings III. Content of the operative part of cartel decisions IV. Imposing sanctions in case of infringements of both the TFEU and the Slovak Act on the Protection of Competition V. Proving a collusion on the basis of circumstantial evidence VI. (Non-)disqualification from public procurement VII. Conclusion
I. Introduction
In 2006, the Antimonopoly Office of the Slovak Republic (hereafter, AMO) decided its first bid-rigging case concerning a cartel between six construction companies1. According to the cartel decision2, the six construction companies infringed the Act on the Protection of Competition3 as well as Article 101 TFEU.
* Silvia Sramelova, lawyer, the Antimonopoly Office of the Slovak Republic, Legal and International Relations Division; postgraduate student, Pan-European University, Faculty of Law; [email protected]. ** Ondrej Blazo, Comenius University in Bratislava, Faculty of Law; [email protected]. Co-author prepared this commentary within the project: APVV-0158-12 ‘Efektívnosť právnej úpravy ochrany hospodárskej súťaže v kontexte jej aplikácie a praxi’. 1 Decision no. 2006/KH/R/2/116 and decision no. 2005/KH/1/137. 2 The AMO decides on cases on the basis of a 2-instance system. The executive department of the AMO decides on the case in the 1st instance. This decision may then be reviewed by the Council of the AMO. After the 2nd instance decision is taken, the case may be brought before the court. The text below uses a term ‘decision’ in this context. 3 Act no. 136/2001 Coll on Protection of Competition and on Amendments and Supplements to Act of the Slovak National Council No. 347/1990 Coll. on Organisation of Ministries and
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The illegal conduct at hand related to the tender procedure for construction works on the D1 highway Mengusovce – Jánovce (stretch from 0.00 to 8.00 km). Six construction companies (two Czech, one Portuguese and three Slovak) participated in the tender – five of them participated in the tender in the form of two associations, the sixth of the construction companies participated in the tender on its own. Three bids were thus submitted. The high prices proposed by the bidders raised suspicion of the public procurer – the National Highway Company. Based on the complaint of the latter, the AMO commenced an investigation. Bids submitted to the tender covered complex construction works with nearly 900 individual price units. The AMO discovered that the ratio of unit prices submitted to the tender showed extremely constant figures. According to the authority, such figures could not be explained otherwise than by collusion of the participating companies. The fine imposed by the AMO amounted to nearly 45 million EURO. The companies brought the case before the Regional Court in Bratislava. In 2008, the Regional Court in Bratislava4 annulled the decision of the AMO. The AMO subsequently appealed against the judgement. The Supreme Court of the Slovak Republic5 changed the decision of the Regional Court in Bratislava and ultimately dismissed the actions of the claimants. The courts dealt with three key issues in their judgements: Content of the operative part of decisions in cartel cases; 1) Imposition of sanctions in case of infringements of both the TFEU and the Slovak Act on the Protection of Competition; and 2) Proving the collusion on the basis of circumstantial evidence.
II. On the application of criminal law standards to administrative proceedings
The discussion on the abovementioned issues inevitably leads to another and rather complex difficulty, namely the application of criminal law principles to administrative proceedings. The problem has two aspects. The first concerns the use of analogy in administrative law. The second relates to the application of the Convention for the Protection of Human Rights and Fundamental Freedoms (hereafter, Convention). Competition law infringements belong to the group of the so called ‘other administrative offences’. These include offences committed by natural and legal persons in various branches of the law such as: offences in the area of environmental law, offences in construction law, etc.
Other Central Bodies of State Administration of the Slovak Republic as amended as amended (hereafter, Act on the Protection of Competition). 4 Judgement of the Regional Court in Bratislava no. 2S/430/06-393 of 10.12.2008. 5 Judgement of the Supreme Court of the Slovak Republic no. 1Sžhpu/1/2009 of 30.12.2013.
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Unlike minor offences, ‘other administrative offences’ are regulated by a number of different laws. When it comes to substantive legal regulation, they lack lex generalis. Both the substantive aspects of ‘other administrative offences’ and their procedural particularities are regulated by lex specialis. As regards procedural issues, the function of lex generalis is fulfilled by the Administrative Procedural Code6. Albeit the Administrative Procedural Code regulates the procedural aspect of the assessment of ‘other administrative offences’, the Code does not cover general questions such as: the basic principles for the imposition of fines, the application of exculpatory circumstances, etc. This altum silentium may be replaced by the application of analogy with a branch of law that possess the relevant legal regulation, for example, by the application of criminal law principles. Analogy with criminal law is however quite disputable. Nevertheless, the use of analogy seems to be natural when it comes to the application of principles such as ne bis in idem, nullum crimen sine lege, and others norms that are generally considered to be criminal law principles. By contrast, the application of other principles, such as reformatio in peius, is not that clear7. Courts often refer to the Council of Europe’s Recommendation no. (91) 1 of the Committee of Ministers to Member States on Administrative sanctions8 in their case law. The Recommendation lays down the basic principles which should be followed in administrative procedures – most of these derive from criminal proceedings. They include: the nullum crimen sine lege principle, the burden of proof, ne bis in idem, etc. The other aspect of the application of criminal law principles to administrative proceedings lies in that the Slovak Republic is a contracting party of the Convention. Slovak courts, as well as the AMO, generally accept that the principles enshrined by the Convention also apply to administrative proceedings. The application of Article 6 of the Convention, or at least of some of its aspects (such as the right to a fair trial), to administrative proceedings has always been controversial. This derives from the European Commission’s and the CJEU’s hesitant position towards its application. Though the AMO does not refer directly to the application of Article 6 in its decision, and it has never stated that infringements of competition rules have a criminal nature, it seems that the Slovak competition authority at least tries to avoid direct conflict with the Convention. This can be seen, for example, in the legal provisions of the Act on the Protection of Competition. A new amendment9 that entered into force in July 2014 sets out, for instance, rules as regards access to the file by a procedural party in case of conflicts between the
6 The act no. 71/1967 Coll. On Administrative Proceedings (the Administrative Procedural Code) as amended (hereafter, the Administrative Procedural Code). 7 E.g. the decision of the Constitutional Court of the Czech Republic no. III. ÚS 880/08. The Court came to conclusion, that reformatio in peius does not apply to the administrative proceedings. 8 Available at: http://www.dhv-speyer.de/stelkens/Materialien/Recommendation_No_R%2891 %291.pdf Adopted by the Committee of Ministers to Member states on administrative sanctions on 13 February 1991. 9 Act no. 151/2014 Coll. on the amendment of the Act on Protection of Competition.
VOL. 2015, 8(11) 252 CASE COMMENTS protection of business secrets (confidentiality) and the right to defence. According to the new rules, priority is given to the right to defence.
III. Content of the operative part of cartel decisions
The Regional Court in Bratislava questioned the formulation of the operative parts of AMO decisions. The Court found that administrative bodies decided on liability for administrative offences, the character of which is similar to that of minor offences. Furthermore, the Court compared administrative offences and minor offences with crimes and stressed that the differences between them, in the sphere of the subject- matter of the regulation and procedural rules, should not be overestimated. Thus on the basis of the comparison of different types of ‘criminal offences’, the Court analysed requirements laid on certainty of the operative part of decision of administrative bodies and the specification of the act constituting the offence in question. Under § 163(3) of the Code of Criminal Procedure, the operative part of judgments on criminal cases shall contain an exact description of the crime at stake not only by its legal title and legal qualification, but also by the place, time and means of committing that crime, if relevant, as well as other circumstances in order to describe the crime in a manner that avoids interchangeability. Similarly, under § 77 of the Act on Minor Offences, the operative part of the decision on a minor offence shall also contain a description of the given offence by the identification of the place and time of committing that offence, declaration of guilt and type and amount of sanction. The Court found no legal reason for deviating from these requirements with respect to the content of the operative part of decisions on administrative offences in competition matters. It also held that it is not enough to give such a description of the infringement in the part of the decision that contains its justification – it is, in fact, necessary to provide it in the operative part of the decision. As a result, the court denied the legality of the decision of the competition authority which described the infringement in its operative part merely as: ‘Behaviour of [names of companies] consisting of collusive behaviour due to which the aforementioned undertakings coordinated their activities in the public procurement procedure opened by Slovenská správa ciest for construction works for the realisation of the construction of ‘Highway D1 Mengusovce – Janovce, part 0,00–8,00 km’ published in the Journal of Public Procurement on 11.05.2004’. The Court found that this description of the illegal behaviour is lacking the annotation of place, time and means of committing the offence, which would avoid interchanging this behaviour with another. Due to this failure, the Regional Court of Bratislava found the decision of the AMO to be non-reviewable It must be noted that within its reasoning the Regional Court of Bratislava referred also to Czech jurisprudence, particularly the judgment of the Supreme Administrative Court of the Czech Republic No 2 As 34/2006-73 of 15.01.2008. The latter also stressed the necessity to describe the behaviour of the offender by the designation of the place, time and means as well as other circumstances that are necessary to avoid mistaking the practice at hand with the behaviour with others. Since administrative procedure
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES The First Bid Rigging Case in Slovakia After Years of Judicial Disputes 253 law of Slovakia and the Czech Republic derive from a common legal history, and many of their rules are still similar, Czech jurisprudence may be applicable in cases heard by Slovak courts. However, this general opinion of the Czech Supreme Administrative Court was since then modified with respect to the special conditions of competition law application (e.g. judgment No. 1 Afs 58/2009 of 31.03.2009). The Czech Supreme Administrative Court understood that in cartel cases it is not absolutely necessary to describe a cartel by the place where it occurred, because a cartel can be made up of several acts that can occur in different places. Hence, it is enough to describe a cartel e.g. by defining its customers, describing the time framework of the acts and effect of a cartel. The requirement to describe the place of the offence in cartel cases must thus be understood as a description of the relevant market. The Supreme Court of the Slovak Republic did not uphold the above arguments of the Regional Court in Bratislava. First of all, the Supreme Court found that the Regional Court erred in declaring that the decision of the AMO was non-reviewable. Still, these quite elaborate thoughts regarding the application of procedural rules of judicial review are not interesting from the competition law point of view. In its reasoning, the Supreme Court focused mainly on the application of criminal law principles when sanctioning administrative offences and the similarity of competition offences with minor offences. The Supreme Court stressed that courts cannot be misled by this similarity and the analogy cannot by applied automatically. Comparing to other parts and issues mentioned in the judgment, the Supreme Court confirmed the position of the AMO which stated that in cases of concerted practices it is often impossible to specify the place, time and means of committing such behaviour, as it was theoretically required by the Regional Court. Quite surprising was the argument of the Supreme Court that in competition cases it is not necessary do describe the behaviour at stake in great details since comparing to the frequency of minor offences, there are very few cartel cases and there is no danger of mistaken identity (of the illegal practice) and the violation of principles of res judicata and lis pendens. Hence, in this particular case, although the Supreme Court admitted that the operative part of the AMO decision lacks a perfect description of the time of the offence, yet the behaviour of the undertakings was described in an unmistakable manner. It seems therefore that the Supreme Court finally accepted the exceptional character of competition law and its enforcement clarifying that it is not necessary in cartel cases to identify the exact place, time and means of concluding the illicit agreement, which are, indeed, irrelevant for the assessment of the anticompetitive behaviour. This procedural approach is definitely coherent with material competition rules and it is necessary to describe the illegal agreement on a relevant market, its time span and means, as well as how competition was distorted or was planned to be distorted.
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IV. Imposing sanctions in case of infringements of both the TFEU and the Act on the Protection of Competition
In the case at hand, the AMO decided on the infringement of both the Act on the Protection of Competition and the TFEU. The parallel application of the Act on Protection of Competition and the TFEU is not excluded; similarly, the Regulation 1/200310 foresees such practice. The Regional Court in Bratislava came to the conclusion that the AMO was obliged to apply criminal law principles to its proceedings. According to the Court, the AMO had to take into consideration this fact in the process of calculating the fines and to apply thereto similar rules as according to the Criminal Code. For an explanation, the Criminal Code11 divides criminal acts into criminal offences (less serious) and crimes (more serious). According to the Criminal Code, in case when the offender commits two or more criminal offences, the court will at first determine, which of them is more serious and for which the higher punishment may be imposed. Second, the court will impose only one punishment for the most serious infringement. The law does not allow the accumulating of punishments. This is the so called ‘absorption of punishment’. In a case where at least one of the criminal acts is a crime, the Court will determine the most serious infringement and then increase the maximum sentence permitted by the law by one third and impose a punishment within this range. This procedure is called the ‘aspiration of punishment’. The Criminal Code also sets specific procedures in cases when the offender is sentenced by a court and later found guilty for another criminal act that was committed before the first judgement is publically proclaimed. In this case, the court that decided on the ‘second criminal act’ annuls the first judgement and applies the rules mentioned above. Neither the Administrative Procedural Code nor the Act on the Protection of Competition foresees any special procedure for such cases. Nevertheless, according to the Regional Court in Bratislava, the AMO is obliged to apply the abovementioned criminal law principles when calculating the fine. The Court held here that the accumulation of fines cannot be applied, inasmuch as such accumulation is not familiar to the Slovak legal order. According to the Court, the decision of the AMO does not sufficiently specify which principles were used in the process of the calculation of fines. Thus, in the Court’s opinion, the AMO’s decision is not sufficiently reasoned as regards fines. The truth is that a similar attitude towards the calculation of fines was expressed by the Slovak judiciary also in other cases. E. Babiakova, judge of the Supreme Court of the Slovak Republic, draws attention to the criminal nature of administrative
10 Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ [2003] L 1/1. 11 Act no. 300/2005 Coll. as amended.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES The First Bid Rigging Case in Slovakia After Years of Judicial Disputes 255 offences.12 In her opinion, the application of analogy in administrative law is generally accepted by the courts of the Slovak Republic as well as by the courts of the Czech Republic. For instance, the Supreme Court of the Slovak Republic dealt with a case where the Council for Broadcasting and Retransmission imposed 24 fines on a national private TV operator for 24 infringements in 24 separate administrative proceedings. The Supreme Court annulled the decisions of the Council and held that the Council for Broadcasting and Retransmission should have dealt with the infringements in a joint proceeding according to criminal law principles. According to the court, in such cases, administrative bodies should impose a single fine, calculated in compliance with criminal law principles. The Supreme Administrative Court of the Czech Republic13 dealt with a similar case when an administrative body fined a natural person for several traffic offences in several separate proceedings. The Supreme Administrative Court pointed to the necessity to apply criminal law principles in this case. It drew the conclusion that an administrative body has to decide on a fine with respect to previous fines imposed, for as much as the previous infringement had been committed before rendering the decision on the first infringement. According to the Supreme Administrative Court, the fact that an administrative body did not conduct joint administrative proceedings in the case of both offences does not necessarily mean that it acted contra legem. Though the court appreciated the absence of specific procedural rules concerning the imposition of fines (in contrast to criminal law), it concluded that it there are no obstacles constraining the administrative body from deciding on the amount of the fine with respect to the fine already imposed. The attitude of the AMO concerning the application of criminal law principles in its case law as regards the calculation of fines is not particularly clear. In the reviewed decision on the Highway cartel, the AMO decision explains that the authority imposed a fine for the infringement of both national and EU law, which means that the infringement had wider effects than the violation of purely national provisions. According to the AMO, this must be reflected in the amount of the fine imposed. It is not to be considered as an aggravating circumstance, but the circumstance that by itself affects the basic amount of the fine. On the other hand, the AMO stated in another decision14 that it imposes a single fine for both infringements of national and EU law. Contrary to the previous decision, it pointed out that both the national and EU infringement are of equally severity and so the fact that two provision were breached does not affect the amount of the fine imposed.
12 E. Babiaková, ‘Analógia v oblasti správneho trestania’ [‘Analogy in the domain of administrative punishment’] (2012) 64(3) Justičná revue 343–348. 13 Judgement of the Supreme Administrative Court of the Czech Republic no. 1 As 28/2009-68. 14 The decision no. 2011/KH/1/1/055.
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In the case of the Highway cartel, the Supreme Court did not provide a clear explanation with regard to the necessity to apply criminal principles to administrative proceedings. It seems that the Supreme Court is quite reserved when it comes to the implementation of criminal law principles to administrative proceedings. It stressed that the AMO sufficiently explained in its decision that it imposed a single fine on both infringements. It is interesting that the Supreme Court also remarked that the European Commission did not impugn the process of the calculation of fines used by the AMO, even though the imposition of fines is a matter of national law. Despite the ruling of the Supreme Court, Slovak rules concerning the calculation of fines in case of two or more infringements remain unclear.
V. Proving a collusion on the basis of circumstantial evidence
As mentioned above, the Highway cartel was the first case were the AMO decided on an infringement even though it did not possess any direct evidence to substantiate it. Clearly, the ideal situation occurs when the competition authority possesses evidence such as e-mails or other direct proof of contacts between cartel members. However, given the endeavour of cartel members to conceal their illegal conduct, it may sometimes be impossible to obtain such evidence. Therefore, it is not impossible that the case will be decided on the basis of circumstantial evidence only – either on the basis of proofs of communication between the cartel members (without knowing the content of such communication) or on the basis of economic evidence. The AMO based its decision on the analysis of the price units submitted by the tender participants and on the results of this analysis which proved they high conformity of these prices The AMO referred to the judgment of the Court of Justice of the European Union in the case Woodpulp15 whereby parallel conduct cannot be regarded as furnishing proof of concertation unless concertation constitutes the only plausible explanation for such conduct. With respect to this judgement, the AMO sought the plausible explanation for this conformity and came to the conclusion that it is not possible for such conformity to be achieved otherwise than via an agreement of the undertakings concerned. The undertakings explained the conformity by the use of the same software in the process of creating bids, the use of the same suppliers, the use of the standardized price lists, etc. However, after the AMO analysed other tenders in the construction industry (and prices submitted to these tenders), it found that such price conformity had never occurred in the past. The comparison of prices in other tenders showed different indexes.
15 Joined cases C-89/85, C-104/85, C-114/85, C-116/85, C-117/85 oraz C-125/85 do C-129/85 Ahlström Osakeyhtiö and others v. Commission, ECR [1993] I-01307.
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The National Highway Company confirmed that such conformity is highly improbable and cannot be accidental. The Regional Court in Bratislava admitted that the analysis of the unit prices submitted to the tender proved unusual conformity. On the other hand however, the Court came to the conclusion that the AMO did not sufficiently prove the illegal conduct of the undertakings. According to the Court, the authority failed to clarify both the background of the anticompetitive agreement and its content. According to the Supreme Court, the result of the comparison of unit prices is not direct evidence of the infringement. However, in accordance with the abovementioned jurisprudence of the Court of Justice of the European Union, it was up to the undertakings to explain this conformity. Moreover, the Supreme Court drew attention to the fact that this indirect evidence was supported by other indirect evidence that indicated the infringement such as: the official position of the public procurer, the comparison with other tenders in the same sector, the existence of communication platform among the bidders. According to the Supreme Court, the AMO rebutted the objections of the undertakings in detail. It is natural that the use of circumstantial evidence carries with it the risk that the reviewing judiciary might view cases built on such evidence with scepticism. Circumstantial evidence should thus be used cautiously, and should persuasively point to the infringement. It is almost inevitable for the competition authority to support this type of evidence with other indirect proofs, or other indications of the infringement. It is also necessary to carefully assess all the objections submitted by the undertakings concerned and to answer these objections in detail in the decision.
IV. (Non-)Disqualification from public procurement
Slovak public procurement rules automatically disqualify participants of bid- rigging from public procurement for not fulfilling the personal status necessary for the participation in procurement procedures16. These rules were changed in 2008.
16 Act No. 25/2006 Coll. on Public Procurement and on the Amendment of Certain Acts as amended, current wording: § 26(1)(g) ‘Only the one meeting the conditions of participation with regard to personal status may take part in the public award of contracts: he has not been proven any grave professional misconduct over the preceding three years, which contracting authorities and contracting entities are able to prove’. § 26(5): ‘For the purpose of this Act, grave professional misconduct shall mean in particular participation in an agreement restricting competition in public procurement and any other a grave infringement of law or a grave infringement of obligations from contract, which can be proven by a final decision of the competent public authority. The period pursuant to paragraph 1(g) shall begin on the date when the decision has become final’. Act No. 25/2006 Coll. as effective till 30 June 2008: § 26(1)(h): ‘Only a person may take part in the public award of contracts who meets the conditions of participation concerning his
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Until 30 June 2008, the period of disqualification was five year from committing bid- rigging. Since 1 July 2008, the period of disqualification was three years after the final decision on the participation in a bid-rigging cartel offence. Since the effects of the AMO’s decisions were suspended by the judiciary after a complaint was filled, cartel members were not excluded from the participation in procurement procedures even after a final decision of the AMO. All attempts of the Office for Public Procurement (hereafter, OPP) to exclude these companies were overturned by the Regional Court in Bratislava (e.g. cases no. 2S 142/2007, 2S 262/07, 2S/11/2012) and confirmed by the Supreme Court (e.g. cases no. 3Sžf/31/2011, 6Sžf/18/2010). The Regional Court in Bratislava supported its reasoning by an allegedly EU-conform interpretation of § 26 of Act No. 25/2006 Coll. on Public Procurement. According to the judiciary, this provision had been codified into legislation by Act No. 232/2008 Coll. (amendment of act No. 25/2006 Coll. in force from 1 July 2008) and suspends the effects of decisions issued by competition authorities. The courts neglected the fact that the decision of the completion authority established the existence of the cartel and the text of Article 155a(5) of Act No. 25/2006 Coll.. Hence the question of the disqualification of cartel participants was closed until 20 March 2014 when the final judgment (case no. 1 Sžhpu/1/2009) in the Highway Cartel case became effective. Afterwards, discussions on the exclusion of the affected major construction companies reopened. The issue was closed several months later with the publication by the OPP on 27 July 2014 of the Explanatory Position No 4/2014 ‘Participation in cartel as a reason for exclusion from public procurement procedures’. Despite its general title, the explanatory position dealt only with Highway Cartel issues. Regarding the counting of the disqualification period from public procurement in the Highway Cartel case, the OPP found that: 1. due to intertemporal provision Article 155a, the period for exclusion commences when the cartel was committed; 2. the date of the commitment of the cartel was set as 11 May 2004 when the call for the tender was published; 3. the disqualification period was interrupted when the effects of the AMO’s decisions were suspended; 4. hence the exclusion period shall be counted from 11 May 2004 to 7 December 2006 or 15 May 2007 (depending on the date of the suspension of the AMO’s decisions by the Regional Court regarding particular companies); the period shall be counted again from 20 March 2014; 5. due to the fact that the Amendment Act No. 232/2008 Coll. changed the five- year period to a three-year period, and taking into account principles of a just application of legal norms and the constitutional principle of non-discrimination, personal status: over the preceding five years, he has not violated the prohibition of illegal employment pursuant to a special regulation’. Under the intertemporary provision § 155a of Act No 25/2006 Coll. as in force from 1 July 2008 ‘Previous provisions concerning grave professional misconduct shall be used for cases committed by tenderers before 1 July 2008’.
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the OPP decided to apply the three-year period as it is more favourable for the companies at stake. Using the aforementioned rules set by the OPP, the disqualification periods for all of the cartel participants lapsed at different times between 20 March 2014 and the end of August 2014. Hence the Explanatory position of the OPP shrank the five-year (or three-year) disqualification period to several days. From the legal point of view, the OPP made several errors in its Explanatory position. It did not take the more favourable way of applying existing public procurement rules, but took the utterly most favourable approach possible to the participants of the Highway Cartel. The Explanatory position bears the burden of a misapplication and misinterpretation of criminal law principles and human-rights rules applicable in cases of criminal charges. Its initial failure lies in the fixing of the time of the commencement of the disqualification period at the time of the likely beginning of the cartel. It is generally accepted both in criminal as well as administrative law, that an offence that lasts a certain period of time is deemed committed when the offenders end their illegal behaviour or abandon the illegal state. Therefore, the beginning of the disqualification period should have been set to the end of the cartel. However, the OPP’s position contains also a major error in how the authority defined the passing of the disqualification period. The OPP was correct to see disqualification as a type of sanction, and hence that was indeed necessary to compare sanctions applicable at the time of the offence being committed and those applicable at the time of the decision being issued. Nevertheless, the OPP ultimately failed to compare which of these sanctions would be more favourable for the offender. Instead, it constructed a brand new sanction. The approach used by the OPP is not consistent with the way how criminal rules are generally applied. Under this criminal-law principle, the more favourable sanction shall be chosen (including all of its features) but not a most favourable mix of the elements of both sanctions. Thus, the OPP should have to compare the five-year disqualification period counted from the time of the commitment of the cartel offence with a three-year disqualification period counted from the time when the final decision became effective (i.e. from 20 March 2014). Using this approach, the three-year period would have ended in March 2017 and the five-year disqualification period would have ended between March and August 2016, depending on the individual cartel members. Nevertheless, disqualification rules connected with cartel infringements are not very effective since they can easily be circumvented by employing subsidiaries, sister or parent companies that were not named as cartel participants, even if they form a single economic group with the cartel offender. Therefore, the already quite weak disqualification sanction was made by the OPP case totally toothless in the Highway Cartel.
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VII. Conclusion
As seen from above, in the highway construction bid rigging case, Slovak courts clarified certain issues that had been under discussion for a long period of time. For instance, the non-fulfilment of the ‘requirements for the operational part of the decision’ was repeatedly the reason for the annulment of the AMO’s decision. The opinion of the Supreme Court on this issue is thus highly appreciated. The same applies to its opinion on the use of circumstantial evidence. On the other hand, some issues continue to remain unanswered. It would have been advisable for the courts to have provided a clear opinion as regards the conduct of proceedings and the calculation of fines in cases of several competition law infringements by the same offender. Given the lack of relevant legal rules, administrative bodies, as well as procedural parties, are still plagued by legal uncertainty in this context. The judgement of the Supreme Court also opened a very interesting discussion as regards the interpretation of the Act on Public Procurement concerning disqualifications from public procurements. It has to be said that the interpretation applied by the OPP goes beyond legal standards, and ultimately leads to the absolute infectivity of relevant legal provisions. Thus, the companies that participated in this cartel remain practically unpunished as concerns the public procurement process.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Due Process Rights in Polish Antitrust Proceedings. Case comment to the Judgment of the Polish Supreme Court of 3 October 2013 – PKP Cargo S.A. v. President of the Office of Competition and Consumers Protection (Ref. No. III SK 67/12)
by
Dariusz Aziewicz*
I. Introduction
The Polish Supreme Court delivered on 3 October 2013 an important ruling (Ref. No. III SK 67/12) concerning the case of PKP Cargo S.A. (hereafter, PKP Cargo) against the Polish Competition Authority – the President of the Office for Competition and Consumer Protection (hereafter, UOKiK). The reviewed judgment constitutes a crucial precedent with respect to procedural fairness (due process rights) in the enforcement of Polish competition law. It states that when examining appeals from administrative decisions issued by the UOKiK President, civil courts may also rule on violations of procedural provisions (administrative law) committed by the National Competition Authority (hereafter: NCA). Depending on the type and importance of procedural infringements indicated in the appeal, the 1st instance court revising the decisions of the UOKiK President, as well as other relevant courts of higher instances, may rule that an appeal is legitimate and quash the administrative decision of the UOKiK President on procedural grounds only (even without deciding on the infringement of competition law).
II. Judicial review in Polish competition law
Polish rules on the prohibition of agreements restricting competition and on the abuse of a dominant position as well as on pre-emptive control of concentrations are contained in the Act on Competition and Consumers Protection of 16 February 2007
* Dariusz Aziewicz, PhD candidate, Faculty of Management, University of Warsaw; [email protected]
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(hereafter: 2007 Competition Act)1. Article 81(1) of the 2007 Competition Act sets out a unique, so-called hybrid, procedure for competition law proceedings2. In brief, proceedings are divided into two main phases. The administrative proceedings phase comes first and takes place before the NCA – the UOKiK President. It is primarily governed by the provisions of the Administrative Procedure Code3 (hereafter, KPA). The civil proceedings phase (the judicial review phase) comes second. It starts before a court established specifically to rule on appeals from the decisions of the UOKiK President – the Court of Competition and Consumers Protection (hereafter, SOKiK) – and continues in further civil instances. Civil procedure rules stipulated in the Code of Civil Procedure (hereafter, KPC) apply before all of these courts. The UOKiK President is, as a central body of public administration, exclusively entitled to initiate administrative proceedings concerning infringements of competition law (violations of the prohibition of agreements restricting competition and the abuse of dominance)4. Such proceedings end with the issuance of an administrative decision which may, for example, recognize a practice as restricting competition and order the offender to refrain from pursuing it5. The issuance of such decision is the outcome of the so-called ‘antimonopoly proceedings’ conducted on the basis of administrative procedure6 which follows the rules of conduct stipulated in the KPA7. However, these decisions are not final. Article 81 point 1 of the 2007 Competition Act provides a right to appeal such decisions. Despite the fact that the KPA has its own appeal procedure, the 2007 Competition Act excludes the application of general KPA provisions to competition law cases. It stipulates instead that the review of the decisions of the UOKiK President is conducted by civil courts. And so, such decisions can be appealed to a specially crafted competition law court – SOKiK (XVII department
1 The Competition Act covers also practices infringing collective consumer interests in the Article 24 of the Competition Act. 2 R. Janusz, T Skoczny, ‘Postępowanie antymonopolowe jako szczególne postępowanie administracyjne’ [‘Antitrust proceeding as a special administrative proceeding’] [in:] Instytucje współczesnego prawa administracyjnego [Institutions of modern administrative law], Kraków 2001, 261-275; Z Kmieciak, ‘Postępowanie w sprawach konkurencji’ [‘Proceedings in antitrust cases’] (2002) 4 Państwo i Prawo 31-47. 3 Matters not governed by the Competition Act, as regards the proceedings before the UOKiK President, are subject to the provisions of the Act of 14 June 1960 – the Code of Administrative Procedure, except matters concerning evidence (Article 84 of the Competition Act – prescribing civil procedure) and matters related to inspections (Article 105c 4 of the Competition Act – prescribing procedure). 4 Proceedings concerning concentrations are instituted upon a request or on an ex officio basis based upon Article 49 point 2 of the Competition Act. 5 Article 10 of the Competition Act. 6 Article 83 of the Competition Act. 7 However, because of Article 84 of the Competition Act, to matters concerning evidence in proceedings before the UOKiK President, in the scope not regulated in the Competition Act, Articles 227 to 315 of the Act of 17 November 1964 – the Code of Civil Procedure, apply accordingly.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Due Process Rights in Polish Antitrust Proceedings 263 of the Regional Court in Warsaw) – which conducts its proceedings according to the KPC8. The same rules apply before the Court of Appeals (2nd instance court handling appeals against SOKiK judgments) and the Supreme Court (the court of last resort). Given the above, a contradictory litigation starts before the SOKiK where the UOKiK President acts as a party to the proceedings (the defendant). Because of this, the SOKiK is recognized as the court of 1st instance in Poland for competition law cases. The exclusion of administrative procedure rules concerning competition law appeals, and the switch to civil procedure instead, results in the fact that a competition case is resolved by the court on its merits (by contrast, a usual administrative court rules in administrative proceedings only on the legality of an administrative decision). To sum up, the process of antitrust proceedings is entrusted to an administrative body – the UOKiK President – and yet a civil court may rule on the merits during the appeal. It is therefore the completion of administrative proceedings which conditions litigation before civil courts9. Due to the aforementioned relationship between administrative and civil procedures, Polish judicature held for several years now that because of the SOKiK’s 1st instance nature, it was impossible to appeal violations of procedural rules committed during the administrative stage of the proceedings before the NCA. This approach was based mainly on the conclusion that the contradictory process of litigation between the parties (i.e. an undertaking party to the administrative proceedings as the plaintiff and the UOKiK President as the defendant) de facto starts when an appeal is submitted. This approach has now been changed by the reviewed Supreme Court judgment of 3 October 2013.
III. Facts
On 11 August 2006, the UOKiK President initiated explanatory proceedings against PKP Cargo based upon a notification submitted to the NCA by PKP Cargo’s competitor – CTL Logistics. PKP Cargo S.A. is a joint stock company and the national incumbent railway cargo services provider. Its area of activities covers the territory of Poland and Europe. In fact, it is the third biggest provider in Europe, second biggest in the EU and the biggest in Poland. In its notification, CTL Logistics indicated that by the introduction on 1 May 2006 of amendments to PKP Cargo’s ‘Rules of sale of rail cargo transport of PKP Cargo S.A.’, the dominant undertaking abused its position on the market of rail cargo transport in Poland10. The competitor’s main concern was that the aforementioned amendments made it possible for PKP Cargo to refuse, without any objective justification, to deal with undertakings that are its competitors.
8 Article 82 of the Competition Act. 9 Judgment of the Court of Appeals in Warsaw of 8 November 2006, VI ACa 290/06. 10 In particular § 5 points 6–10.
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After the completion of its explanatory proceedings, the UOKiK President initiated full antimonopoly proceedings on 15 December 2006. As a result, the NCA found first of all that PKP Cargo indeed held a dominant position on the market of rail cargo transport in Poland, mainly because of its high market shares (during 2008 it held a 48,48% market share measured by the weight of cargo and 70,52% measured by transport)11. Second, the NCA recognized that PKP Cargo infringed the applicable Competition Act (Article 8(1) and (5) of the Competition Act of 15 December 2000) by abusing its dominant position by way of refusing to perform the service of railway cargo transit of goods to competitors on a specific basis. This behavior counteracted the formation of the conditions necessary for the emergence or development of competition as indicated in the CTL Logistic’s notification. Finally, in decision number DOK – 3/2009 of 7 July 2009, the UOKiK President imposed a penalty on PKP Cargo in the amount of PLN 60,362,071.69 (approx. EUR 14,371,921). PKP Cargo appealed the decision to the SOKiK on procedural grounds which, however, rejected the appeal on 9 May 2011. On 20 of March 2012, the Court of Appeals rejected the subsequent appeal also. Thus, PKP Cargo appealed the case to the Supreme Court which remanded the case for re-examination.
IV. Key findings of the Supreme Court
The case before the Supreme Court focused on two legal aspects. Both of them concerned the grounds of the appeal from the decision in question. These aspects were: (i) the scope of cognition of the appellate courts in appeals against decisions of the UOKiK President due to infringements of provisions of the KPA by NCA, and (ii) rules of conduct during the hearing of evidence in contradictory court proceedings during appeals from the decisions of the UOKiK President. From the time of PKP Cargo’s appeal to the SOKiK, the most important part of PKP Cargo’s (the claimant) arguments concerned the question if the courts, while ruling on appeals from the decisions of the UOKiK President, may verify the correctness of the NCA’s conduct during the administrative stage of the proceedings. This question arose mainly because a civil court evaluates also evidence gathered and findings of correctly conducted antimonopoly proceedings. To reach its conclusion, the Supreme Court confronted two different approaches expressed in earlier jurisprudence covering proceedings based on competition law as well as telecommunications law where a similarly hybrid type of procedure is applied. The first approach discussed by the Supreme Court was originally formulated in its judgment from 19 August 2009 (ref. no. III SK 5/09). The Supreme Court had dismissed there most of the procedural objections raised by the plaintiff and stated that the proceedings before the NCA have a 1st instance character. Thus, the court passing a judgment is entitled to decide the case on its merits but it is not obliged to refer in detail to procedural objections raised in the appeal concerning the incorrectness of
11 Decision of the UOKiK President of 7 of July 2009, No. DOK – 3/2009, 35.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Due Process Rights in Polish Antitrust Proceedings 265 the antimonopoly proceedings. This judgment, being a basis for further civil rulings in competition law cases, was widely criticized by Polish competition law doctrine12. The opposite approach discussed by the Supreme Court in the relieved Judgment traces back mainly to rulings in proceedings before the Polish Telecoms Regulatory Authority. The Supreme Court indicated in its assessment rulings where the SOKiK paid attention to the correctness of the administrative proceedings before the Telecoms Regulator: 1) judgment from 21 September 2010, ref. no. III SK 8/10, 2) judgment from 20 January 2011, ref. no. III SK 20/10, 3) judgment from 2 February 2011, ref. no. 18/10, 4) judgment from 7 June 2011, ref. no. III SK 52/10, 5) judgment from 24 January 2012, III 23/11, and 6) judgment from 12 April 2013, ref. no. III SK 26/12. Among other infringements considered in these judgments, the SOKiK has found that, for example, the decisions of the Telecoms Regulator had been issued due to circumstances resulting in their invalidity under the scope of the KPA, or that the regulatory decisions had not been issued according to relevant procedural standards. Furthermore, the Supreme Court took into consideration a ‘stabile jurisprudence’ of the Court of Appeals in Warsaw which indicates that the Telecoms Regulator’s failure to complete consolidation proceedings or an invalid performance of proceedings which ended with the imposition of a fine, is illegal making the regulatory decision invalid. A similar approach, also mentioned by the Supreme Court, was taken into account by the SOKiK in the judgment of 15 October 2012 (file number XVII AmA 17/11), repealing the decision of the Telecoms Regulator because it failed to indicate the action for which the fine was imposed. Conclusively, the Supreme Court ruled that this jurisprudence should be taken into account while ruling on cases concerning competition law. Such approach is justified especially when the UOKiK President imposes a fine on an undertaking, a fact which should additionally increase the need to adhere to highest procedural standards. Moreover, the Supreme Court indicated that the law itself does not differentiate between material and procedural arguments indicated in appeals from decisions of the UOKiK President. Finally, the Supreme Court stated that the UOKiK President infringed in the assessed case the rules of administrative procedure by amending its resolution on the initiation of antimonopoly proceedings by, in fact, extending the resolution’s initial scope. While commenting on the infringement in question, the Supreme Court stated that explanatory proceedings should be sufficient to gather evidences necessary for the commencement of full antimonopoly proceedings within the relevant scope. In the Supreme Court’s opinion, such violation is not subject to rectification before the court of last resort. Concerning the second aspect indicated above – the hearing of evidence – the Supreme Court indicated that courts must ensure the parties’ right to be heard with regard to any of the gathered evidence. This is even more important in cases concerning the impositions of fines on undertakings. However, in light of its findings
12 See also: M. Bernatt, ‘The control of Polish courts over the infringements of procedural rules by the national competition authority. Case comment to the judgment of the Supreme Court of 19 August 2009 – Marquard Media Polska (Ref. No. III SK 5/09)’ (2010) 3(3) YARS.
VOL. 2015, 8(11) 266 CASE COMMENTS concerning the first aspect, the Supreme Court found that it is too early to rule on these matters.
V. Commentary
First of all, it should be noted that the judicial approach to competition law’s hybrid procedural structure in Poland (expressed in other rulings before the Judgment) stated that the SOKiK’s role is only to decide the case on the merits13 (as a 1st instance court). Thus, for many years, procedural aspects of the administrative proceedings stage before the NCA were not subject to appeals from the decisions of the UOKiK President. According to the Supreme Court’s earlier views, there was no necessity to refer to procedural arguments, in particular when the appellant did not indicate that such infringements influenced the substance of the decision in question. Furthermore, the Constitutional Tribunal indicated also that there is a difference between regulatory proceedings (energy, telecommunication, railway transport) and competition proceedings because of their essence14. To comment on this case, it is necessary to underline the criticism of the aforementioned approach as expressed by Polish competition law doctrine. The main criticism notes that Article 6 of the ECHR imposes a requirement of full judicial review of every decision issued by a non-court body15. This rule applies fully to antitrust proceedings16. Moreover, the jurisprudence of the ECtHR states that decisions issued by administrative authorities, which do not satisfy the requirements of Article 6(1) of the ECHR, have to be subject to control by a ‘judicial body that has full jurisdiction’ over questions of facts and law17. Therefore, the notion of ‘full jurisdiction’, prescribed in Article 6 of the ECHR implies, in fact, that the court has to evaluate the case not
13 Judgment of the Supreme Court of 18 September 2003, I CK 81/02; judgment of the Court of Appeals in Warsaw of 20 December 2006, VI ACa 620/06. 14 M. Bernatt, Sprawiedliwość proceduralna w postępowaniu przed organem ochrony konkurencji [Due process in proceedings before a competition authority], Warszawa 2011, p. 290. 15 Ibidem. 16 M. Bernatt, Sprawiedliwość proceduralna…, p. 274, indicating the judgment of the ECtHR, Menarini Diagnostics S.R.L. v Italy, 59–60. 17 See: Bernatt: ‘The control of Polish courts over the infringements of procedural rules by the national competition authority. Case comment to the judgment of the Supreme Court of 19 August 2009 – Marquard Media Polska (Ref. No. III SK 5/09)’ (2010) 3(3) YARS, indicating: Albert and Le Compte v Belgium of 10 February 1983, no. 7299/75, 7496/76, para. 29; Gautrin and others v France of 20 May 1998, no. 21257/93, para. 57; Frankowicz v Poland of 16 December 2008, no. 53025/99, para. 60, and specifically for judicial control over administrative bodies see judgments: Bendenoun v France of 24 February 2004, no. 12547/86, para. 46; Umlauft v Austria of 23 October 1995, no. 15527/89, para. 37–39; Schmautzer v Austria of 23 October 1995, no. 15523/89, para. 34; Janosevic v Sweden of 21 May 2003, no. 34619/97, para. 81. See also L. Drabek, ‘A Fair Hearing Before EC Institutions’ (2001) 4 European Review of Private Law 561; K. Lenaerts, J. Vanhamme, ‘Procedural Rights of Private Parties in the Community Administrative Process’ (1997) 34 Common Market Law Review 561–562.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Due Process Rights in Polish Antitrust Proceedings 267 only on the merits but also on the correctness of proceedings before a non-court authority – such as the UOKiK President. Doctrine indicated that previous ‘Polish model of judicial control over proceedings before the UOKiK President raises serious doubts from the point of view of the requirements of “full jurisdiction”. In particular, the court specialized in dealing with the appeals from the UOKiK President decisions – the Court of Competition and Consumers Protection, does not exercise control with respect to procedural infringements over the proceedings before and the decisions of the UOKiK President’18. It is crucial to stress that under the hybrid system, the SOKiK generally bases its assessment on the evidence gathered by the UOKiK President during the administrative stage of the proceedings. For example, the SOKiK, and other civil courts, may not inspect the premises of an undertaking or send an information requests to other market participants – these are actions taken exclusively by the NCA. Thus, procedural infringements are impossible to remedy before civil courts if such courts would not be allowed to evaluate and to rule on procedural aspect of administrative proceedings19. As it is also correctly noted ‘the violation of the right to be heard and right to defense during administrative proceedings should be seen as a reason for annulling a decision in its entirety’20. It is also worth mentioning that European courts exercise full control over proceedings conducted before the European Commission21. In conclusion, the commented judgment should be recognized as a positive change in Polish competition law jurisprudence especially since it strengthens due process rights in proceedings concerning antitrust infringements.
18 M. Bernatt ‘The Principal of Procedural Fairness and its Implementation in the Administrative Proceedings – perspective of the country in the democratic transition, 8th World Congress of the International Association of Constitutional Law’ (IACL) Mexico-City, 6-10 December 2010 Constitution and Principles, Paper form workshop on Constitutional principles and democratic transition, 16. 19 See: Bernatt, Sprawiedliwość..., p 294. 20 Ibidem at 17. 21 Judgment of the CFI of 11 March 1999, T-156/94 Siderugica Aristrain Madrid SL v Commission [1999] ECR II-645, para. 115.
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A Departure from a Formalistic Approach in the Assessment of Restrictive Vertical Agreements in Favour of a More Economics- Based Approach? Case Comment to the Supreme Court Judgment of 15 May 2014 (Ref. No. III SK 44/13)
by
Małgorzata Sieradzka*
I. Background information
The discussed judgment of the Supreme Court is in line with its other jurisprudence with respect to the classification of price agreements as practices restricting competition under Article 6(1)(1) of the Competition and Consumer Protection Act1 of 16 February 2007 (hereafter: Competition Act 2007). Despite the firm stance taken on the assessment of price agreements by the UOKiK President, the Supreme Court once again emphasizes the necessity for an economics-based approach2. In the opinion of the Supreme Court, not every vertical price-fixing agreement results in a threat to the public interest. A departure from a rigorous application of the ban on competition restricting practices (Article 6(1)(1) of Competition Act 2007) to all types of vertical agreements has an impact on the application of legal provisions governing the imposition of financial penalties. Considering the optional nature of fines, the question arises about their purpose in cases where the public interest has not been jeopardized.
II. Facts
In the decision of 11 December 2008 (No. RKT-114/2008), the UOKiK President found a vertical agreement concluded by Zakłady Chemiczne Hajduki S.A. and several undertakings operating in the wholesale market of paints, varnishes and auxiliary
* Dr. Małgorzata Sieradzka, advocate, Lazarski University, Warsaw, Poland; malgorzata. [email protected]. 1 Journal of Laws No. 50, item 331 as amended. 2 In a previous judgment of 23 November 2011 in Case Röben, Ref. No. III SK 21/11.
VOL. 2015, 8(11) 270 CASE COMMENTS products, as a competition restricting practice. The agreement consisted of the direct fixing of sales prices of products manufactured by Hajduki and sold by the contractors. By the decision, the UOKiK President imposed a fine on both Hajduki and on the other participants of the agreement. The claimant, V – Sp. z o. o. (one of the undertakings participating in the agreement), contested the decision of the UOKiK President before the Court of Competition and Consumer Protection (in Polish: Sąd Ochrony Konkurencji i Konsumenta; hereafter, SOKiK). The appeal was however dismissed by SOKiK in the judgment of 11 October 2011. The 1st instance judgment was once again challenged by the claimant this time before the Court of Appeals. This appeal was partially accepted in that the Court of Appeals significantly reduced the amount of the original fine. In turn, the UOKiK President filed a last resort appeal (cassation) against the ruling of the Court of Appeals with the Supreme Court. The Supreme Court dismissed the appeal of the UOKiK President in the reviewed judgment of 15 May 2014.
III. The Supreme Court’s ruling
The Supreme Court found no grounds for consideration of the cassation appeal lodged by the UOKiK President. In the judgement discussed, the Supreme Court did not classify the agreements involving minimum or fixed resale prices as agreements restricting competition ‘by object’ in the meaning of Article 6(1) of Competition Act 2007, but instead, referred to its own views expressed on this matter in the Röben judgment of 23 November 2011 (III SK 21/11). The Supreme Court confirmed its earlier findings and upheld the general principle on the classification of agreements setting minimum or fixed resale prices (also derived resale prices, such as margin levels) as falling into the category of agreements restricting competition ‘by object’ (pursuant to Article 6(1) first sentence of the Competition Act 2007). The Supreme Court did not share the view of the UOKiK President which extended the prohibition to all vertical price agreements because of their anti-competitive object. Application of the ban contained in Article 6(1) of Competition Act 2007 to all types of price-fixing vertical agreements should be regarded as a formalistic approach. It should be borne in mind that in case of brand competition a positive effect of vertical agreements competition can be observed. According to the Supreme Court, a rigorous application of the prohibition of Article 6(1(1)) of Competition Act 2007 is not justified. The Supreme Court rightly pointed out that not every agreement belonging to this category threatens the public interest, or infringes values important to antitrust law; or that there always is a need to impose a financial penalty. Any assessment of restrictive vertical agreements must be flexible and must take into consideration the object of such agreements and a threat to or violation of the public interest. The Supreme Court’s ruling must be welcomed for two reasons: first, without questioning the past decision-making practice of the UOKiK President and existing jurisprudence on classifying price agreements as those restricting competition by
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES A Departure from a Formalistic Approach in the Assessment of Restrictive Vertical… 271 object, the Supreme Court took account of the necessity to examine whether an agreement may threaten the public interest. Second, if the protected values are, in fact, not infringed, one has to consider whether the imposition of a penalty is justified at all (rationality of the imposition of sanctions – author’s note), and if so, whether it should not be reduced (proportionality of the sanction – author’s note)3.
IV. Case analysis
Price-fixing agreements, referred to in Article 6(1(1)) of Competition Act 2007, can be horizontal or vertical in nature (distinction between the two is commonly adopted in case-law and literature but not reflected in the Competition Act). Horizontal agreements involve competitors and as such are deemed to constitute the most serious threat to competition (severest distortions of competition are called hard-core restraints). Conversely, vertical agreements, concluded between non-competitors, are recognized as less harmful to competition. In circumstances such as those at hand, a vertical price agreement was concluded between entrepreneurs operating at different levels of the supply chain – the supplier and its distributors – with resale prices being the object of the agreement. The analysis of the case law of the UOKiK President shows that the Polish antitrust authority does not consider relevant the actual form (horizontal or vertical) of a price agreement. Instead, the authority mainly focuses on the circumstances in which the agreement was concluded and its actual implementation. The Supreme Court in its judgment emphasized, however, the necessity to depart from such an inflexible approach to the classification of vertical price agreements as restricting competition. Differentiating the status of price agreements will justify a variation in their legal classification.
1. Vertical price agreements vs infringements of the public interest
Vertical price agreements (setting minimum or fixed resale prices) are classified as competition restricting agreements due to their anti-competitive object, in other words, they are seen as containing hard-core restrictions. Views that consider vertical price agreements to be prohibited due to their anti-competitive effect remain in a small minority. The Supreme Court stated in its judgment that it might be necessary to deal with agreements that are not intended to infringe the public interest pursuant to Article 6(1(1)) of Competition Act 2007. Public interest is endangered when practices are meant to restrict the creation or development of market competition4. If anticompetitive
3 Reference to infringements of the public interest is more often noted in court rulings – see judgment of the Court of Appeals in Warsaw of 5 November in Case VI ACa 160/13. 4 Judgment of 21 March 2005, XVII Ama 16/04, Journal of the Competition and Consumer Protection Office [2005] No. 2, item 27.
VOL. 2015, 8(11) 272 CASE COMMENTS practices result in an infringement of the public interest, then the premise has to be dealt with of public enforcement of competition law. A threat to, or an infringement of the public interest, is the pre-requisite for public enforcement of competition law – its absence excludes an intervention by the antitrust authority. Not every agreement in the category of vertical price agreements threatens to, or in fact infringes, the public interest. The Supreme Court’s position should be viewed as ‘a green light’ that the assessment of vertical agreements should not exclude their economic aspects, which are to be taken into account with regard to this type of vertical agreements5.
2. Vertical price agreements – object or effect category?
It is worth recalling that the Supreme Court upheld in the analysed judgment its established general principle on the classification of agreements that set minimum or fixed resale prices (as well as resale price derivatives) as falling into the category of practices which restrict competition by their object6. Differences between horizontal and vertical price fixing agreements are shown above. It should be stressed here that an agreement’s classification has an impact on the evidentiary procedure held before the UOKiK President. In the light of Article 6(1)(1) of Competition Act 2007, the anticompetitive aspect of an agreement is mirrored in its anticompetitive object or effect. The classification of an agreement by the antitrust authority as restrictive by object influences proceedings before the UOKiK President. The burden of proving an agreement’s present or future anti-competitive effects rests on the authority. Acknowledging, therefore, the view that vertical price agreements may belong to the category of anti-competitive agreements, because of their anticompetitive effect, entails the necessity to examine their effects. The occurrence of anti-competitive effects of a vertical price agreement must thus be proved by the antitrust authority.
3. Vertical agreements and the de minimis rule
The Supreme Court pointed out that the classification of vertical agreements as agreements restricting competition by their object does not justify the rigorous application of the prohibition contained in Article 6(1(1)) of Competition Act 2007 to all agreements of this type. To this end, it is worth repeating that the de minimis
5 The necessity to include among others the market conditions is pointed out by A. Jurkowska-Gomułka, ‚Stosowanie zakazu porozumień ograniczających konkurencję zorientowane na ocenę skutków ekonomicznych? Uwagi na tle praktyki decyzyjnej Prezesa Urzędu Ochrony Konkurencji i Konsumentów w odniesieniu do ustawy o ochronie konkurencji i konsumentów z 2007 roku’ [‚Effects-Oriented Application of the Prohibition of Competition Restricting Agreements? Some Comments on the Decisions Issued by the Polish Competition Authority on the Basis of the Competition Act of 2007’] (2012) 1(1) internetowy Kwartalnik Antymonopolowy i Regulacyjny 45–47. 6 Anti-competitive object of agreements – see judgment of 17 July 1997 in Case C-219/95 P Ferriere Nord SpA v Commission of the European Communities [1997] ECR I-4411; judgment of 6 April 2006 in Case C-551/03 P General Motors BV v. Commission [2006] ECR I-3173.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES A Departure from a Formalistic Approach in the Assessment of Restrictive Vertical… 273 exemption from the prohibition on restrictive agreements7 under Article 7(1) of Competition Act 2007 applies to agreements concluded between: 1) competitors, whose combined market share in the calendar year preceding the conclusion of the agreement at stake does not exceed 5% (horizontal agreements); 2) entrepreneurs, who are not competitors, if the market share of any of them in the calendar year preceding the conclusion of the agreement does not exceed 10% (vertical agreements). The de minimis rule applies to those agreements, which due to the low market share of their participants, affect competition in the relevant market only slightly8. The de minimis exemption does not apply to agreements which are particularly detrimental to competition. It does not apply, inter alia, to price agreements and other terms of sale (defined in Article 6(1)(1) of Competition Act 2007). The aforementioned agreements are prohibited irrespective of the market share of their parties. Having regard to the fact that the de minimis exemption applies to a certain category of arrangements (e.g. price, quotas), their object or effect is not taken into account in their examination. In view of the analyzed judgment, in which the Supreme Court stressed the need for an individual approach to the agreements that set minimum or fixed resale prices, and thus the necessity to identify their true purpose, it is worth mentioning the features of concerted practices9, namely: 1) the manner in which they manifest themselves; 2) objective target of the concerted practice, that is, the aim participants intend to achieve and the economic and legal context in which such practices occur; 3) various forms10;
7 Called ‘prohibition relativization’ by T. Skoczny; see T. Skoczny, ‘Instrumenty relatywizacji i racjonalizacji zakazów praktyk ograniczających konkurencję’ [‘Instruments of relativization and rationalization of the bans on competition restricting practices’] [in:] Granice wolności gospodarczej w systemie społecznej gospodarki rynkowej – księga jubileuszowa z okazji 40-lecia pracy naukowej prof. dr. hab. Jana Grabowskiego [The limits of economic freedom in the social market economy – a jubilee book on the 40th anniversary of scientific work of Prof. Jan Grabowski], Katowice 2004, p. 249ff; see also in this regard D. Miąsik [in:] T. Skoczny (ed.), Ustawa o ochronie konkurencji i konsumentów [Competition and Consumer Protection Act], Warszawa 2009, p. 453. 8 T. Skoczny, [in:] T. Skoczny (ed.), Ustawa..., p. 436; K. Kohutek, [in:] K. Kohutek, M. Sieradzka, Ustawa o ochronie konkurencji i konsumentów [Competition and Consumer Protection Act], Warszawa 2008, p. 296; P. Grabowski, ‚Zasada de minimis w nowych wyjaśnieniach Komisji Europejskiej i polskiej ustawie antymonopolowej’ (‚The de minimis rule in the new guidelines of the European Commission and in the Polish antimonopoly act’] (2003) 3 Przegląd Prawa Handlowego 26. 9 See Case 56/65 Societe Technique Mniere v. Machinesbau Uln GmbH [1966] ECR 235; Case 15/74 Centrafarm &Peijper v. Sterling Drug [1974] ECR 1147; Case 48/69 Imperial Chemical Industries Ltd. V. Komisji [1972] ECR 16. 10 See decision of the UOKiK President of 8 December 2009, 7/2009, Journal of the Competition and Consumer Protection Office [2010] No. 1, item 1.
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4) object or effect of the agreement, from which a distinction between an infringement by object and an infringement by effect can be made11. Although the Competition Act 2007 does not provide a distinction between horizontal and vertical agreements12, yet such differentiation should be taken into account in the assessment of agreements in the light of Article 6(1(1)) of the Competition Act 2007. The de minimis exemption does not apply to price agreements. However, the legislator did not define precisely whether such agreements restrict competition by object or by effect. Considering the above, it must be assumed that Article 6(1(1)) allows for the differentiation of anti-competitive agreements on the basis of their nature (horizontal vs vertical). It does not, however, determine whether a certain type of agreement should be classified as an agreement with the object to restrict competition or an agreement the effects of which may restrict competition13.
4. Criteria for setting fines
According to Article 106(1)(1) of the Competition Act 2007, the UOKiK President may impose, by way of a decision, a fine on an undertaking not exceeding 10% of the revenue earned in the accounting year preceding the year when the fine is imposed. This is so even if the undertaking has unintentionally infringed the prohibition laid down in Article 6 of the Competition Act 2007, as regards the scope not exempted by Articles 7 and 8 thereof. Thus the decision imposing a financial penalty is optional in nature. Nevertheless, the imposition of fines has become a general rule in order to ensure the effectiveness of the UOKiK President’s sanctioning policy. The Competition Act 2007 does not provide an exhaustive catalogue of grounds on the basis of which the amount of the fine to be imposed is determined. Article 111 only provides that setting the amount of the fines, referred to, inter alia in Article 106 (including also those for vertical price agreements – note by the author), requires certain factors to be taken into consideration in particular. They include: the duration, gravity and circumstances of the infringement of the provisions of the Competition Act as well as previous infringements14. It is apparent that the amount of the fine to be imposed should depend on the level of the competition threat and the infringement of public law resulting from the competition restricting practices. Doctrine emphasizes, with regard to the imposition of fines for competition restricting practices, the necessity to take into consideration factors such as: the undertaking’s economic potential, the
11 M. Sieradzka, ‘Glosa do wyroku TS of 04.06.2009 C-8/08 T-Mobile Netherlands BV and others v. Raad van bestuur van de Nederlandse Mededingingsautoriteit’ [‘Case comment to ECJ judgment C-8/08 T-Mobile Netherlands BV and others v. Raad van bestuur van de Nederlandse Mededingingsautoriteit’] (2010) 2 Glosa 97. 12 A. Jurkowska, [in:] T. Skoczny (ed.), Ustawa..., p. 386. 13 ibid. see K. Kohutek, ‘Glosa do wyroku SN of 15 May 2014, Case III SK 44/13’ [‘Case comment to the judgment of the Supreme Court of 15 May 2014’], LEX/el. 14 In-depth analysis of penalty mitigation – see M. Sieradzka, ‘The importance of ‘subjective fault’ in fixing pecuniary penalties for competition-restricting practices (Part I)’ (2013) 12 Przegląd Ustawodawstwa Gospodarczego.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES A Departure from a Formalistic Approach in the Assessment of Restrictive Vertical… 275 impact of the practice on competitors or contractors, admissible fine levels under provisions of the Competition Act and the purpose the fine is to serve15. The amount of fines for the infringement of Article 6 of the Competition Act 2007 is calculated as a percentage of the undertaking’s turnover. In the case in question, an objection was raised with regard to an infringement of Article 106(1)(1) in conjunction with Article 6(1)(1). The objection noted that unreasonable consideration was given to the revenue generated from the price agreement, as the main criterion for setting the amount of the fine. Can the amount of a fine be measured by a certain percentage of the undertaking’s revenue where the revenues from product sales covered by the anticompetitive agreement constitute a small percentage of its total income? Before giving an answer to the above question, it should be stressed that any penalty imposed should serve its purposes. The imposition of fines is an instrument designed to facilitate compliance with the provisions of the Competition Act as well as prevent future infringements16. Penalties are applied with various aims – prevention being the most important of them. A penalty serves a dual function: it should have an effect on all addresses of a legal norm and it should protect consumers against re-offences. The preventive function applies also to professional trading participants and its purpose is to deter undertakings from unlawful behaviour as well as to strengthen awareness of anticompetitive behaviour of law-abiding businesses17’. A penalty as a repressive measure applies to the penalized undertakings – for them, the penalty should be onerous18. The constitutional principle of proportionality in relation to the setting of fines requires the UOKiK President, who exercises his/her discretional powers here, to inflict sanctions the severity of which cannot go beyond the limits of their intended purpose19. EU case law also emphasizes that the principle of proportionality demands that the limits of what is appropriate and indispensable for achieving the legitimate objectives pursued by respective regulations should not be exceeded. Where there is a choice between several appropriate measures, the least onerous one should be applied; the resulting inconveniences cannot be disproportionate to the goal pursued20. Would a reduction in the penalty by the Court of Appeal, in the light of the facts established, prevent the penalty’s purpose from being achieved? It is worth noting first that an imposed penalty is to ensure the realization of certain functions of penalties and be proportionate to the magnitude of the infringement. Analyzing the facts of the case, it can be said that fine setting criteria were properly applied by the Court of Appeals. In particular, the fine inflicted (its amount) served its purpose of a repressive (inconvenience for violating competition law) as well as preventive and disciplinary measure (dissuades future violations). Making a decision
15 M. Sachajko, [in:] T. Skoczny (ed.), Ustawa…, p. 170. 16 Judgement of the Supreme Court of 24 September 2010, VI ACa 117/10, Lex no. 684113. 17 Judgment of SOKiK of 7 January 2014, XVII Ama 1/12. 18 Judgement of SOKiK of 30 October 2013, Case XVII Ama 35/12. 19 Judgment of the Court of Appeals in Warsaw of 28 June 2012, VI ACa 1379/11. 20 Judgment of 11 September 2014 in Case C-382/12 P Mastercard Inc. v. Commission; ECLI:EU:C:2014:2201.
VOL. 2015, 8(11) 276 CASE COMMENTS on the penalty level, all circumstances related to the implementation of the agreement were taken into consideration on an individual basis. The UOKiK President examined also the premise of ‘the previous infringement of the provisions of the Act’ (Art. 111) and found no reason to increase the penalty since there was no previous infringements of the said provisions. As rightly pointed out by the Supreme Court, when imposing a penalty, the antitrust authority should consider the significance of the revenue earned from the sale of the goods covered by the agreement. In other words, the amount of the fine to be imposed need to be related to the revenue earned. It should also take into account the actual circumstances of the case, including negligible revenues earned from the sales covered by the agreement or benefits derived, which may be of marginal economic importance. Proper implementation of the principle of equal treatment demands the evaluation of the factual significance, which is to be ascribed to the revenue level in assessing the circumstances of a particular case.
IV. Conclusion
The discussed judgement of the Supreme Court, following its earlier judgment in the Röben case, presents a further step towards a more economics-oriented approach towards the assessment of competition restricting agreements. According to the Supreme Court, not every vertical agreement results in a violation of the public interest, a realisation stressed by the Court. The Supreme Court also pointed out, without questioning the general classification of price agreements as practices restricting competition by object, the need to depart from the strict application of the prohibition of Article 6(1(1)) of Competition Act 2007 to all types of vertical price-fixing agreements. Such approach will affect the application of the provisions governing the imposition of fines, including the function of penalties and their proportionality to the seriousness of the infringement. The analysed judgment of the Supreme Court is an example of departing from a formalistic approach not only with regard to the assessment of vertical agreements, but also to the principles of imposing pecuniary penalties.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES B O O K R E V I E W & R E P O R T S
Małgorzata Król-Bogomilska, Zwalczanie karteli w prawie antymonopolowym i karnym [Combating cartels in antitrust and criminal law], Warszawa 2013, 511 p.
Antitrust law has been shaped in various national (or supranational) legal systems either as administrative or criminal law. Naturally, as the jurisprudence of the European Court of Human Rights has shown, this categorization is not very strict and a few features of criminal law, mainly criminal proceedings, can be attributed to antitrust law even if it is considered administrative in nature in a particular national legal system. Additionally, antitrust law has been facing a worldwide tendency to become criminalized. These two factors make it recommendable to analyse cartels in a double manner – from a (pure) antitrust and a criminal point of view. Nevertheless, such an approach has been rather rare in Polish antitrust doctrine, mainly because domestic antitrust law belongs to the vast area of administrative law (or, to be more precise, to administrative (public) economic law). This gap in Polish literature on antitrust has been largely covered by the book titled Combating cartels in antitrust and criminal law written by Prof. Małgorzata Król-Bogomilska, published in 2013 in Warsaw by Wydawnictwo Naukowe Scholar. The Author explains that working on this book was motivated by the conviction that the most important insights come to light while conducting inter-disciplinary research (p. 15). The book contains 12 chapters followed by final conclusions, which are a separate part of the book albeit not numbered. In the first chapter (‘Introduction’), the Author juxtaposes data on cartel fines in the European Union and criminal sanctions for cartels in the United States. She also provides a list of countries where violations of antitrust law have been criminalized. In the EU, these are: the Czech Republic, Estonia, France, Greece, Ireland, Romania, Slovenia and Great Britain. Outside the EU (apart from the US and Canada), they include: Australia, Brazil, Israel, Japan, South Korea, Mexico, and Russia. In the first chapter of the book, the Author formulates five fundamental research questions to be developed in its further parts (p. 27–28). First, Prof. M. Król-Bogomilska asks about the real scale of the similarities and the differences in the legal methods of combating cartels in the field of antitrust (based on the concept of ‘administrative delict’) and in criminal law (providing a ‘standard’ criminal liability). Second, the Author considers the consequences of differences that should primarily be searched for in practice. Yet in the Professor’s opinion, it is also very important to analyse these consequences with a view to future
VOL. 2015, 8(11) 278 BOOKS REVIEWS legal solutions. [unclear, consider revising] Third, a question appears on a (positive or negative) assessment of legal provisions in various legal systems. [grammatically correct but unclear meaning] Forth, the Author asks about the possibility to apply legal constructions specific to liability for an administrative (antitrust) delict in criminal liability, and to apply criminal elements in administrative (antitrust) liability. Finally, the Author decides to consider the perspectives for the criminalization of cartels in Poland with a nexus to post-Lisbon EU law. The second chapter is dedicated to legal and economic characteristics of cartels (‘Combating cartels – legal and economic problems’). Economics and market issues seem to act as the basic criteria for describing cartels in this chapter. The Author refers here, for instance, to concepts and theories of the Harvard and the Chicago schools (p. 47–49). Professor M. Król-Bogomilska also draws the attention of the readers to the significance of the tendencies for an economization of antitrust analysis (p. 51–54). The third chapter (‘Basis for liability for cartel infringements in EU and Polish antitrust law’) analyzes EU and Polish competition law. Apart from the presentation of their respective antitrust provisions, also from a historic perspective, the chapter provides also a further analysis of various concepts specific to competition law, such as the notion of an undertaking (p. 76–85). The analysis goes far beyond a basic application of the prohibition of cartels. For instance, while writing about undertakings, the Author presents the single economic unit doctrine (p. 78–81). It is worth mentioning that the chapter refers to many ‘fresh’ antitrust concepts and ideas such as developments of the single economic unit doctrine mentioned above or hub and spoke cartels (p. 95–96). However, it is not totally clear why substantive rules of EU and Polish competition law are presented separately here. As a result, it is sometimes difficult to guess if a certain concept or interpretative direction, described in the chapter with reference to EU law, can be, or has been applied in national law and practice. The fourth chapter (‘Special form of participation in cartels’) provides an excellent analysis of the different roles played by cartel participants. This is likely to be the first example in Polish antitrust literature when such problems as the role of a leader and instigator of a cartel, as well as facilitator liability or passive members’ liability, are commented on. Professor M. Król-Bogomilska, being a criminal lawyer by origin, is absolutely entitled to conclude that a special legal basis for liability for assisting cartel activities as well as for encouraging cartels should be introduced into antitrust law. Additionally, the Author points out that the role of a cartel leader could be differentiated from other roles of cartel members (p. 122). The fifth chapter (‘Personal placement of liability for cartel violations’) raises problems of parental liability and successor’s liability for cartels. Certainly, these issues are often debated in antitrust jurisprudence and literature. In her consideration, the Author refers largely to ECJ’s jurisprudence on parental and successor’s liability. Actually, she is very critical about the views of the ECJ, specially regarding the reasons listed by the Court in order to justify the liability of a dominating company for cartel violations undertaken by members of the same economic unit. Prof. M. Król-Bogomilska rightly claims that the analysis of the real participation of a
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Zwalczanie karteli w prawie antymonopolowym i karnym 279 parent company in a violation attributed to a daughter (dependant) company are somehow ignored either by courts or by representatives of antitrust doctrine. The critical approach to European jurisprudence becomes an incentive for the Author to formulate a few assumptions for a new direction in antitrust policy in this area (p. 136–141). She proposes resigning from the presumption of liability of a parent company and focusing on proving the role of the dominating company in the violation of antitrust law (p. 141). What seems somewhat unsatisfying in this part of the text, is the lack of any considerations regarding parental liability for antitrust infringements in Poland – even if domestic jurisprudence on this issue is rather modest, this topic has been highlighted in Polish antitrust literature. This weakness is eliminated in a further part of the chapter, concerning the liability of successors, which contains an analysis of Polish judicial and decisional practice referring to this problem (p. 145- 146). The chapter finishes with the Author’s view on successors’ liability. Just as in the case of parental liability, she stresses the necessity to resign from any automatism in recognizing liability of an entity that was not personally involved in a cartel (although such liability cannot be excluded) (p. 148). The title of the sixth chapter (‘Administrative, penal and civil sanctions for antitrust violations in EU and Polish antitrust law’) suggests that it provides an overall look on sanctions applied for antitrust violations. Actually, the title seems a bit confusing as the chapter also covers interim measures or commitments, which are not, as such, sanctions in the formal meaning of the word (however, measures mentioned above are considered in the chapter as administrative sanctions (p. 153–161), the Author claims that these sanctions can be reconstructed from a catalogue of decisions that can be adopted by the European Commission or Polish NCA). It is worth mentioning that the Author clearly classifies fines as penal (not administrative) sanctions (p. 161 and further). The importance of this chapter seems to centre on its considerations on the safeguarding function of rules for imposing fines – this issue is very important when a tendency to raise the level of fines has been recently visible in many countries, including – as the Author correctly points out – Poland (p. 177). It is fair to say that the most interesting (and also fruitful) part of these considerations is the analysis of the concepts of ‘fault and negligence in antitrust law (p. 183–190) and its inspiring remarks on criminal liability of ‘collective entities’ (p. 191–194). This part of the analysis can be considered as very original. The seventh chapter (‘Leniency in cartel cases’) presents rules (including soft law) on leniency in the US, the EU and its particular member states, and in Poland. The Author confirms that the number of countries worldwide which use leniency has grown in recent years. She also stresses that leniency is a specific dynamically developing institution of competition law (p. 223). Prof. M. Król-Bogomilska speaks in favour of harmonizing leniency, mainly in the EU, but she is critical about certain of its aspects, e.g. lack of one-stop-shop concerning a leniency application (ibidem). She also correctly points out that the scope of leniency in Poland (covers both horizontal and vertical agreements) is too broad (p. 224). The eighth chapter (‘Nature of penal sanctions in cartel administrative delicts from the perspective of Strasbourg and EU jurisprudence’) presents the judicial and
VOL. 2015, 8(11) 280 BOOKS REVIEWS doctrinal debate on the potentially penal character of fines in administrative law. This debate was held primarily in the framework of the European Convention on Human Rights and, secondly, through the lens of the EU Charter of Fundamental Rights. The Author’s approval of a penal character of fines in antitrust law can be easily deducted from the following parts of a book (and found in her earlier works1) so this chapter only develops the idea. Polish jurisprudence is also shortly referred to in the context of the problem raised in this chapter (p. 227). However, it is without a doubt a pity that the Polish perspective on this issue is not presented in a broader manner. The ninth chapter (‘Cartel offences. Between traditional and hidden criminalization’) could be a separate book in itself because it analyses an extremely important and interesting tendency in modern antitrust law. What can be easily seen in this chapter, and what the Author probably wants to prove, is the variety of methods, dimensions and scopes of criminalization in particular countries. This makes it impossible to describe and to analyse criminalization of antitrust law as a uniform phenomenon. Penal character of antitrust law originates from the US, a fact that surely justifies dedicating a great part of this chapter to American law and practice (p. 256–271). Then Prof. M. Król-Bogomilska shows a dimension of criminalization of cartels in the majority of EU Member States (Austria, Czech Republic, Denmark, Estonia, France, Germany, Great Britain, Greece, Hungary, Ireland, Italy, Lithuania, The Netherlands, Portugal, Romania, Slovenia, Spain, Sweden). Commenting on a criminalization of cartels in Polish law the Author claims that its scope is very narrow and limited only to bid rigging that are offences by Art. 305 of the Polish Penal Code2 (p. 340). A framework for penal sanctions under EU law is also pointed (p. 271–276). Surely this part of the reviewed book is a presentation of the most developed research on criminalization of antitrust law in Polish literature and conclusions contained in the last part of the chapter (p. 354–359) constitute so far the most complex voice in a – practically non-existing – debate upon this legal phenomenon. I personally appreciate a very reasonable (in fact critical) opinion expressed by the Author that administrative liability of natural persons that was finally introduced in the Polish Competition Act (although the Author refers to draft act) should have been replaced by criminal liability (p. 357). The tenth chapter (‘Conjuncture of liability in cartel cases and a rule of proportionality and ne bis in idem’) presents a very complex problem of current antitrust law that tends to use instruments taken from all key areas of law (administrative law, penal law, civil law). In this vast chapter (over 50 pages) Prof. M. Król-Bogomilska analyses a conjuncture of liability in many dimension, e.g. in a ‘territorial’ dimension: a conjuncture of sanctions in domestic and EU law (p. 373–376) or in the latter and the third countries (p. 376–385), a conjuncture of liability in a system of parallel competences of NRAs in the EU Member States (p. 388–391). Certainly, a great part
1 M. Król-Bogomilska, Kary pieniężne w prawie antymonopolowym: w ustawie o ochronie konkurencji i konsumentów, w europejskim prawie wspólnotowym [Fines in antitrust law: in Act on Competition and Consumer Protection, in EC law], Warszawa 2011. 2 Act of 6 June 1997 – Penal Code, Journal of Laws 1997 No. 88, item 553 as amended.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Zwalczanie karteli w prawie antymonopolowym i karnym 281 of the chapter is dedicated to a potential conflict of liability in a domestic law (p. 391- 409). A scope of such analysis in reference to Polish law is impressive as the Author concerns either literature or jurisprudence from both areas: penal and administrative law. She correctly concludes that many problems of a concours of liability has have not been solved yet (p. 409). Fortunately, Prof. M. Król-Bogomilska meets a challenge in the final part of the tenth chapter and proposes, if not detailed solutions, at least directions of desired changes. What makes these conclusions specially valuable (p. 409–417) for antitrust lawyers is a very deep insight into penal law. The eleventh chapter (‘Perspectives of co-operation for criminalization of cartels after the Treaty of Lisbon’) focuses on perspectives of introducing penal provisions that could be applied in cartel cases. Such perspectives (potentially) appeared after the Treaty of Lisbon went into force (1 December 2009). The Author definitely rejects an opinion that TFEU provisions create any basis for a possibility for criminalization of cartels at the EU (p. 446), however she notices some opportunities to introduce under Art. 83 TFEU (even if it is partly unclear) minimally harmonized norms concerning cartel offences. Considerations contained in this chapter are very interesting and inspiring but in my view they does not deserve for a separate chapter and they could successfully be a part of the ninth chapter. The twelfth chapter (‘Compliance – a new form of a prevention from cartels’) describes goals and advantages of compliance programmes, but the Author also sceptically comments on guidelines, dedicated for undertakings and published even by very distinguished organization, where compliance means in fact an avoidance of an intervention by antitrust authorities (p. 451–452). A final part of a chapter analyses an influence of compliance programmes on an amount of a fines in the ECJ’s jurisprudence – a general conclusion of these analysis is that an existence of compliance programmes does not necessarily constitute a mitigating factor. A book finishes with ‘Summary and final conclusions’ where the Author gathers her key findings and considerations from previous chapters and adds some extraordinary comments. What I find specially interesting in this part of a book are ‘instructions’ on criminal aspects on antitrust law, these instructions are expressed directly by titles of subchapters (e.g. ‘Need to strengthen a guaranteeing function of principles for applying fines’ – p. 472–473). A book under review greatly contributes to Polish research on antitrust law. What can be quite astonishing there are no many publications dedicated to strictly cartel issues in Poland3 – a book by Prof. M. Król-Bogomilska just broadens a scope of Polish doctrine. A unique value of a book is a combination of antitrust and criminal perspective in multidimensional analysis of cartels. Therefore this book seems interesting not only for antitrust enthusiasts but also for criminal lawyers who usually do not posses any deeper knowledge upon cartels, even if this knowledge can be quite useful for applying Art. 305 of the Polish Criminal Code (a provision recognizing bid rigging as an offence). Even if for non-criminal lawyers (as myself) some ideas
3 Z. Jurczyk, Kartele w polityce konkurencji Unii Europejskiej [Cartels in EU competition policy], Warszawa 2013.
VOL. 2015, 8(11) 282 BOOKS REVIEWS developed by the Author as expected amendments to antitrust legislation and practice are rather sophisticated, it is just valuable that such a discussion in Poland was initiated by a reviewed book. It is worth mentioning that a book refers to and comments on the most recent EU and Polish case law. All the consideration are widely based on domestic and foreign literature concerning a topic. Even if a book was published in Spring 2013, before the Polish Act on Competition and Consumer Protection was seriously amended (July 2014), it touches many new institutions in Polish antitrust law that were prospected in draft amendments (studied by the Author) and finally introduced due to amendments (e.g. remarks on a settlements or remedies – p. 196–197, 201–202). Certainly, a book by Prof. Bogomilska-Król signs in a general discussion on one of the most influential tendency in modern antitrust, which can be called ‘criminalization’, and as such should be read by everybody who is interested in this aspect of antitrust. It can be even recommended – and in my opinion it is an advantage of this book – for beginners in antitrust because a scope of book and a method of presenting ideas and concepts make them easily accessible.
Dr. hab. Agata Jurkowska-Gomułka University of Information Technology and Management, Rzeszów (Poland)
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Kseniya Smyrnova, Pravove regulyuvannya konkurencii v Evropeis’komu Soyuzi: teoriya i praktuka [Legal Regulation of Competition in European Union: theory and practice], Odessa 2015, 432 p.
The reviewed monograph written by Kseniya Smyrnova is entitled Legal Regulation of Competition in the European Union: theory and practice (Pravove regulyuvannya konkurencii v Evropeis’komu Soyuzi: teoriya i praktuka – in Ukrainian). The book was published in Odessa at the beginning of 2015. Competition policy is about applying rules to make sure companies compete fairly with each other. This encourages enterprise and efficiency, creates a wider choice for consumers and helps reduce prices and improve quality. These are the reasons why the EU fights anticompetitive behaviors, reviews mergers and encourages market liberalization. However, the author argues and proves within the reviewed book that competition has more than just a purely economic function of regulating market mechanisms. It is said that competition has also a social function, promoting benefits for consumer welfare as a result of fair pricing and high quality products. The author proposed to consider competition in both a broad and a narrow sense. In the broad context, competition can be characterized by three main features: 1) competition is a regulator of pricing policy; 2) it is also a prerequisite for the realization of the rights of consumers and the growth in living standards and, finally; 3) competition is the lawful business conduct in the market, which aims to obtain favorable terms of sales and production of goods. Looking at competition in the narrow sense, competition is a form of legal conduct on the market (in a legal framework). In other words, competition is limited by the law. It should be emphasized that these frameworks are established by national State legislation and by international laws. It seems logical that the broad manner of understanding competition is interdisciplinary and covers economic and social as well as legal principles. The narrow concept of competition is more formalized, and therefore becomes the object of this study. The book focuses on the systematic evolutionary stages of the origin and development of the idea of free competition, which is subjected to changes depending on the socio-economic factors of the region. The question is whether free competition involves State intervention in economic processes? How far can this State influence affect the development of fair competition? And, most importantly: is free competition justified in terms of getting more benefits to consumers?
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The book contains a general introduction, plus six substantial chapters based on the main spheres of competition law: history of competition law development & main theories on competition (Chapter 1); basic principles of EU competition law (Chapter 2); anti-competitive regimes and agreements (Chapter 3); abuse of a dominant position (Chapter 4); and merger regulation (Chapter 5); impact of EU competition law on the legal framework of Ukraine due to the Association Agreement (Chapter 6). The author presents a unique view of the history of competition law starting from Roman law (pp. 11–22) as well as the formation of international regulation of competition (pp. 22–30), including the history of EU Competition Law (pp. 63–82). The book formulates a clear thesis about the role of the EU Treaty, as interpreted by the Court of Justice, as the EU’s economic constitution which draws on well- established literatures in ordoliberal economics and political liberalism. The book continues to develop this argument on the basis of case studies viewed through the potentially contradictory lenses of two very different forms of EU policy-making: competition policy (with its highly juridified enforcement systems meant to protect competitive markets) and industrial policy (an archetypal ‘soft area’ of policy-making meant to deal with problems of market failure where the Member States have been notably reluctant to confer competences upon EU institutions). The analyzed doctrinal thoughts focused on the increased role of government intervention in economic processes. This is what the origin of the idea of free competition owes the principles to economic liberalism, which in theory can be traced back to the laissez-faire doctrine, which occurred already in the 18th century as a requirement of economic freedom on the part of the French bourgeoisie. It was found that much of the idea of competition in a liberal market were borrowed from the works of ordoliberalists (V.Oyken, A. Müller-Armak, L. Erhar) who recognized this form of market economy in which the competition framework was actively created by the State in order to achieve the highest possible intensity of competition and, at the same time, to limit factors that distort competitive conditions. Ordoliberalists believed that the regulation of monopolies and competition automatically facilitates social justice. The author proves that EU competition policy is not an isolated domain, and thus the reviewed monograph is heavily laced with cross-national or international comparisons. In this context, the author provides a comparative analysis of the American and the European system of competition regulation describing their main features and differences of cartel rules, merger control provisions and abuse regulations. The value of the reviewed monograph par tially results also from the fact that the analysis presented therein is supported by numerous references to jurisprudence and case-law, as well as civil and competition law doctrine. The book’s final conclusions are extremely diversified. Much of the cognitive success of the book stems from the appreciation of the interdependence of substantive and procedural rules in this organizational context. With all its methodological strictness, including bibliographical background, the book presents a harmonious combination
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Pravove regulyuvannya konkurencii v Evropeis’komu Soyuzi: teoriya i praktuka 285 of theoretical economic and legal foundations of the origin and functioning of competition rules in the EU and their spreading across the world. Special attention is paid to the analysis of the EU–Ukraine Association Agreement and especially its “competition clause” (pp. 328-349). The book leaves the reader convinced that Ukrainian competition law does indeed need a reform which should, inter alia, focus on the implementation of the transparency principle and further enforcement of harmonized competition rules. In conclusion, I would strongly recommend the reviewed monograph to more than just the representatives of the competition law doctrine. Due to the numerous references made in the reviewed book to interdisciplinary (economic & legal) doctrines and extensive jurisprudence, the book may prove to be useful for practical lawyers as well as researchers also. Above all, it demonstrates the intensity of the interactions between those who deal with EU competition law but in their different capacities: as practitioners, as policy-makers, as enforcers, and as academic commentators. I believe therefore that this publication should be found in every legal library concerned with the role of competition in the current system of International and European Law.
Dr. Korotkyi Tymur Associate Professor of the Department of International Law and International Relations of National University “Odessa Law Academy” (Odessa, Ukraine), PhD.
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Kseniya Smyrnova, EU Competition Law, Odesa 2013, 144 p.
The reviewed study is a welcome addition to European competition law literature. Modern patterns of legal research call upon scholars to take a complex interdisciplinary approach to their work. This book certainly contributes to such attempts. The unifying theme of this book is the analysis of EU competition policy and the legal foundations of EU competition law. Any scholar interested in the competition policy and the internal market of the EU will benefit from the highly interesting set of information and data presented therein. The book is well structured and logically construed. The study is divided into six chapters. Chapter 1 deals with an overview of EU competition policy and the legal foundations of its competition law. Explained therein are the concept of competition and the history of EU competition policy against a background of general European integration objectives and achievements. The Author rightly emphasizes here the importance of the trade criterion for EU competition policy. Chapter 2 offers a comprehensive study of Article 101(1) TFEU and the general provisions of its application. The first part of the chapter shows the difficulties in considering and allying basic legal concepts such as ‘undertaking’, ‘single economic entity’, ‘appreciability’ and so on. Furthermore, the Author provides here an in-depth analysis of the de minimis doctrine, the concept of the relevant market as well as looks into the substance of the leniency policy. Considered also is the cooperation between the European Commission and the authorities and the judiciaries of individual EU Member States. Chapter 3 deals with Article 101(3) TFEU covering, inter alia, exemptions from the prohibition contained in Article 101(1) TFEU and vertical agreements. In particular, the Author scrutinizes types of exemptions and conditions for block exemptions in the European internal market. Continuing this analysis, Chapter 4 examines cartel practices and exemptions for horizontal agreements in the EU. Therein, the Author defines ‘hardcore cartels’ in EU law and their impact on horizontal agreements on cooperation. Chapter 5 tackles the very important issue of abuse of a dominant position within the European internal market. In particular, it depicts various forms of abuse and encapsulates the meaning of the concept of ‘dominant’ in EU law and the jurisprudence of European Courts. Chapter 6 provides a substantive overview of EU merger regulations and related jurisprudence of European Courts.
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Chapters 2–6 complete the study and make the book work as a whole by drawing together all of the threads identified in the first chapter – they elaborate on the general framework explaining the legal foundation of EU competition policy. Undoubtedly, the study will be very useful for academics and practitioners active in the area of EU competition law and policy. Great added value is provided by the book’s case studies (pp. 130–138). They can be used in class and for individual work. Well structured and comprehensive tables offer access-friendly information on the most complicated provisions of EU competition law. In any event, the book is an invaluable source of information on comparative and international relations which should be a starting point for any closer investigation in this field.
Prof. Dr. hab. Roman Petrov Jean Monnet Chair in EU Law, the National University of Kyiv-Mohyla Academy (Ukraine) [email protected]
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES CONFERENCE REPORT
The Milestones of Law in the Area of Central Europe 2014. Casta-Papernicka (Slovakia), 27–29 March 2014
The 8th annual international conference of PhD candidates and young researchers entitled ‘The Milestones of law in the area of Central Europe 2014’ was held on 27-29 March 2014 in Casta-Papernicka (Slovakia). It was organized under the auspices of the Dean of the Faculty of Law of the Comenius University in Bratislava. The goal of the conference was to present a general contribution from young scholars to the development of legal sciences in Central Europe. The conference gathered researchers from several countries, mainly from Slovakia, Poland, Czech Republic, Ukraine, Romania, Georgia, Albania, Russia, Austria and Hungary. It was an excellent opportunity for young researchers originating from a great variety of countries to exchange their legal knowledge and scientific experiences, as well as to undertake comparative discussions on various aspects of the law. The conference included an official opening, nine parallel substantive sessions held in Slovakian, one international session held in English, and a short summary. The participants of the conference were welcomed by Lydia Tobiasova, Vice-Dean for foreign relations and grant policy at the Faculty of Law of the Comenius University in Bratislava. After the official opening, the conference was carried out in parallel substantive sessions covering such legal areas as: administrative law, substantive and procedural civil law, constitutional law, commercial law, financial law, legal theory and history of law, labor law, international and European law and substantive and procedural criminal law. The English language session was chaired by Prof. Tibor Tajti from the Central European University, and was devoted to the following subject: ‘Influence of case-law on the formation of legal practice and the influence of legal practice on the formation of case-law’. Several speeches on competition law, arbitration and specific aspects of commercial law were presented during the English language session, which lasted three days. They covered issues such as: the influence of Post Danmark case-lawon the interpretation of Article 102 TFUE (K. Krzystek, University of Łódź); influence of CJEU’s case-law on the establishment of the antitrust private enforcement doctrine in Europe (M. Gac, Jagiellonian University); consumer protection in crowd funding (A. Horvathova, Central European University); influence of case law on international commercial arbitration (J. Glanc, Jagiellonian University); influence of case law on arbitration in consumer credit in the EU and US (A. Gikay/C. G. Stanescu, Central European University) and on the formulation of arbitration clauses in franchise agreements
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(P. Zivkovic, Central European University); and finally, influence of case law on shaping specific provisions of commercial law (I. Kisely, Comenius University). Mentioned among other interesting presentations on particular issues of European and international law should be a speech delivered by M. Kiełbasa (Jagiellonian University) on recent changes in EU law concerning the posting of workers, a speech by K. Szczepańska (Adam Mickiewicz University) on the transfer of voting rights in limited liability companies, and a speech by B. Greczner (Wroclaw University) who analyzed the influence of CJEU’s case-law on Central European Judges. The English session was closed by Prof. Tibor Tajti who stressed the strong influence exercised by case law and legal doctrine on the formulation of legal provisions and policies in the analyzed jurisdictions. All speakers agreed that the interrelation between the case-lawof European, international and national courts, and the national legal practice, is increasingly visible, especially in legal areas such as competition law, commercial law and arbitration. Speaker emphasized also the growing importance of scholarship in the formulation, establishment and interpretation of legal provisions. The conference ended on Saturday with a speech given by Prof. Marián Vrabko, Dean of the Faculty of Law of the Comenius University in Bratislava. The conference shall be regarded as a great opportunity for young legal scholars to present the results of their work before an international community of researchers. Moreover, due to the complexity of the issues covered, the large number of participants and great diversity of their national backgrounds, the conference proved a perfect platform for the exchange of national experiences within a multicultural environment. The conference must therefore be positively evaluated and can be regarded as an important scientific initiative in the Central European area. The conference was followed by a post-conference publication comprising all papers presented during the conference1.
Maciej Gac PhD Candidate, Jagiellonian University/University of Toulouse [email protected]
1 See ‘The Milestones of Law in the Area of Central Europe 2014’, Bratislava 2014, ISBN 978-80-7160-371-9, available at: http://www.lawconference.sk/milniky/sprava/files/doc/ ZBORNIK%202014.pdf.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES BIBLIOGRAPHY 2013 & 2014
POLAND*
Books (2014)
Góral Z., Prusinowski P., Zakaz konkurencji w prawie pracy [Non-competition clause in Labour Law], Wolters Kluwer business, Warszawa 2014. Kohutek K., Sieradzka M., Ustawa o ochronie konkurencji i konsumentów. Komentarz [Competition and Consumer Protection Act. Commentary.], LEX a Wolters Kluwer business, Warszawa 2014. Pawłowska M., Konkurencja w sektorze bankowym. Teoria i wyniki empiryczne [Competition in bank sector. Theory and empirical results.], C.H.Beck, Warszawa 2014. Sikory P., Komentarz do nowelizacji ustawy o ochronie konkurencji i konsumentów [Commentary to amendment to an Act on Competition and Consumer Protection], Wiedza i Praktyka, Sulejówek 2014. Skoczny T. (red.), Ustawa o ochronie konkurencji i konsumentów. Komentarz [Competition and Consumer Protection Act. Commentary.], C.H. Beck, Warszawa 2014. Więcko-Tułowiecka M., Ochrona konsumentów w umowach ubezpieczenia [Consumer protection in insurance agreements], LexisNexis, Warszawa 2014.
Books (2013)
Błachucki M., Polish Competition Law, UOKiK, Warszawa 2013. Bolecki A., Wymiana informacji między konkurentami w ocenie organów ochrony konkurencji [Exchange of information between competitors in an assessment of antitust authorities], Wyd. Naukowe Wydziału Zarządzania UW, Warszawa 2013. Chałubińska-Jentkiewicz K., Audiowizualne usługi medialne. Reglamentacja w warunkach konwersji cyfrowej [Audiovisual media services. Reglamentation in a digital conversion], LEX a Wolters Kluwer business, Warszawa 2013. Chołodecki M., Kontrola sądowa decyzji Prezesa Urzędu Komunikacji Elektronicznej [Judicial control of decisions of the President of Office of Electronic Communications], Wyd. Naukowe Wydziału Zarządzania UW, Warszawa 2013. Cygler J., Aluchna M., Marciszewska E., Witek-Hajduk M.K., Materna G., Kooperencja przedsiębiorstw w dobie globalizacji. Wyzwania strategiczne, uwarunkowania prawne [Co-opetition of enterprises in an era of globalisation. Strategic challenges, legal conditions], Oficyna a Wolters Kluwer business, Warszawa 2013. * Bibliogpraphy for 2014 compiled by Katarzyna Skowrońks, PhD student, Faculty of Law and Administration University of Warsaw, Research-Technical Assistant, Centre for Antitrust and Regulatory Studies, Faculty of Management, University of Warsa w. Bibliogpraphy for 2014 compiled by dr. hab. Agata Jurkowska-Gomułka, University of Information Technology and Management, Rzeszow.
VOL. 2015, 8(11) 292 BIBLIOGRAPHY 2013 & 2014
Czernicki F., Skoczny T. (red.), Polish Airports in the European Union: Competitive Challenges, Regulatory Requirements and Development Perspectives (ed. F. Czernicki, T. Skoczny), Wyd. Naukowe Wydziału Zarządzania UW, Warszawa 2013. Jarecki Akira S., Modele prokonkurencyjnych rozwiązań prawnych w zakresie pasażerskich przewozów kolejowych [Models of procompetitive legal solutions in passenger rail transport], Instytut Wydawniczy EuroPrawo, Warszawa 2013. Jurkowska-Gomułka A., Publiczne i prywatne egzekwowanie zakazów praktyk ograniczających konkurencję: w poszukiwaniu zrównoważonego modelu współistnienia [Public and private enforcement of prohibitions of anticompetitive practices: searching for sustainable model of co-existence], Wyd. Naukowe Wydziału Zarządzania UW, Warszawa 2013. Kociubiński J., Usługi świadczone w ogólnym interesie gospodarczym w prawie Unii Europejskiej. Wyzwanie dla europejskiego modelu gospodarczego [Services of general economic interests in the EU law. Challange for European economic model], TNOiK „Dom Organizatora”, Toruń 2013. Król-Bogomilska M., Zwalczanie karteli w prawie antymonopolowym i karnym [Combating cartels in antitrust and criminal law], Wyd. Scholar, Warszawa 2013. Krzywkowski M., Zasada dostępu stron trzecich w prawie energetycznym Unii Europejskiej i Polski [Third party access rule in the EU and Polish energy law], Difin, Warszawa 2013. Lesiak P., Konkurencja między transportem samochodowym a kolejowym w Polsce w świetle kształtowania racjonalnej struktury gałęziowej przewozów ładunków [Competition between road and rail transport in Poland from a perspective of shaping rational structure of transport of goods], Oficyna Wydawnicza SGH, Warszawa 2013. Marciszewska E., Wpływ implementacji regulacji w europejskim systemie transportowym na zmiany strukturalne na rynku usług [Impact of implementation of regulations in European transport system on structural changes on a market of services], Oficyna Wydawnicza SGH, Warszawa 2013. Maziarz A., Porozumienia wertykalne w prawie konkurencji Unii Europejskiej [Vertical agreements in EU competition law], Wydawnictwo KUL, Lublin 2013. Piątek S. (red.), Telecommunications Regulation in Poland, Wyd. Naukowe Wydziału Zarządzania UW, Warszawa 2013. Piszcz A., Sankcje w polskim prawie antymonopolowym [Sanctions in Polish antitrust law], Wyd. Temida 2, Białystok 2013. Rosa G., Konkurencja na rynku usług transportowych [Competition on a market for tranpsort services], C.H. Beck, Warszawa 2013. Sikorski R., Funkcjonowanie zasobów patentowych w prawie konkurencji Unii Europejskiej [Functionning of pool patents in the EU competition law], C.H. Beck, Warszawa 2013. Szydło M., Krajowy parlament jako regulator sektorów sieciowych [National parliament as a regulator of network industries], LEX a Wolters Kluwer business, Warszawa 2013. Turno B., Leniency. Program łagodzenia kar pieniężnych w polskim prawie ochrony konkurencji [Leniency in Polish competition law], LEX a Wolters Kluwer business, Warszawa 2013. Wach M., Regulacyjne i cywilnoprawne aspekty roamingu międzynarodowego [Regulatory and civil aspects of international roaming], LEX a Wolters Kluwer business, Warszawa 2013. Walaszek-Pyzioł A. (red.), Regulacja innowacja w sektorze energetycznym [Regulation and innovation in energy sector], C.H. Beck, Warszawa 2013.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES BIBLIOGRAPHY 2013 & 2014 293
Walulik J., Reforma regulacyjna. Przykład transportu lotniczego [Regulatory reform. An example of air transport], Instytut Wydawniczy EuroPrawo, Warszawa 2013. Wiktorowska A., Prezes Urzędu Transportu Kolejowego. Zagadnienia administracyjnoprawne [President of Office of Rail Transport. Perspective of administrative law], LEX a Wolters Kluwer business, Warszawa 2013. Żurawik A., Interes publiczny w prawie gospodarczym [Public interest in economic law], C.H. Beck, Warszawa 2013.
Articles (2014)
Akira Jarecki S., ‘Pomoc de minimis dla przedsiębiorstw świadczących usługi w ogólnym interesie gospodarczym’ [‘De minimis aid for undertakings entrusted with provision of services of general economic interest’] (2014) 1 Przegląd Ustawodawstwa Gospodarczego. Aziewicz D., ‘Konkurencja dynamiczna w teście istotnego ograniczenia efektywnej konkurencji. Glosa do wyroku Sądu z dnia 11 grudnia 2013 r. w sprawie T-79/12, Cisco Systems, Inc. i Messagenet SpA przeciwko Komisji Europejskiej’ [‘Dynamic competition in the test of significant reduction of effective competition. A commentary to the judgment of the Court from 11th December, 2013. in case T-79/12, Cisco Systems, Inc. and Messagenet SpA v European Commission’] (2014) 6(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Aziewicz D., ‘Kontrola nabywania pakietów mniejszościowych przez Komisję Europejską w planowanej reformie rozporządzenia 139/2004’ [‘Control of purchasing minority packages by the European Commission in the planned reform of regulation 139/2004’] (2014) 9(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Aziewicz D., ‘Naruszenie obowiązków proceduralnych przez Prezesa Urzędu Ochrony Konkurencji i Konsumentów. Wyrok Sądu Najwyższego z dnia 3 października 2013 r., III SK 67/12 PKP Cargo’ [‘Violation of procedural obligations by president of anOffice of Competition and Consumer Protection. Verdict of the Supreme Court from October 3rd, 2013, III SK 67 / 12 Polish State Railways Cargo’] (2014) 1(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Bernatt M., ‘Sarah Riddell, William Schubert, Spencer Weber Waller, Antitrust in Pop Culture: A Guide For Antitrust Gurus, Institute for Consumer Antitrust Studies, Chicago 2014 (review)’ (2014) 9(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Bogdanowicz P., ‘Co ma znaczenie (unijne)? I jakie? Rozważania w świetle art. 5 rozporządzenia nr 1370/2007’ [‘What is significant (EU)? And what? Reflections under Art. 5 regulation No. 1370 / 2007’] (2014) 7(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Bolecki A., ‘Kara w wysokości rażąco wygórowanej. Wyrok Sądu Apelacyjnego w Warszawie z dnia 16 lipca 2013 r., VI ACa 1615/12’ [‘Penalty in the amount of gross demand. Verdict of Court of Appeal in Warsaw from 16th July 2013, VI ACa 1615/12’] (2014) 1(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Dudzik S., Tombiński A., ‘Wyznaczanie rynków produktowych w ramach kontroli koncentracji sieci sklepów wielkopowierzchniowych. W kierunku konwergencji praktyk krajowych i unijnych?’ [‘Determining product markets within the framework of the control of concentration of large surface stores. Towards the convergence of domestic and EU practices?’] (2014) 6(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny.
VOL. 2015, 8(11) 294 BIBLIOGRAPHY 2013 & 2014
Działo J., ‘Pomoc publiczna a polityka konkurencji w Unii Europejskiej w okresie kryzysu gospodarczego’ [‘Public aid and the competition policy in the European Union in the period of an economic crisis’] (2014) Vol. 13 No. 1 Ekonomia i Prawo. Dziomdziora W., ‘Umowy dotyczące treści cyfrowych niezapisanych na nośniku materialnym w świetle ustawy o prawach konsumenta’ [‘Agreements pertaining to digital contents unwritten on material carrier under Act of consumer rights’] (2014) 8(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Etel M., ‘Kilka uwag dotyczących pojęcia „przedsiębiorcy” w prawie ochrony konkurencji. Glosa do postanowienia Sądu Najwyższego z 24 września 2013 r., III SK 1/13’ [‘A few remarks regarding a term “businessman” in the law of protection of competition. Gloss to the Supreme Court decision from 24th September, 2013, III SK 1/13’] (2014) 3(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Frączak K., ‘Ochrona zbiorowych interesów konsumentów w działalności pocztowej – przegląd decyzji Prezesa Urzędu Ochrony Konkurencji i Konsumentów z lat 2007– 2013’ [‘Protection of collective interests of consumers in postal activity – review of the decision of the president of an office of Competition and Consumer Protection from years 2007–2013’] (2014) 2(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Godyń M., ‘Wpływ zmian w zakresie prawa konsumenta do odstąpienia od umowy wprowadzonych przez ustawę o prawach konsumenta na branżę e-commerce’ [‘Influence of changes to the extent of consumer rights to withdraw from the agreement introduced in the act of consumer rights in e-commerce sector’] (2014) 4(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Gołąb Ł., ‘Kontrola decyzji i postanowień Prezesa UTK przez Sąd Ochrony Konkurencji i Konsumentów. Glosa do postanowienia Sądu Okręgowego w Warszawie – Sądu Ochrony Konkurencji i Konsumentów z 27 listopada 2013 r. (XVII AmK 22/13)’ [‘Control of the decisions and resolutions of the Office of Railway Transport by Court of Competition and Consumer Protection. Gloss to the resolution of the Regional Court in Warsaw – Court of Competition and Consumer Protection from 27th November 2013, (XVII AmK 22/13)’] (2014) 7(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Grzejdziak Ł., ‘Aleksander Maziarz, Porozumienia wertykalne w prawie konkurencji Unii Europejskiej, Wydawnictwo KUL, Lublin 2013, ss. 392 (recenzja)’ [‘Aleksander Maziarz, Vertical agreements in the competition law of the European Union, Published by KUL, Lublin 2013, ss. 392 (review)’] (2014) 1(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Gutowski P., Malaga M., ‘Rozszerzona skuteczność wyroków SOKiK w sprawach dotyczących klauzul niedozwolonych. Glosa do wyroku Sądu Najwyższego z dnia 12 lutego 2014 r., sygn. akt III SK 18/13’ [‘Expanded effectiveness of Court of Competition and Consumer Protection awards in cases pertaining to prohibited clauses. Gloss to Verdict of Supreme Court from 12th February, 2014, signature of files III SK 18/13’] (2014) 9(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Hoff W., ‘Anna Piszcz Sankcje w polskim prawie antymonopolowym’ [‘Sanctions in Polish Antimonopoly Law (review)’] (2014) 7(9) Yearbook of Antitrust and Regulatory Studies. Jurkowska-Gomułka A., ‘Bartosz Turno: Leniency. Problem łagodzenia kar pieniężnych w polskim prawie ochrony konkurencji (recenzja)’ [‘Bartosz Turno: Leniency. Problem of mitigating pecuniary penalties in Polish law of the protection of competition (review)’] (2014) 4 Państwo i Prawo.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES BIBLIOGRAPHY 2013 & 2014 295
Jurkowska-Gomułka A., ‘Dochodzenie roszczeń z tytułu naruszenia art. 101 lub art. 102 TFUE przez Komisję: podwójna rola organu antymonopolowego – glosa do wyroku TS z 6.11.2012 r. w sprawie C-199/11 Wspólnota Europejska przeciwko Otis i inni’ [‘Vindication a claim on account of violation of Art. 101 or Art. 102 of the Treaty on the Functioning of the European Union by the Commission: double role of the anti-monopoly body – gloss to the judgement of Court of Justice from 6th November, 2012, in case C-199/11 European Community v Otis and others.’] (2014) 2 Europejski Przegląd Sądowy. Jurkowska-Gomułka A., ‘Odpowiedzialność odszkodowawcza członków kartelu za szkody wynikające z efektu „parasola cenowego”. Wyrok Trybunału Sprawiedliwości z dnia 5 czerwca 2014 r. w sprawie C-557/12 Kone AG, Otis GmbH, Schindler Aufzüge und Fahrtreppen GmbH, Schindler Liegenschaftsverwaltung GmbH, ThyssenKrupp Aufzüge GmbH przeciwko ÖBB-Infrastruktur AG’ [‘Liability for damages of members of the cartel for damages resulting from the effect of the “ price umbrella”. Verdict of the Court of Justice from 5th June, 2014 in case C-557/12 Kone AG, Otis GmbH, Schindler Aufzüge und Fahrtreppen GmbH, Schindler Liegenschaftsverwaltung GmbH, ThyssenKrupp Aufzüge GmbH against ÖBB-Infrastruktur AG’] (2014) 6(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Jurkowska-Gomułka A., ‘Rekomendacje Europejskiej Sieci Konkurencji z grudnia 2013 r. – ku lepszej jakości europejskiej polityki konkurencji?’ [‘Recommendations of the European Competition Network from December 2013 – to the better quality of the European competition policy?’] (2014) 6(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Kaczyńska T., ‘Prawo odstąpienia od umowy w ustawie o prawach konsumenta na przykładzie biletów wstępu’ [‘Right to withdrawal from an agreement in Act on consumer rights consumer rights of entrance tickets’] (2014) 4(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Kadej-Barwik M., ‘Tureckie prawo ochrony konkurencji – zagadnienia wybrane’ [‘Turkish law of protection of competition – chosen issues’] (2014) 3(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Kierznowski Ł., ‘Między zmową a naśladownictwem cenowym. Glosa do wyroku Sądu Okręgowego w Warszawie – Sądu Ochrony Konkurencji i Konsumentów z 1 marca 2011 r., XVII AmA 87/09’ [‘Between the conspiracy and the price imitation. Gloss on sentence of Regional Court in Warsaw – Court of Competition and Consumer Protection from 1st March, 2011, XVII AmA 87/09’] (2014) 3(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Klimczak M., ‘First modern institutions of competition regulation – law and economics or law versus economics?’ (2014) 13(3) Ekonomia i Prawo. Kohutek K., ‘Działania organizatora rynku z perspektywy zakazu nadużywania pozycji dominującej. Wyrok Sądu Apelacyjnego w Warszawie z dnia 19 września 2013 r., VI ACa 170/13’ [‘Actions of the organizer of the market from the perspective of the ban on abusing a dominant position. Verdict of Court of Appeal in Warsaw from 19th September, 2013, VI ACa 170/13’] (2014) 1(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Kohutek K., ‘Rynek właściwy: kryteria wyznaczania, zjawisko asymetryczności rynków oraz znaczenie prawne w stosowaniu zakazów antymonopolowych – glosa do wyroku Sądu Najwyższego z 12.04.2013 r. (III SK 28/12)’ [‘Competent market: criteria of appointing,
VOL. 2015, 8(11) 296 BIBLIOGRAPHY 2013 & 2014
the phenomenon of the asymmetry of markets and legal intent in application of anti- monopoly bans – gloss to the judgement of the Supreme Court from 12th April, 2013 (III SK 28/12)’] (2014) 3 Glosa – Prawo Gospodarcze w Orzeczeniach i Komentarzach. Kolasiński M., ‘Stosowanie prawa konkurencji w odniesieniu do działalności podmiotów wykonujących zadania publiczne w oparciu o zasady solidaryzmu społecznego – różnice w polskim i unijnym podejściu’ [‘Application of the competition law as regards to activity of entities performing public duties based on principles of the social solidarity – differences in Polish and EU approach’] (2014) 6(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Korycińska P., ‘Agata Jurkowska-Gomułka Publiczne i prywatne egzekwowanie zakazów praktyk ograniczających konkurencję: w poszukiwaniu zrównoważonego modelu współistnienia (recencja)’ [‘Public and private enforcement of the prohibition of anticompetitive practices: in search of a balanced model of coexistence (review)’] (2014) 7(9) Yearbook of Antitrust and Regulatory Studies. Korycińska P., ‘Jednostronne ujawnianie informacji handlowych a zakaz porozumień ograniczających konkurencję’ [‘Unilaterally revealing of commercial information and prohibition of agreements limiting the competition’] (2014) 3(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Kostecka-Jurczyk D., ‘Środki zaradcze w procesie konsolidacji H3G-Orange, H3G-o2 i Telefónica-E-Plus przeciwdziałające monopolizacji na rynku telefonii mobilnej’ [‘Remedial measures in the process of the H3G-Orange consolidation, H3G-o2 and Telefónica-E-Plus counteracting the monopolisation on the market of the mobile telephony’] (2014) 8(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Kowalik-Bańczyk K., ‘O słuchaniu złych rad – nulla poena sine culpa w unijnym prawie konkurencji – glosa do wyroku Trybunału Sprawiedliwości z 18.06.2013 r. w sprawie C-681/11 Bundeswettbewerbsbehörde, Bundeskartellanwalt przeciwko Schenker & Co. AG i inni’ [‘About listening to wrong advices – nulla poena sine culpa in the EU law of competition – gloss to a judgement of the Court of Justice from 18th June, 2013 in case C-681/11 Bundeswettbewerbsbehörde, Bundeskartellanwalt against Schenker & Co. AG and others’] (2014) 11 Europejski Przegląd Sądowy. Kowalik-Bańczyk K., ‘Ways of Harmonising Polish Competition Law with the Competition Law of the EU’ (2014) 7(9) Yearbook of Antitrust and Regulatory Studies. Kozak M., ‘Naruszenia proceduralne przez Prezesa UOKiK (wertykalne porozumienie cenowe). Wyrok Sądu Apelacyjnego w Warszawie z dnia 16 lipca 2013 r., VI ACa 1454/12’ [‘Procedural breaches by the OCCP President (vertical price agreement). Verdict of Court of Appeal in Warsaw from 16th July, 2013, VI ACa 1454/12’] (2014) 1(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Kubiczek A., ‘Shadow economy as an example of unfair competition’ (2014) 13(3) Ekonomia i Prawo. Kukuryk P., ‘Definicje konsumenta w kodeksie cywilnym (obecnym i przyszłym) w kontekście najnowszych unijnych dyrektyw konsumenckich’ [‘Definitions of the consumer in the civil code (current and future) in the context of the newest EU consumer directives’] (2014) 5 Przegląd Prawa Handlowego. Kulawik-Dutkowska J., ‘Prawidłowe określenie statusu MŚP w kontekście korzystania z pomocy publicznej przez przedsiębiorstwa’ [‘Correct definition of SMEs status in the context of using public aid by enterprises’] (2014) 9(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny.
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Wojtaczka B., ‘O efekcie zachęty w prawie pomocy publicznej’ [‘About the effect of incentive in public aid law’] (2014) 9(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny. Wojtaszek-Mik E., ‘Informacja przedumowna w dyrektywie 2011/83/UE w sprawie praw konsumentów (problemy implementacyjne w prawie polskim)’ [‘Pre-contractual infor- mation in the directive 2011/83/EU on consumer rights (implementationproblems in Polish law)’] (2014) 4 Przegląd Prawa Handlowego. Zoll F., ‘Problem z pojęciem umowy sprzedaży w nowej ustawie o prawach konsumenta – zagadnienie umów mieszanych z obowiązkiem świadczenia usługi’ [‘Problem with term of sales agreement in new Act on Consumer Rights – issue of mixt agreements with requirement of providing services’] (2014) 4(3) internetowy Kwartalnik Antymonopolowy i Regulacyjny.
Articles (2013)
Adamczewski P., Karczewska D., ‘Pojęcie „usługi użyteczności publicznej” na tle prawa ochrony konkurencji – glosa do wyroku Sądu Najwyższego z 3.09.2009 r. (III SK 9/09)’ [‘A notion of services of general interest in a competition law – a case comment to a judgment of the Suprem Court of 3.09.2009 (III SK 9/09)’] (2013) 1 Glosa. Aziewicz D., ‘Pytanie o zasadność stosowania analizy ekonomicznej wobec minimalnych cen odsprzedaży w polskim prawie konkurencji’ [‘A question on a justification of application of economic analysis towards minimal resale prices in Polish competition law’] (2013) 3 iKAR. Bagdziński T., ‚Glosa do wyroku Sądu Apelacyjnego w Warszawie VI Wydział Cywilny z 21 kwietnia 2011 r., sygn. VI ACa 996/10’ [‘Case comment to a judgment of Court of Appeals in Warsaw of 21 April 2011, VI Aca 996/10’] (2013) 7-8 Palestra. Balicka K., ‘Odwołanie od decyzji Prezesa Urzędu Regulacji Energetyki’ [‘Appeal against decisions of the President of Energy Regulatory Office’] (2013) 6 Radca Prawny. Banasiński C., ‘Prawo dostępu do informacji w prawie antymonopolowym’ [‘A right of an access to information in antitrust law’] (2013) 21 Monitor Prawniczy. Banasińki C., ‘Kategoria korzyści jako przesłanka oceny ekwiwalentności świadczeń w stosowaniu art. 15 ust. 1 pkt 4 uznk’ [‘A category of a benefit as a prerequisite of obligations in application of Art. 15(1)(4) of the Unfair Competition Act’] (2013) 2 iKAR. Bernatt M., ‘Utrudnianie dostępu do rynku poprzez pobieranie innych niż marża handlowa opłat’ [‘Collection of charges other than commercial margins for accepting goods for sale’] (2013) 2 iKAR. Bernatt M., ‘W sprawie kontroli sądowej postępowania przed Prezesem UOKiK’ [‘On judicial control of proceeding before the President of the Office of Competition and Consumer Protection’] (2013) 3 Państwo i Prawo. Będkowski-Kozioł M., ‘Obowiązek utrzymywania zdolności urządzeń, instalacji i sieci do realizacji dostaw paliw i energii w świetle art. 4 ust. 1 ustawy. Zagadnienia wybrane’ [‘The obligation to maintain the operability of equipment, installations and grids in order to ensure the supply of fuels or energy under Article 4 Section 1 of the Polish Energy Law Act – chosen issues’] (2013) 6 iKAR. Będkowski-Kozioł M., Gołąb Ł., ‘O dogmatyce prawa transportu kolejowego. Kilka uwag w dziesiątą rocznię uchwalenia ustawy o transporcie kolejowym z 2003 r.’ [‘On the
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notion and scope of rail transport law. Some remarks on the 10th anniversary of the Polish Rail Transport Act of 2003’] (2013) 4 iKAR. Błachucki M., ‘Rozwój historyczny i cele prawa konkurencji’ [‘Historical development and objectives of competition law’] (2013) 2(12) Ekonomia i Prawo. Bolecki A., ‘Cechy szczególne franczyzy w prawie ochrony konkurencji’ [‘Particular features of franchising in competition law’] (2013) 7 iKAR. Bolecki A., ‘Ograniczenia sprzedaży przez Internet w umowach dystrybucyjnych’ [‘On-line sale restrictions in distribution agreements’] (2013) 3 iKAR. Buonocore C.I., ‘Usługi publiczne świadczone w interesie gospodarczym – między liberalizacją a ochroną interesu publicznego’ [‘Services of general economic interest – between liberalization and protection of public interest’] (2013) 1 Ius Novum. Cyndecka M., ‚O zadawaniu właściwych pytań, czyli kilka refleksji na temat dopuszczalności zastosowania kryterium (testu) prywatnego inwestora. Glosa do wyroków Sądu z dnia 15 grudnia 2009 r. w sprawie T-156/04 Électricité de France v. Komisja i Trybunału z dnia 5 czerwca 2012 r. w sprawie C-124/10 P. Komisja v. Électricité de France – obu dotyczących umorzenia wierzytelności podatkowej przez władze francuskie wobec Électricité de France (EDF)’ [‘Asking the right questions: a few reflections about the applicability of the private investor test. Case comments to the judgment of the Court in case T-156/04 Électricité de France/European Commission and to the judgment of the Court of Justice in case C-124/10 P European Commission/EDF’] (2013) 6 iKAR. Czarny-Drożdżejko E., ‘Nowelizacja ustawy o radiofonii i telewizji w zakresie dostosowania do dyrektywy europejskiej o audiowizualnych usługach medialnych (wybrane aspekty)’ [‘Amendments to Act on Radio and Television in a process of implementation of European Audiovisual Directive (selected aspects)’] (2013) 7–8 Przegląd Prawa Publicznego. Czyżak M., ‘Zmiany w zakresie odpowiedzialności karnej i karnoadministracyjnej w nowe- lizacji Prawa telekomunikacyjnego z 16.11.2012 r.’ [‘Changes regarding penal and penal- administrative liability resulting from the amendment of Telecommunications Law of 16 November 2012’] (2013) 8 iKAR. Dopierała F., ‘Kompetencja Prezesa UTK a swoboda kształtowania umów między zarządcą infrastruktury a przewoźnikiem’ [‘Competences of the railway regulator and the freedom of contract between the infrastructure manager and railway operators’] (2013) 4 iKAR. Du Cane D., ‘Obecny stan prawa w kwestii tzw. opłat półkowych – przegląd orzecznictwa’ [‘Current situation regarding slot allowances – caselaw review’] (2013) 3 Glosa. Dyl M., Stankiewicz R., ‘Przejęcie wspólnej kontroli nad przedsiębiorcą jako przesłanka zgłoszenia zamiaru koncentracji Prezesowi UOKiK’ [‘Acquisition of common control over an enterprise as a condition for notyfing an intent of concentration’] (2013) 4 Przegląd Prawa Handlowego. Elżanowski F., ‘Wokół problemów prawnych rekonstrukcji przepisów określających pojęcie podmiotu wykonującego zadania powierzone z urzędu’ [‘On the legal issues surrounding the concept of an entity executing the tasks of a statutory seller’] (2013) 6 iKAR. Fiedor B., ‘Błędy rynku a błędy państwa – regulacja rynkowa versus regulacja publiczna’ [‘Market failures and state failures – market regualtion versus state regualtion?’] (2013) 2 Ekonomista. Fornalczyk M., ‘Działalność powierzona i komercyjna spółek transportu komunalnego w Polsce’ [‘Public service obligation vs. commercial activity of Polish communal companies’] (2013) 1 iKAR.
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Fornalczyk M., ‘Ekonomiczne przesłanki opłat dodatkowych oraz zagadnienie eliminacji z rynku w działalności sieci handlowych’ [‘Economic grounds for the use of slotting fees and market elimination allegedly done by retail chains (large-format shops)’] (2013) 2 iKAR. Fornalczyk M., ‘Teckal – wyjątek, co stał się regułą’ [‘Teckal doctrine – exception which becomes rule’] (2013) 7 iKAR. Frąckowiak A., ‘Ochrona i bezpieczeństwo danych pomiarowych w kontekście projektu nowego Prawa energetycznego oraz ostatniej nowelizacji aktualnego Prawa energetycznego’ [‘Protection and safety of smart meter data in the context of the new Energy Law Act and the recent amendment to the existing Energy Law Act’] (2013) 6 iKAR. Gajdus M., Laszczyk A., ‘Kilka uwag na temat konkurencyjnosci na rynku kolejowych przewozów towarowych w Polsce’ [‘Few remarks on the competitiveness on the Polish rail freight market’] (2013) 4 iKAR. Gołąb Ł., ‘Sektor transportu kolejowego w orzecznictwie Trybunału Sprawiedliwości Unii Europejskiej’ [‘The rail transport sector in the jurisprudence of the Court of Justice of the European Union’] (2013) 4 iKAR. Hnatyszyn-Dzikowska A., ‘Konkurencja między płatnikami w opiece zdrowotnej. Ujęcie teoretyczne’ [‘Competition between payers in health care systems. A theoretical aspect’] (2013) 2 Ekonomia i Prawo. Izbicki M., ‘Ewolucja unijnej regulacji unbundlingu a projekt ustawy – Prawo energetyczne’ [‘Evolution of the EU regulation on unbundling and a draft of Energy Law’] (2013) 5 Europejski Przegląd Sądowy. Jagiełłowicz Ł., Szlagowski P., ‘Problem podwójnej reglamentacji działalności gospodarczej w zakresie wydobywania i magazynowania gazu ziemnego. Uwagi dotyczące relacji pomiędzy ustawą Prawo geologiczne i górnicze a projektowaną ustawą Prawo gazowe’ [‘Double licensing of natural gas production and storage. Remarks on the relation between the Geological and Mining Law and the draft Gas Law’] (2013) 12 Przegląd Ustawodawstwa Gospodarczego. Jankowska M., Pawełczyk M., ‘Wykładnia pojęcia „koszt energii elektrycznej” ’ na gruncie kształtowania i kalkulacji taryf oraz rozliczeń w obrocie energią elektryczną’ [‘Inter- pretation of a term ‘cost of energy’ on the basis of shaping and calculating tariffs and payments in a trade of energy’] (2013) 3 Przegląd Ustawodawstwa Gospodarczego. Jarecki Akira S., ‘Otwarcie krajowych rynków kolejowych przewozów pasażerskich na konkurencję. Zasady dostępu do infrastruktury kolejowej dla przewoźników komercyjnych i świadczących usługi publiczne’ [‘Opening the market for domestic rail passenger transport services to competition. Rules of access to infrastructure for commercial and public services’] (2013) 4 iKAR. Kamela P., ‘Interpretacja art. 15 ust. 1 pkt 4 uznk w świetle koncepcji wykładni macieja Zielińskiego’ [‘Interpretation of Article 15(1)(4) of the Combating Unfair Competition Act: applying the approach of Maciej Zieliński’] (2013) 2 iKAR. Kamińska K., ‘Wpływ ordoliberalizmu na rozwój polityki konkurencji w RFN i Unii Europejskiej’ [‘Impact of ordoliberalism on a development of competition policy in the German Federal Republic and the EU’] (2013) 2 Ekonomia i Prawo. Kaniecki G., ‘ “Opłaty półkowe” z punktu widzenia ekonomicznej analizy prawa’ [‘Slotting fees from the perspective of an economic analysis of the law’] (2013) 2 iKAR.
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Kański L., ‘Rodzaje i formy kształtowania rozliczeń między dostawcą a przedsiębiorcą handlowym w praktyce a orzecznictwo sądów’ [‘Types and forms of payments’ settlements between suppliers and commercial companies in light of jurisprudence’] (2013) 2 iKAR. Kociubiński J., ‘Regulatory challanges of airport slot allocation in the European Union’ (2013) 1(1) Wroclaw Review of Law, Administration and Economics. Kociubiński J., ‘Usługi socjalne świadczone w interesie ogólnym – prawne aspekty europeizacji państwa dobrobytu’ [‘Social services of general interest – legal aspects of europeanization of welfare state’] (2013) 6 Europejski Przegląd Sądowy. Kohutek K., ‘Antykonkurencyjny, czyli szkodliwy dla konsumentów: bliżej podejścia skutkowego w stosowaniu zakazu nadużyć wykluczających w świetle art. 102 TFUE? – glosa aprobująca do wyroku Trybunału Sprawiedliwości z 27.03.2012 r. w sprawie C-209/10 Post Danmark A/S przeciwko Konkurrencerådet’ [‘Anticompetitive means damaging for consumers: closer to a effects-based approach in applying exclusionary abuses in the light of Art. 102 TFEU – a positive case comment to a judgment of the Court of Justice of 27 March 2012 in Case C-209/10 Post Danmark A/S versus Konkurrencerådet’] (2013) 3 Glosa. Kohutek K., ‘Australijskie prawo konkurencji – zagadnienia wybrane’ [‘Australian competition law: selected issues’] (2013) 3 iKAR. Kohutek K., ‘Test prywatnego wierzyciela w unijnym prawie pomocy publicznej’ [‘Private reditor test in the EU state aid law’] (2013) 2 Gdańskie Studia prawnicze – Przegląd Orzecznictwa. Kolasiński M.K., ‘Środki zaradcze stosowane w przypadkach sprzedaży wiązanej (na tle decyzji Komisji Europejskiej’ [‘Remedies applied to binding (on the basis of decisions of the European Commission’] (2013) 3 Państwo i Prawo. Kolasiński M.K., ‘Protection of Individuals Against Competition Law Violations in the Polish Legal System’ (2013) 15 Comparative Law Review. Koralewski P., ‘Podstawy przetwarzania danych w celach marketingowych w świetle przepisów prawa telekomunikacyjnego’ [‘Foundations of data processing for marketing purposes according to telecommunication law’] (2013) 8 iKAR. Kostecka-Jurczyk D., ‘Test równie efektywnego konkurenta a test hipotetycznie dość efek- tywnego konkurenta w ocenie nożyc kosztowo-cenowych na rynku telekomunikacyjnym’ [‘An efficient competitor test and hypothetical reasonably efficient competitor test in the assessment of margin squeeze in the telecommunication sector’] (2013) 8 iKAR. Kowalik-Bańczyk K., ‘Programy łagodzenia kar (leniency) w Unii Europejskiej i w Polsce a zasada pewności prawa’ [‘Leniency in the EU and Poland and a rule of legal certainty’] (2013) 5 Przegląd Ustawodawstwa Gospodarczego. Kozik W., ‘Status Prezesa Urzędu Ochrony Konkurencji i Konsumentów w systemie organów państwa ‚ [‘Status of the President of the Office of Competition and Consumer Protection in a system of publi authorities’] (2013) 7–8 Przegląd Prawa Publicznego. Krajewska E., ‘Settlement w postępowaniu antymonopolowym – ekonomiczna analiza kosztów i korzyści z punktu widzenia przedsiębiorcy’ [‘Economic analysis of companies’ decision to settle in competition cases’] (2013) 1 iKAR. Król M., Banaszczyk T., ‘Jak lepiej wyzyskać potencjał separacji pionowej w transporcie kolejowym w Polsce?’ [‘How to best use the potential of vertical separation in Polish railway transport?’] (2013) 4 iKAR.
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Kwiatkowska Ewa M., ‘Mierzalne kryteria oceny konkurencyjności rynków telekomu- nikacyjnych. Aspekty praktyczne’ [‘Quantitative evaluation methods of competitiveness of the telecommunications markets (practical aspects)’] (2013) 8 iKAR. Laszczyk A., ‘Kolektywna pozycja dominująca na rynkach telekomunikacyjnych na przykładzie decyzji hiszpańskich organów ochrony konkurencji’ [‘Collective dominant position on telecommunications markets on the example of the case-law of Spanish competition authorities’] (2013) 3 iKAR. Lewandowski J., ‘Wpływ nowych źródeł w systemie ciepłowniczym na jego efektywność’ [‘The impact of a new CHP in a district heating system for its effectiveness’] (2013) 6 iKAR. Marciniak B., ‘Przenoszenie i dzierżawa uprawnień do częstotliwości radiowych w unijnej polityce częstotliwościowej’ [‘Transfer and lease of individual rights to use radio frequencies in the EU spectrum policy’] (2013) 8 iKAR. Materna G., ‘Antymonopolowa ocena wysokości stawek wynagrodzeń za korzystanie z utworów lub przedmiotów praw pokrewnych w świetle znowelizowanego prawa autorskiego’ [‘Antitrust assessment of an amount of tariffs for using works and objects of neighbouring rights in a light of amended Copryright Law’] (2013) 4 Przegląd Ustawodawstwa Gospodarczego. Materna G., ‘Ochrona rynku przed konkurentem działającym nielegalnie jako przesłanka oceny porozumienia w aspekcie art. 101 TFUE – glosa do wyroku TS z 7.02.2013 r. w sprawie C-68/12 Protimonopolný úrad Slovenskej republiky przeciwko Slovenská sporiteľňa a.s.’ [‘Protection of a market from a competitor acting illegally as a prerequisite of an assessment of an agreement in the light of Art. 101 TFEU – a case comment to a judgment of the Court of Justice of 7.02.2014 in Case C-68/12 Protimonopolný úrad Slovenskej republiky versus Slovenská sporiteľňa a.s.’] (2013) 9 Europejski Przegląd Sądowy. Materna G., ‘Zakres podmiotowy zakazu zmów przetargowych w polskim prawie ochrony konkurencji i prawie karnym’ [‘Personal scope of a prohibition of bid rigging in Polish competition law and criminal law’] (2013) 12 Przegląd Ustawodawstwa Gospodarczego. Materna G., ‘Zastosowanie zakazu porozumień ograniczających konkurencję do umów agencyjnych w świetle Rozporządzenia Rady Ministrów z 30 marca 2011 r.’ [‘Application of the prohibition of anticompetitive agreements to agency agreements under block exemption regulation of 30 March 2011’] (2013) 5 iKAR. Materna G., ‘Znaczenie częstotliwości naruszenia przepisów ustawy antymonopolowej przy nakładaniu kar pieniężnych – glosa do wyroku Sądu Najwyższego z 11.08.2009 r. (III SK 17/09)’ [‘Significance of frequency of infringing antitrust law in imposig a fine – a case comment to a judgment of the Supreme Court of 11.08.2009 (III SK 17/09)’] (2013) 1 Glosa. Matuszczak-Piasta J., ‘Argumenty jakościowe stosowane przy ocenie pozycji rynkowej przedsiębiorcy w postępowaniach antymonopolowych przed Prezesem UOKiK’ [‘Qualitative arguments used in the evaluation of the market position of an undertaking within antimonopoly proceedings’] (2013) 5 iKAR. Maziarz A., ‘Drapieżnictwo cenowe w unijnym prawie konkurencji’ [‘Predatory pricing in the EU competition law’] (2013) 11 Przegląd Prawa Publicznego. Maziarz A., ‘Kartele kryzysowe w unijnym prawie konkurencji’ [‘Crisis cartels in the EU competition law’] (2013) 10 Przegląd Ustawodawstwa Gospodarczego.
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Maziarz A., ‘Niehoryzontalne połączenia przedsiębiorstw w prawie konkurencji UE’ [‘Non- horizontal concentrations of enterprises in the EU competition law’] (2013) 1 Przegląd Ustawodawstwa Gospodarczego. Maziarz A., ‘Pojęcie uzgodnionej praktyki w świetle art. 101 Traktatu o funkcjonowaniu Unii Europejskiej’ [‘A notion of concerted practice in the light of Art. 101 TFEU’] (2013) 1-2 Palestra. Maziarz A., ‘Porozumienia o wymianie informacji w prawie konkurencji UE’ [‘Agreements on exchange of information in EU competition law’] (2013) 7 Przegląd Prawa Handlowego. Maziarz A., ‘Rabaty udzielane przez przedsiębiorstwa dominujące w unijnym prawie konkurencji’ [‘Rebates applied by dominating undertakings in the EU competition law’] (2013) 19 Monitor Prawniczy. Maziarz A., ‘Zasady ustalania wysokości grzywien za naruszenie unijnych reguł konkurencji’ [‘Rules for imposing fines for breaching EU competition rules’] (2013) 9 Monitor Prawniczy. Miąsik D., ‘Międzynarodowe i europejskie prawo konkurencji’ [‘International and European competition law’] (2013) 2 Studia Prawa Prywatnego. Miąsik D., ‘Rozwój polskiego prawa konkurencji i prawa antymonopolowego’ [‘Development of Polish competition law and antitrust law’] (2013) 1 Studia Prawa Prywatnego. Michałek M., ‘Szwajcarskie prawo konkurencji w zarysie’ [‘An outline of Swiss competition law’] (2013) 7 iKAR. Miruć A., Stefańska E., ‘Charakter prawny i zasady sądowej kontroli decyzji Prezesa Urzędu Regulacji Energetyki w sprawach odmowy przyłączenia do sieci – na przykładzie farm wiatrowych’ [‘Legal character and rules for judicial control of decisions of the President of Energy Regulatory Office on a refusal to connect to a network’] (2013) 14 Białostockie Studia Prawnicze. Modzelewska de Raad M., Karolczyk P., ‘ “Opłaty półkowe” – między reżimem prywatno a publicznoprawnym – polemika systemowa’ [‘ “Slotting allowances” – between the private and the public law regime – a policy debate’] (2013) 2 iKAR. Mokrysz-Olszyńska A., ‘Dyrektywa 2011/83/UE z dnia 25 października 2011 r. w sprawie praw konsumentów jako kolejny etap na drodze tworzenia jednolitych reguł konkurencji na unijnym rynku’ [‘Directive 2011/83/EU of 25 October 2011 on consumer rights as the next step towards the creation of uniform rules of competition on the EU market’] (2013) 7 iKAR. Moszyńska A., ‘Instytucjonalne ramy ochrony konkurencji w Polsce – historia i współ- czesność’ [‘Institutional framework of protecting competition in Poland – history and presence’] (2013) 2 Ekonomia i Prawo. Moszyński M., ‘Problemy teorii i polityki konkurencji w myśli ordoliberalnej’ [‘Problems of theory of competition and competition policy in ordoliberalism’] (2013) 2 Ekonomia i Prawo. Nagaj R., ‘Regulacyjna rola państwa na przykładzie polskiego rynku usług telekomu- nikacyjnych i elektroenergetyki’ (2013) 5–6 Gospodarka Narodowa. Nowaczyk P., Syp Sz., ‘Arbitraż a prawo konkurencji – wybrane zagadnienia teoretyczne i praktyczne’ [‘International commercial arbitration and competition law – selected legal issues from the perspective of an arbitrator’] (2013) 5 iKAR. Nowak B., ‘Gas system operator as an entity safeguarding the security of supply to the recipients’ (2013) 7 Przegląd Ustawodawstwa Gospodarczego.
VOL. 2015, 8(11) 308 BIBLIOGRAPHY 2013 & 2014
Ostrowski F., ‘Wprowadzanie unbundlingu własnościowego w sektorze energetycznym w drodze wydawanych przez Komisję decyzji zobowiązujących – próba oceny’ [‘The introduction of ownership unbundling in the energy sector through commitments decisions of the European Commission – evaluation attempt’] (2013) 6 iKAR. Pacewicz R., ‘Infrastruktura usługowa w Polsce i Europie – obecne problemy dostępu do niej a zmiany wynikające z koniecnzości impelmentacji dyrektywy 34/12’ [‘Railway service infrastructure in Poland and in Europe – current problems of infrastructure access and changes resulting from the duty to implement Directive 34/12’] (2013) 2 iKAR. Piątek S., ‘Obowiązki informacyjne władzy publicznej w polskim prawie telekomunikacyjnym’ [‘Information duties of public authority in Polish telecommunications law’] (2013) 21 Monitor Prawniczy. Piszcz A., ‘Grupa kapitałowa czy nie, czyli trudności z kwalifikacją i ich skutki’ [‘Is this a ‘group of companies’ or is it not? Problems of qualification and their consequences’] (2013) 3 iKAR. Piszcz A., ‘ “Pakiet” Komisji Europejskiej dotyczący powództw o odszkodowanie z tytułu naruszenia unijnych reguł konkurencji i zbiorowego dochodzenia roszczeń’ [‘Commission “package” on actions for damages based on EU competition law infringements and collective redress’] (2013) 5 iKAR. Plata-Gardas K., ‘Leniency i leniency plus w świetle propozycji zmian do ustawy o ochronie konkurencji i konsumentów’ [‘Leniency and leniency plus in proposals for amendments of Act on Competition and Consumer Protection’] (2013) 2 Przegląd Ustawodawstwa Gospodarczego. Przybylska M., ‘Sytuacja prawna przedsiębiorcy w sprawach regulacyjnych oraz antymono- polowych na etapie postępowania weryfikacyjnego’ [‘Legal situation of an undertaking in regualtory and antitrust cases on a stage of explanatory proceeding’] (2013) 5 Przegląd Ustawodawstwa Gospodarczego. Rogalski M., ‘Postępowanie przed Prezesem Urzędu Komunikacji Elektronicznej’ [‘Proceeding before the President of the Office of Electronic Communications’] (2013) 2(31) Administracja. Teoria-Dydaktyka-Praktyka. Semeniuk P., ‘Kto posiada pozycję dominującą w internecie? Uwagi o usługach interne- towych i naturze reklamy na tle polskiego i europejskiego prawa konkurencji’ [‘Who holds a dominant position in the internet? Some remarks on internet services and the nature of advertising under Polish and European competition law’] (2013) 5 iKAR. Semeniuk P., ‘ “Polskie zmowy przetargowe” – krytyka’ [‘ “Polish bid rigging” – critique’] (2013) 1 iKAR. Sieradzka M., ‘The importance of ‘‘subjective fault’’ in fixing pecuniary penalties for competition-restricting practices’ (Part I), (2013) 12 Przegląd Ustawodawstwa Gospodarczego. Sikorski R., ‘Prawo właściwe dla zobowiązań wynikających z praktyk ograniczających konkurencję w prawie UE’ [‘Law aprropriate for obligations resultig from anticompetitive practices in the EU law’] (2013) 7 Europejski Przegląd Sądowy. Siudecki J., ‘Memorandum Prezesa UKE oraz sektora telekomunikacyjnego jako instrument zapewnienia jakości usług telekomunikacyjnych’ [‘Memorandum of the President of UKE and telecommunications industry as an instrument of service quality provision’] (2013) 8 iKAR.
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Sroczyński J., ‘Rabat retroaktywny a tzw. opłata półkowa: potrzeba racjonalizacji’ [‘Ret- roactive rebates and ‘slot allowances’: the need for a rational approach’] (2013) 2 iKAR. Stabryła W., ‘Glosa do wyroku Sądu Najwyższego z dnia 5 stycznia 2011 r., sygn. III SK 32/10’ [‘Case comment to a judgment of the Supreme Court of 5 January 2011, III SK 32/10’] (2013) 1(30) Administracja. Teoria-Dydaktyka-Praktyka. Stawicki A., Kulczyk W., ‘Kwestia określoności przepisów, za naruszenie których mogą zostać nałożone kary pieniężne na przedsiębiorców. Rozważania na kanwie wyroku Sądu Najwyższego z 6 października 2011 r. w sprawie o sygn. III SK 18/11’ [‘Legal certainty of provisions, the breach of which may result in the imposition of fines on entrepreneurs – comments based on the judgment of the Polish Supreme Court of 6 October 2011 in case no. III SK 18/11’] (2013) 6 iKAR. Strugała R., ‘Merger clauses in contracts governed by Polish law’ (2013) 1(1) Wroclaw Review of Law, Administration and Economics. Strzyczkowski K., ‘Przedsiębiorstwo publiczne wobec prawa równości’ [‘Public enterprise and a right of equality’] (2013) 4 Przegląd Ustawodawstwa Gospodarczego. Supernat J., ‘Recenzja książki D. Sylwestrzak, Postępowanie przed Prezesem Urzędu Ochrony Konkurencji i Konsumentów’ [‘Review of a book by D. Sylwestrzak, Proceeding before the President of Office for Competition and Consumer Protection’] (2013) 5 Państwo i Prawo. Szpringer W., ‘Dwu- (wielo-)stronne modele e-biznesu a prawo konkurencji’ [‘Two-(multi)- sided e-business models and competition law’] (2013) 1 iKAR. Śliwa M., ‘Zarys ekonomicznej analizy polityki regulacyjnej w sektorze telekomunikacyjnym’ [‘Outline of economic analysis of regulatory policy in telecommunications industry’] (2013) 8 iKAR. Śliwińska M., ‘Ochrona konkurencji we współczesnej gospodarce wyzwaniem dla teorii konkurencji’ [‘Protection of competition in a modern economy as a challange for theory of competition’] (2013) 2 Ekonomia i Prawo. Świadek A., ‘Lokalizacja konkurenta a aktywność innowacyjna peryferyjnych systemów przemysłowych w Polsce’ [‘Localization of a competitior and innovative activity of peripherial industry systems in Poland’] (2013) 3(12) Ekonomia i Prawo. Targański B., ‚Sprzedaż aktywna i pasywna w usługach marketingu internetowego’ [‚Active and passive sales in online marketing services’] (2013) 5 iKAR. Tomaszewski M., ‘Wybrane determinanty koopetycji przedsiębiorstw przemysłowych z Polski zachodniej w latach 2009–2011’ [‘Selected determinants of co-opetition of manufacturing enterprises in the Western Poland in 2009-2011’] (2013) 3(12) Ekonomia i Prawo. Wach M., ‘Regulacje roamingu międzynarodowego – nowe możliwości czy wyzwania?’ [‘International roaming regulations – new possibilities or challenges?’] (2013) 8 iKAR. Węc P., ‘Dopuszczalność stosowania bonusów (premii pieniężnych), opustów i rabatów w świetle art. 15 ust. 1 pkt 4 uznk’ [‘Admissibility of bonuses, rebates or discounts under the provisions of Article 15(1)(4) of the Combating Unfair Competition Act’] (2013) 2 iKAR. Wieczorek Ł., ‘Zarzut przerzucania obciążeń w kontekście prywatnoprawnego wdrażania prawa konkurencji Unii Europejskiej’ [‘Pass-on defence in a context of private enforcement of the EU competition law’] (2013) 4 Przegląd Prawa Handlowego.
VOL. 2015, 8(11) 310 BIBLIOGRAPHY 2013 & 2014
Wolski D., ‘Wybrane zagadniena na tle orzeczeń dotyczących opłat za przyjęcie towaru do sprzedaży’ [‘Selected issues on slotting allowances and fees in light of existing jurisprudence’] (2013) 1 iKAR and (2013) 2 iKAR. Zajfert M., ‘Dostęp do taboru kolejowego barierą rozwoju rynku przewozów pasażerskich w Polsce’ [‘Access to rolling stock as the key barrier for market development of rail passenger services in Poland’] (2013) 4 iKAR. Ziarko Ł., ‘Jednolity europejski obszar kolejowy – tworzenie konkurencyjnej struktury sektora kolejowe w Unii Europejskiej’ [‘Single European Railway Area – creating a competitive structure in the EU railway sector’] (2013) 4 iKAR. Zielińska M., ‘Nowa ustawa Prawo pocztowe – podstawowe rozwiązania regulacyjne’ [‘New Postal Law – basic regualtory solutions’] (2013) 3 Przegląd Ustawodawstwa Gospodarczego.
ESTONIA*
Chapters in books (2014)
Bergmann, A., ‘Estonia Chapter’ [in:] Van Kerckhove M. (ed.), Pharmaceutical Antitrust 2014 (Getting the Deal Through, 2014). Frosch, T., ‘Estonia Chapter’ [in:] Newbery M., Goldberg S. (eds.), European Energy Handbook 2014 (Herbert Smith Freehills, 2014). Kaunis, I., ‘Estonia Chapter’ [in:] Cooper K. (ed.) Shipping 2014 (Getting the Deal Through, 2014). Paatsi, R., ‘Estonia Chapter’ [in:] Soltész U. (ed.), State Aid 2014 (Getting the Deal Through, 2014). Paron R., Kalaus T., ‘Estonia Chapter’ [in:] Davies J. (ed.), Merger Control 2014 (Getting the Deal Through, 2014).
Articles (2014)
Elias, S., ‘Ebaseadusliku riigiabi saaja usalduse kaitstavus riigiabi tagasinõudmise korral’ [‘Protection of Trust of a Recipient of Unlawful State Aid in Case of Recovery of State Aid’] (2014) 6 Juridica. Frolov, R., ‘Konkurentsi kahjustav teabevahetus: reeglid ja Eesti praktika’ [‘Information Exchange Restricting Competition: Rules and Estonia’s Judicial Practice’] (2014) 3 Juridica. Paas-Mohando K., Käis L., ‘Konkurentsi kahjustava kokkuleppe tühisus ja selle tagajärjed’ [Nullity of anticompetitive agreements and consequences thereof] (2014) 7 Juridica. Saar K., ‘Kas Eesti riigihangete reeglid põhjustavad konkurentsimoonutusi? Hankemenetluse otsuste vaidlustamise probleemid’ [‘Do the Rules Governing Public Procurements in Estonia Bring About a Distortion of Competition? Problems in Contestation of Deci- sions of Tendering Procedures’] (2014) 6 Juridica.
* Compiled by Dr. Alexandr Svetlicinii, University of Macau, Faculty of Law.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES BIBLIOGRAPHY 2013 & 2014 311
Svetlicinii, A., ‘Enforcement of EU Competition Rules in Estonia: Substantive Convergence and Procedural Divergence’ (2014) 7(9) YARS.
Articles (2013)
Blumfeldt E., Tamme T., ‘Estonia Chapter – Merger Control 2014’ [in:] Parr N., Hammon C. (eds.), Merger Control 2014 (International Comparative Legal Guides, 2013). Ginter C., Parrest N., Simovart, M.A., ‘Ärisaladuse kaitse ja hankelepingute avalikustamise nõue riigihankeõiguses’ [‘Requirement to Protect Business Secrets and Disclose Procurement Contracts under Procurement Law’] (2013) 9 Juridica. Härginen K., Simovart M.A., ‘Uued riigihankedirektiivid: kas revolutsioon või redaktsioon?’ [‘New Public Procurement Directives: Revolution or Redaction?’] (2013) 9 Juridica. Laarmaa K., Parre J., ‘Estonia Chapter: Public Procurement 2013’ [in:] Priess H.-J. (ed.) Public Procurement 2013 (Getting the Deal Through, 2013). Lember P., ‘Horisontaalsed eesmärgid ja hankelepingu esemega mitteseotud hindam- iskriteeriumid riigihankemenetluses’ [‘Horizontal Objectives and Evaluation Criteria not related to the Subject-matter of a Procurement Contract in Public Procurement Proceedings’] (2013) 9 Juridica. Lepasepp K., Lehtsaar P., Matjus M., ‘Estonian Competition Act amendments – something for every taste’ (July 2013) Sorainen Newsflash/Estonia, available at http://www. sorainen.com/UserFiles/File/Publications/newsflash.competition-law.2013-07-11.eng. html. Lepasepp K., Miidla M., ‘Amending the regulation of online gambling in Estonia’ (2013) World Online Gambling Law Report. Miil K., Kuusik J., Ruttu M., UPDATE: Guide to Estonian Legal System and Legal Research, Hauser Global Law School Program, New York University School of Law (October 2013), available at http://www.nyulawglobal.org/globalex/estonia1.htm. Paas-Mohando K., ‘Estonia: abuse of dominant position – wholesale magazines’ (2013) 34(1) European Competition Law Review. Paas-Mohando K., ‘Estonia: general – legislative amendment’ (2013) 34(11) European Competition Law Review. Paas-Mohando K., Kais L., ‘Current Developments in Member States: Estonia’ (2013) 9(3) European Competition Journal. Paas-Mohando K., Sild M.-K., ‘Konkurents versus regulatsioon – apteekide asutamispiirangu näitel’ [‘Competition Versus Regulation – in The Example of The Establishment Restrictions of Pharmacies’] (2013) 27 Riigikogu Toimetised. Paron R., Kalaus T., ‘Estonia Chapter – Merger Control 2014’ [in:] Davies J. (ed.), Merger Control 2014 (2013, Getting the Deal Through). Sein K., ‘Private Enforcement of Competition Law – the Case of Estonia’ (2013) 6(8) Yearbook of Antitrust and Regulatory Studies. Sein K., ‘Tarbijate õiguste kaitse Euroopa müügiõiguse eelnõus: kas kõrgem tase Eesti tarbija jaoks?’ [‘Protection of consumer rights in the draft of the European Sales Law: a step ahead for the Estonian consumers?’] (2013) 1 Juridica. Suurkivi K., ‘Hankelepingu ülevõtmine’ [‘Assumption of Procurement Contracts] (2013) 9 Juridica. Svetlicinii A., ‘The grocery retail market: is antitrust efficiency handling this market? (merger, restrictive practices, abuse of dominant position) Country Report: Estonia’,
VOL. 2015, 8(11) 312 BIBLIOGRAPHY 2013 & 2014
2013 Congress of the International League of Competition Law, 19–22 September 2013, Kiev, Ukraine, available at http://www.ligue.org/documents/2013rapportAestonien.pdf. Svetlicinii A., Lugenberg, K., ‘Merger Remedies in a Small Market Economy: Empirical Evidence from the Baltic States’ (2013) 6(1) Baltic Journal of Law & Politics. Väljaots, T., ‘Põhjendamatult madalad pakkumused riigihankeõiguses’ [‘Unreasonably Low Tenders in Procurement Law’] (2013) 9 Juridica. Viiding, M., Kallemets, K., Pikk, P., ‘Electricity Cost as a Driver of Competitiveness in Northern Europe: The Case of Estonia’ (2013) Transition Studies Review 19(3) 367–381.
SERBIA*
Books (2014)
Danković-Stepanović S., Pravo i politika konkurencije [Competition Law and Policy], University of Belgrade Faculty of Political Science, Belgrade 2014. Dobrašinović D., Matić Bošković M., Prokopijević M., Plahutnik A., Radojčić Č., Zaštita konkurencije i suzbijanje monopola [Protection of competition and prevention of monopoly], Association of Public Prosecutors of Serbia, Belgrade 2014.
Chapters in books (2014)
Popović D., ‘Zaštita konkurencije u pravu Svetske trgovinske organizacije: stanje i perspektive’ [‘Protection of competition in WTO law: state of play and future perspectives’], [in:] Radović V., Usklađivanje poslovnog prava Srbije sa pravom Evropske unije [Harmonization of Serbian business law with EU law], University of Belgrade, Faculty of Law, Belgrade 2014.
Chapters in books (2013)
Bararenko E., ‘Strategies for enhancing competitiveness of the economy as a way to ensure faster recovery from the crisis’, [in:] Hanić H. (ed.), Post crisis recovery, Belgrade Banking Academy, Belgrade 2013. Jovanović A., ‘Deregulacija, regulacija, regulatorna država i Srbija’, [in:] Vasić R., Krstić I. (ed.), Razvoj pravnog sistema Srbije i harmonizacija sa pravom EU [Development of Serbian legal system and harmonization with EU law], University of Belgrade Faculty of Law, Belgrade 2013. Maksimović Lj., ‘The influence of the European Union’s competition policy on the national competition policy’, [in:] Petrović P., Radaković M. (ed.), National and European identity in the process of European integration, Institute of International Politics and Economics, Belgrade 2013. Popović D., ‘Zabrana zloupotrebe položaja ekonomske zavisnosti u pravu konkurencije Francuske’, [in:] Nikolić O., Petrov V., Uvod u pravo Francuske [Introduction to the
* Compiled by Prof. Dušan V. Popović, University of Belgrade Faculty of Law.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES BIBLIOGRAPHY 2013 & 2014 313
French legal system], Institute of Comparative Law, and University of Belgrade, Faculty of Law, Belgrade 2013. Popović D., ‘Les interactions du droit de la concurrence français, communautaire et américain en matière de procédure négociées’, [in:] Wojtyczek K. (ed.), Journées juridiques franco-polonaises, Editions Mare & Martin, Paris 2013.
Articles (2014)
Danković-Stepanović S., ‘Reforma koncepta (zloupotrebe) dominantnog položaja tržišnog učesnika’ [‘Reform of the concept of (abuse of a) dominant position of a market participant’] (2014) (4-6) Pravo i privreda. Kostić M., ‘Testiranje granica relevantnog tržišta u politici zaštite konkurencije’ [‘Testing of the frontiers of the relevant market in the competition policy’] (2014) (1) Ekonomski horizonti. Petković M., Stanković S., ‘Politika zaštite konkurencije Republike Srbije’ [‘Protection of competition policy in Serbia’] (2014) (1) Ekonomika. Popović D., ‘Regulation of the electronic communications sector in Serbia: sector-specific rules v general competition law’ (2014) (7) Computer and Telecommunications Law Review. Popović D., ‘Pojedinačna izuzeća od zabrane restriktivnih sporazuma u pravu Srbije’ [‘Individual exemptions from the prohibition of anti-competitive agreements in Serbian law’] (2014) (4-6) Pravo i privreda. Popović D., ‘Amendments to the Serbian Competition Act: a much needed fine tuning’, (2014) (3) European Competition Law Review. Rakić I., ‘Propisi Evropske unije o kontroli koncentracija kao izvor prava u Republici Srbiji’ [‘European Union rules on merger control as a source of law in Serbia’] (2014) (67) Zbornik radova Pravnog fakulteta u Nišu. Rakić I., ‘Osvrt na pokajnički program u pravu konkurencije EU’ [‘Comments on the leniency program in the EU Competition Law’] (2014) (49/50) Evropsko zakonodavstvo. Rakić I., ‘Pokajnički program i odgovornost za štetu zbog povrede prava konkurencije’ [‘Leniency policy and responsibility for the infringement of competition rules’] (2014) (2) Anali Pravnog fakulteta u Beogradu. Uzelac O., Grujić A., ‘Novine u zakonodavnom uređenju pravne zaštite od nelojalne konkurencije u Republici Srbiji’ [‘Innovations in legislative organization of protection against unfair competition in the Republic of Serbia] (2014) (32) Anali Ekonomskog fakulteta u Subotici.
Articles (2013)
Ćurčić N., ‘Konkurentnost firme kao ishodište efikasnog sistema motivisanja zaposleni’ [‘Competitiveness of companies as a starting point efficient motivating employees’] (2013) (4) Ekonomika. Domazet S., ‘Zloupotreba dominantnog položaja kao prepreka za reindustrijalizaciju i oporavak privrede’, [‘Abuse of dominant position as a barrier to re-industrialisation and recovery of economy’] (2013) (1) Poslovna ekonomija. Domazet S., ‘Državna pomoć u EU u oblasti rudarstva, sa posebnim osvrtom na nekonkurentne rudnike uglja’ [‘State aid in the EU in the coal sector, with an emphasis on uncompetitive coal mines’] (2013) (69) Ecologica.
VOL. 2015, 8(11) 314 BIBLIOGRAPHY 2013 & 2014
Domazet S., ‘Popusti kao oblik zloupotrebe dominantnog položaja u pravu konkurencije EU’ [‘Discounts as a form of the abuse of a dominant position’] (2013) (7/9) Pravo i privreda. Galev G., ‘Slobodna konkurencija u zemljama malih ekonomija’ [‘Free competition in countries with small economies’] (2013) (12) Pravni život. Lončar D., ‘Concentration analysis on the serbian ice cream market’ [‘Analiza koncentracije na tržištu sladoleda Srbije’] (2013) (7/8) Ekonomika preduzeća. Pljakić Lj., ‘Upravno-sudska zaštita konkurencije’ [‘Protection of competition in administrative disputes’] (2013) (7/8), Pravni informator. Radovanović R., ‘Patentna zaštita i ograničenja konkurencije’ [‘Patent protection and distortions of competition’] (2013) (7/9) Pravo i privreda. Radukić S., ‘Unapređenje konkurencije i inovativnost kao faktori privrednog oporavka’ [‘Improvement of competition and innovation as factors of economic recovery’] (2013) (2) Poslovna ekonomija. Tomić Z., ‘Narušavanja konkurencije u osiguranju restriktivnim sporazumima’ [‘Distortion of competition in the area of insurance agreements’] (2013) (7/9) Pravo i privreda. Tomić Z., ‘Konkurencija i monopoli bez celovite pravne zaštite’ [‘Competition and monopolies without a comprehensive legal protection’] (2013) (3) Pravni informator. Zvezdanović M., ‘Ostvarenje konkurentske prednosti primenom vertikalnih integracija i diversifikacije’ [‘Achieve competitive adventages of vertical mergers and diversification’] (2013) (4) Ekonomika.
SLOVAKIA*
Books (2014)
Králik A., Náhrada škody spôsobenej porušením súťažného práva [Private enforcement in competition law] C.H. BECK, 2014. Lapšanský L., Ochrana hospodárskej súťaže v oblasti médií na Slovensku [Protection of competition in the area of media], Veda, 2014.
Books (2013)
Blažo O., Ochrana hospodárskej súťaže v medzinárodnom práve – nástroje zabezpečenia slobody jednotlivca [Protection of competition in international law – safeguards of the freedom of the individual] Univerzita Komenského v Bratislave, Právnická fakulta, 2013. Vozár J., Právo proti nekalej súťaži [Law against unfair competition] Veda, 2013.
* Compiled by Silvia Sramelova, lawyer, the Antimonopoly Office of the Slovak Republic, and Dr. Ondrej Blazo, Comenius University in Bratislava, Faculty of Law.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES BIBLIOGRAPHY 2013 & 2014 315
Articles (2014)
Blažo O., ‘Európske právo hospodárskej súťaže – medzi právnou teóriou a ekonomickou teóriou a prístup judikatúry‘ [‘European competition law – between the legal and economical theory and the case law approach’] (2014) Míľniky práva v stredoeurópskom priestore. Blažo O., Zemanovičová D., ‘Kartelové dohody vo verejnom obstarávaní – prečo a ako sa brániť’ [‘Bid rigging in public procurement – how and why to defend ?‘] (2014) 3–4 Verejné obstarávanie: právo a prax. Blažo O., ‘Twenty years of harmonisation and still divergent: development of Slovak competition law’ (2014) 7(9) YARS. Blažo O., ‘Vplyv európskeho práva na slovenské súťažné právo – konvergencia a divergencia’ [‘The impact of the European law on the Slovak competition law – convergence and divergence’] (2014) Zahraniční vlivy na vnitrostátní právo. Králičková B., ‘Aktuálne otázky vzťahu práva duševného vlastníctva a súťažného práva v kontexte pripravovaných legislatívnych zmien na úrovni EÚ’ [‘Current issues of private property and competition law in the context of of prepared legislative changes’] (2014) Právo duševního vlastnictví. Králičková B., ‘Ten Years in the European Union – Selected Remarks Related to Harmonization of EU Competition Law with the Slovak Competition Law’ (2014) 7(9) YARS. Králik A., ‘Ochrana profesijného tajomstva advokátov v súťažných veciach’ [‘Protection of legal professional privilege in competition cases’] (2014) 2 Antitrust. Králik A., ‘Urovnanie protimonopolných prípadov v Európskej únii a na Slovensku’ [‘Settlement of Anti-trust Cases in the European Union and in Slovakia’] (2014) 4 Justičná revue. Lapšanský L., ‘Nástroje protiprávnych zásahov orgánov verejnej moci do hospodárskej súťaže’ [‘The tools of unlawful intervention of public bodies in competition’] (2014) Míľniky súťažného práva. Nedelka M., ‘Vec AKCENTA CZ druhýkrát- tentokrát k rozpakom nad závermi SDEÚ’ [‘On the AKCENTA CZ case for the second time- this time about disillusion regarding conclusions of the CJEU’] (2014) 2 Antitrust. Šabová Z., ‘Výber z rozhodnutí slovenských súdov vo veciach ochrany hospodárskej súťaže’ [‘The decissions of the Slovak courts in matters of competition’] (2014) 1 Antitrust. Šabová Z., ‘Výber z rozhodnutí slovenských súdov vo veciach ochrany hospodárskej súťaže’ [‘The decissions of the Slovak courts in matters of competition’] (2014) 2 Antitrust. Zemanovičová D., ‘Európske súťažné pravidlá a ich vplyv na súťažnú politiku na Slovensku’ [‘European competition rules and teir impact on competition policy in the Slovak Republic’] (2014) Slovenská republika – členský štát EÚ.
Articles (2013)
Blažo O., ‘Action for annulment – sufficient measure against abuse?’ (2013) Bratislavské právnické forum, Univerzita Komenského, Právnická fakulta. Blažo O., ‘Alternatívy úpravy ochrany hospodárskej súťaže v medzinárodnom práve’ [‘Regulatory alternatives for protection of competition in international law’] (2013)
VOL. 2015, 8(11) 316 BIBLIOGRAPHY 2013 & 2014
Právna a ekonomická dimenzia slobody jednotlivca v súčasnom európskom a medziná- rodnom práve, Univerzita Komenského, Právnická fakulta. Blažo O., ‘Kolúzia, dohody a zosúladené postupy obmedzujúce hospodársku súťaž – porovnanie ekonomického a právneho pohľadu’ [‘Collusion, Agreements and Concerted Practices Restricting Competition – Comparison of Economic and Legal Approach’] (2013) Ochrana hospodárskej súťaže – právny rámec pre ekonomiku, ekonomický rámec pre právo, Univerzita Komenského v Bratislave, Právnická fakulta. Blažo O., ‘Nullum crimen, nulla poena sine lege a generálne klauzuly v prípadoch zneužitia dominantného postavenia’ [‘Nullum Crimen, Nulla Poena Sine Lege and General Clauses in Cases of Abuse of Dominant Position’] (2013) 4 Justičná revue. Blažo O., ‘Ochrana slobody jednotlivca prostredníctvom súťažného práva ako európske kultúrne dedičstvo’ [‘The protection of freedom of an individual trough the competition law as the European cultural heritage’] (2013) Míľniky práva v stredoeurópskom priestore, Univerzita Komenského, Právnická fakulta. Blažo O., ‘Pojem dohoda v súťažnom práve’ [‘Concept „Agreement“ in Competion Law’] (2013) 1 Acta Facultatis Iuridicae Universitatis Comenianae. Blažo O., ‘Recent judgements of the General Court and the Supreme Court of the Slovak Republic in inspection matters – landmark decisions or wasted opportunities to solve problem?’ (2013) 6(8) YARS. Blažo O., ‘Znaky európskeho súťažného práva v práve afrických integračných zoskupení’ [‘Features of the EU competition law in legislation of African regional economic communities’] (2013) 2 Medzinárodné vzťahy. Jurkovičová K., ‘Right to inviolability of the home – guaranteed by the Commission?’ (2013) Bratislavské právnické fórum, Univerzita Komenského, Právnická fakulta. Jurkovičová K., ‘Vertikálne dohody – skutočná hrozba pre hospodársku súťaž?’ [‘Vertical agreements- real thread for the competition?’] (2013) Míľniky práva v stredoeurópskom priestore, Univerzita Komenského, Právnická fakulta. Kalesná K., ‘Hospodárska súťaž – európske a globálne výzvy’ [‘Competition- European and Global challenges’] (2013) Bratislavské právnické fórum, Univerzita Komenského, Právnická fakulta. Králičková B., ‘Návrh smernice o kolektívnej správe práv z hľadiska optiky súťažného práva – špičkový európsky produkt alebo nepochopenie princípov hospodárskej súťaže?’ [‘Draft Directive on Collective Management of Copyright from the Competition Point of View – Top Quality European Product or Misunderstanding of the Principles of Competition?’] (2013) Ochrana hospodárskej súťaže – právny rámec pre ekonomiku, ekonomický rámec pre právo, Univerzita Komenského v Bratislave, Právnická fakulta. Králičková B., ‘Kolektívna správa práv versus súťažné právo z hľadiska najnovších snáh na úrovni Európskej únie’ [‘Collective management of rights versus competition law in the light of the latest legislative efforts at the level of the European Union’] (2013) 96(5) Právny obzor: teoretický časopis pre otázky štátu a práva. Králičková B., ‘Hranice ochrany duševného vlastníctva v súťažnom prostredí’ [‘Limits of protection of intellectual property in competition’] (2013) Hodnotový systém práva a jeho reflexia v právnej teórii a praxi, Trnavská univerzita v Trnave, Právnická fakulta. Lapšanský L., ‘Kríza a agenda poskytovania štátnej pomoci bankám: od zásadného zákazu štátnej pomoci k pretváraniu štruktúry bankového trhu’ [‘Crisis and agenda of granting state aid to banks: from the absolute prohibition of the state aid to restructuring of the financial market’] (2013) Právo, obchod, ekonomika III.: zborník vedeckých prác. UPJŠ.
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES BIBLIOGRAPHY 2013 & 2014 317
Naďová, E., ‘Prístup k leniency podkladom‘ [‘Access to Leniency Documents’] (2013) 3 Bulletin slovenskej advokácie. Oršulová A., ‘(Ne)čakaný obrat názoru Najvyššieho súdu SR na uplatnenie zásady „nullum crimen, nulla poena sine lege“ v súťažných kauzách’ [‘(Un)expected change in the Supreme Court’s opinion on the application of nullum crimen sine lege principle’] (2013) 3 Antitrust. Príkazská K., ‘Sloboda podnikania v kontexte poskytovania štátnych podpôr’ [‘Business freedom in light of state aid’] (2013) Právna a ekonomická dimenzia slobody jednotlivca v súčasnom európskom a medzinárodnom práve, Univerzita Komenského, Právnická fakulta. Šabová Z., Fodorová K., Lukáčová D. ‘Recent Developments in Slovak Competition Law – Legislation and Case Law Review’ (2013) 6(8) YARS. Šabová Z., ‘Niekoľko úvah o prioritizácii činnosti súťažných autorít’ [‘Some considerations on prioritization activity of competition authorities’] (2013) 2 Antitrust. Šabová Z., ‘Výběr z rozhodnutí slovenských súdov vo veciach ochrany hospodárskej súťaže’ [‘Selected judgments of the Slovak courts in competition law’] (2013) 2 Antitrust. Šabová Z., ‘Výběr z rozhodnutí slovenských súdov vo veciach ochrany hospodárskej súťaže’ [‘Selected judgments of the Slovak courts in competition law’] (2013) 3 Antitrust. Šabová Z., ‘Jednotná aplikácia európskeho súťažného práva v SR (analýza recentnej súdnej praxe v SR)’ [‘Uniform Application of European Competition Law in the Slovak Republic (Analysis of Recent Case Law in the Slovak Republic)’] (2013) Ochrana hospodárskej súťaže – právny rámec pre ekonomiku, ekonomický rámec pre právo Univerzita Komenského v Bratislave, Právnická fakulta. Šabová Z.: ‘Zásada nullum crimen sine lege a ukladanie sankcií v súťažnom práve’ [‘The principle of nullum crimen sine lege and sanctions in competition law’] (2013) 96(2) Právny obzor. Šramelová S., ‘The decisions of the Antimonopoly Office of the Slovak Republic and the judicial review of the decisions of the Office in the last year’ (2013) Antitrust Ročenka 2013. Šramelová S., ‘Právo na neinkrimináciu vlastnej osoby v konaniach o porušení súťažných pravidiel’ [‘The privilege against self incrimination in competition proceedings’] (2013) Ochrana hospodárskej súťaže – právny rámec pre ekonomiku, ekonomický rámec pre právo Univerzita Komenského v Bratislave, Právnická fakulta. Zemanovičová D., ‘Inštitucionálny rámec pre efektívnu aplikáciu súťažných pravidiel’ [‘Institutional Framework for Effective Application of Competition Rules’] (2013) Ochrana hospodárskej súťaže – právny rámec pre ekonomiku, ekonomický rámec pre právo Univerzita Komenského v Bratislave, Právnická fakulta. Zmij M., ‘Vymedzenie skutkovej podstaty deliktu v súťažnom práve z hľadiska zásad správneho trestania a súťažného práva Európskej únie- analýza judikatúry súdov SR’ [‘Definition of the Elements of Delict in Competition Law from the Point of View of Correct Sentencing and Competition Law of the European Union – Analysis of the Case Law of Slovak Courts’] (2013) 2 Justičná revue.
VOL. 2015, 8(11)
REVIEWERS OF YARS IN 2013 AND 2014
Prof. Hans-Peter Behrens (University of Hamburg) Prof. Josef Bejcek (University of Brno) Prof. Bożena Borkowska (Economic University of Wrocław) Dr. Maciej Etel (University of Białystok) Prof. Anna Fornalczyk (COMPER), Łódź) Prof. Rosa Greaves (University of Glasgow) Dr. Katri Havu (University of Helsinki) Marius Juonys (LAWIN, Vilnius) Doc. JUDr. Katarína Kalesná, CSc. (Comenius University, Bratislava) Prof. Konrad Kohutek (Andrzej Frycz Modrzewski Krakow University) Dr. Daria Kostecka-Jurczyk (University of Wrocław) Erika Lovásová (Slovak Antimonopoly Office) Mari Matjus (Sorainen, Tallinn) Dr. Raimundas Moisejevas (Mykolas Romeris University, Vilnius) Prof. Sofia Oliveira Pais (Catholic University of Portugal, Porto) Prof. Maria Patakyova (Comenius University, Bratislava) Dr. Petra Pipková (Charles University, Prague) Addi Rull (Tallinn University of Technology) Zuzana Šabová (Slovak Antimonopoly Office) Dr. Bartosz Turno (WKB, Warsaw)
VOL. 2015, 8(11)
ARTICLES IN YARS 2008–2014
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES VOL. 2014, 7(10)
ELSBETH BEUMER, The Interaction between EU Competition Law Procedures and Fundamental Rights Protection: the Case of the Right to Be Heard PIERLUIGI CONGEDO, The “Regulatory Authority Dixit” Defence in European Competition Law Enforcement ANTON DINEV, The Effects of Antitrust Enforcement Decisions in the EU SHUYA HAYASHI, A Study on the 2013 Amendment to the Antimonopoly Act of Japan – Procedural Fairness under the Japanese Antimonopoly Act MARIATERESA MAGGIOLINO, Plausibility, Facts and Economics in Antitrust Law MARTA MICHAŁEK, Fishing Expeditions and Subsequent Electronic Searches in the Light of the Principle of Proportionality of Inspections in Competition Law Cases in Europe KASTURI MOODALIYAR, Access to Leniency Documents: Should Cartel Leniency Applicants Pay the Price for Damages? LORENZO PACE, The Parent-subsidiary Relationship in EU Antitrust Law and the AEG Telefunken Presumption: Between the Effectiveness of Competition Law and the Protection of Fundamental Rights SOFIA OLIVEIRA PAIS, ANNA PISZCZ, Package on Actions for Damages Based on Breaches of EU Competition Rules: Can One Size Fit All? EWELINA D. SAGE, Increasing Use of “Negotiated” Instruments of European Competition Law Enforcement towards Foreign Companies KSENIYA SMYRNOVA, Enforcement of Competition Rules in the Association Agreement between the EU & Ukraine SIH YULIANA WAHYUNINGTYAS, Challenges in Combating Cartels, 14 Years after the Enactment of Indonesian Competition Law
VOL. 2015, 8(11) YEARBOOK OF ANTITRUST AND REGULATORY STUDIES VOL. 2013, 7(9)
JOSEF BEJČEK, European Courts as Value-Harmonizing “Motors of Integration” KATI CSERES, Accession to the EU’s Competition Law Regime: A Law and Governance Approach ALEXANDR SVETLICINII, Enforcement of EU Competition Rules in Estonia: Substantive Convergence and Procedural Divergence RIMANTAS ANTANAS STANIKUNAS, ARUNAS BURINSKAS, The Impact of EU Competition Rules on Lithuanian Competition Law ONDREJ BLAŽO, Twenty Years of Harmonisation and Still Divergent: Development of Slovak Competition Law BARBORA KRÁLIČKOVÁ, Ten Years in the European Union – Selected Remarks Related to the Harmonisation of Slovak Competition Law with EU Competition Law KRYSTYNA KOWALIK-BAŃCZYK, Ways of Harmonising Polish Competition Law with the Competition Law of the EU ANNA LASZCZYK, Forgotten Issues When Talking about the More Economic Approach to Competition Law in Poland PIOTR SITAREK, The Impact of EU Law on a National Competition Authority’s Leniency Programme – the Case of Poland
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES VOL. 2013, 6(8)
ALEXANDR SVETLICINII, Expanding the Definitions of ‘Undertaking’ and ‘Economic Activity’: Application of Competition Rules to the Actions of State Institutions in Bosnia and Herzegovina DUSAN POPOVIC, Competition Law Enforcement in Times of Crisis: the Case of Serbia CSONGOR ISTVÁN NAGY, A Chicago-School Island in the Ordo-liberal Sea? The Hungarian Competition Office’s Relaxed Treatment of Abuse of Dominant Position Cases MAJA BRKAN, TANJA BRATINA, Private Enforcement of Competition Law in Slovenia: A New Field to Be Developed by Slovenian Courts AGATA JURKOWSKA-GOMUŁKA, Private Enforcement of Competition Law in Polish Courts: The Story of an (Almost) Lost Hope for Development KARIN SEIN, Private Enforcement of Competition Law – the Case of Estonia
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES YEARBOOK OF ANTITRUST AND REGULATORY STUDIES VOL. 2012, 5(7)
JASMINKA PECOTIČ KAUFMAN, How to Facilitate Damage Claims? Private Enforcement of Competition Rules in Croatia – Domestic and EU Law Perspective ANNA PISZCZ, Still-unpopular Sanctions: Developments in Private Antitrust Enforcement in Poland After the 2008 White Paper ONDREJ BLAZO, What Do Limitation Periods for Sanctions in Antitrust Matters Really Limit? SILVIA ŠRAMELOVÁ, ANDREA ŠUPÁKOVÁ, Development of the Judicial Review of the Decisions of the Antimonopoly Office of the Slovak Republic DILYARA BAKHTIEVA, KAMIL KILJAŃSKI, Universal Service Obligation and Loyalty Effects: An Agent-Based Modelling Approach MAGDALENA OLENDER-SKOREK, To Regulate Or Not to Regulate? – Economic Approach to Indefeasible Right of Use (IRU)
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES VOL. 2012, 5(6)
MAŁORZATA KRÓL-BOGOMILSKA, Standards of Entrepreneur Rights in Competition Proceedings a Matter of Administrative or Criminal Law? ANNA BŁACHNIO-PARZYCH, The Nature of Responsibility of an Undertaking in Antitrust Proceedings and the Concept of ‘Criminal Charge’ in the Jurisprudence of the European Court of Human Rights ALEKSANDER STAWICKI, Competence of Common Courts in Poland in Competition Matters RAFAŁ STANKIEWICZ, The Scope of Application of the Provisions of the Administrative Procedure Code in Competition Enforcement Proceedings MACIEJ BERNATT, Can the Right To Be Heard Be Respected without Access to Information about the Proceedings? Deficiencies of National Competition Procedure PRZEMYSŁAW ROSIAK, The ne bis in idem Principle in Proceedings Related to Anti- -Competitive Agreements in EU Competition Law MATEUSZ BŁACHUCKI, SONIA JÓŹWIAK, Exchange of Information and Evidence between Competition Authorities and Entrepreneurs’ Rights INGA KAWKA, Rights of an Undertaking in Proceedings Regarding Commitment Decisions under Article 9 of Regulation No. 1/2003 BARTOSZ TURNO, AGATA ZAWŁOCKA-TURNO, Legal Professional Privilege and the Privilege Against Self-Incrimination in EU Competition Law after the Lisbon Treaty – Is It Time for a Substantial Change? KRYSTYNA KOWALIK-BAŃCZYK, Procedural Autonomy of Member States and the EU Rights of Defence in Antitrust Proceedings MARIUSZ BARAN, ADAM DONIEC, EU Courts’ Jurisdiction over and Review of Decisions Imposing Fines in EU Competition Law JAN SZCZODROWSKI, Standard of Judicial Review of Merger Decisions Concerning Oligopolistic Markets
VOL. 2015, 8(11) YEARBOOK OF ANTITRUST AND REGULATORY STUDIES VOL. 2011, 4(5)
ANNA FORNALCZYK, Competition Protection and Philip Kotler’s Strategic Recommendations ANTONI BOLECKI, Polish Antitrust Experience with Hub-and-Spoke Conspiracies MACIEJ BERNATT, The Powers of Inspection of Polish Competition Authority. The Question of Proportionality KONRAD STOLARSKI, Fines for Failure to Cooperate within Antitrust Proceedings – the Ultimate Weapon for Antitrust Authorities? ŁUKASZ GRZEJDZIAK, Mr Hoefner, Mr Elser, Please Welcome to Poland. Some Comments on the Polish Healthcare System Reform from the Perspective of State Aid Law MARLENA WACH, Polish Telecom Regulator’s Decisions Regarding Mobile Termination Rates and the Standpoint of the European Commission MICHAŁ WOLAŃSKI, Estimation of Losses Due to the Existence of Monopolies in Urban Bus Transport in Poland
YEARBOOK OF ANTITRUST AND REGULATATORY STUDIES VOL. 2011, 4(4)
ARTICLES
BARTŁOMIEJ NOWAK, Paweł Grzejszczak, Poland’s Energy Security in the Context of the EU’s Common Energy Policy. The Case of the Gas Sector ALEKSANDER STAWICKI, The Autonomy of Sector-Specific Regulation – Is It Still Worth Protecting? Further Thoughts on the Parallel Application of Competition Law and Regulatory Instruments FILIP M. ELŻANOWSKI, The Duties of the President of the Polish Energy Regulatory Office in the Context of the Implementing the Third Energy Package MARZENA CZARNECKA, TOMASZ OGŁÓDEK, The Energy Tariff System and Development of Competition in the Scope of Polish Energy Law MARIA MORDWA, The Obligation of Strategic Gas Storage Introduced in Poland as an Example of a Public Service Obligation Relating to Supply Security: A Question of Compliance with European Law MARCIN STOCZKIEWICZ, The Emission Trading Scheme in Polish law. Selected Problems Related to the Scope of Derogation from the Auctioning General Rule in Poland JANUSZ LEWANDOWSKI, Cutting Emissions in the Energy Sector: a Technological and Regulatory Perspective ANDRZEJ T. S ZABLEWSKI, The Need for Revaluation of the Model Structure for Electricity Liberalization TADEUSZ SKOCZNY, Consolidation of the Polish Electricity Sector. Perspective of Preventive Control of Concentrations
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES YEARBOOK OF ANTITRUST AND REGULATATORY STUDIES VOL. 2010, 3(3)
DAWID MIĄSIK, Solvents to the Rescue – a Historical Outline of the Impact of EU Law on the Application of Polish Competition Law by Polish Courts MARCIN KOLASIŃSKI, Influence of General Principles of Community Law on the Polish Antitrust Procedure MACIEJ BERNATT, Right to Be Heard or Protection of Confidential Information? Competing Guarantees of Procedural Fairness in Proceedings Before the Polish Competition Authority TOMASZ KOZIEŁ, Commitments decisions under the Polish Competition Act – Enforcement Practice and Future Perspectives KONRAD KOHUTEK, Impact of the New Approach to Article 102 TFEU on the Enforcement of the Polish Prohibition of Dominant Position Abuse JAROSŁAW SROCZYŃSKI, Permissibility of Exclusive Transactions:Few Remarks in the Context of Media Rights Exploitation EWELINA D. SAGE, Who Controls Polish Transmission Masts? At the Intersection of Antitrust and Regulation MARCIN KRÓL, Liberalization without a Regulator. The Rail Freight Transport Market in Poland in the Years 1996-2009
YEARBOOK OF ANTITRUST AND REGULATATORY STUDIES VOL. 2009 2(2)
OLES ANDRIYCHUK, Does Competition Matter? An Attempt of Analytical ‘Unbundling’ of Competition from Consumer Welfare ANNA FORNALCZYK, Economic Approach to Counteracting Cartels RAJMUND MOLSKI, Polish Antitrust Law in its Fight Against Cartels – Awaiting a Breakthrough PAWEŁ PODRECKI, Civil Law Actions in the Context of Competition Restricting Practices under Polish Law EWELINA RUMAK, PIOTR SITAREK, Polish Leniency Programme and its Intersection with Private Enforcement of Competition Law KATARZYNA TOSZA, Payment Card Systems as an Example of Two-sided Markets – a Challenge for Antitrust Authorities BARTŁOMIEJ NOWAK, Challenges of Liberalisation. The Case of Polish Electricity and Gas Sectors MARCIN KRÓL, Benefits and Costs of Vertical Separation in Network Industries. The Case of Railway Transport in the European Environment
VOL. 2015, 8(11) YEARBOOK OF ANTITRUST AND REGULATORY STUDIES VOL. 2008, 1(1)
ARTICLES
IAN S. FORRESTER, QC, ANTHONY DAWES, Parallel Trade in Prescription Medicines in the European Union: The Age of Reasons? DAWID MIĄSIK, Controlled Chaos with Consumer Welfare as a Winner – a Study of the Goals of Polish Antitrust Law AGATA JURKOWSKA, Antitrust Private Enforcement – Case of Poland SŁAWOMIR DUDZIK, Enforceability of Regulatory Decisions and Protection of Rights of Telecommunications Undertakings STANISŁAW PIĄTEK, Investment and Regulation in Telecommunications KRYSTYNA BOBIŃSKA, The Defense of Monopoly as a Determinant of the Process of Transformation of State-owned Infrastructure Sectors in Poland ADRIANNA ZABŁOCKA, Antitrust and Copyright Collectives – an Economic Analysis
YEARBOOK OF ANTITRUST AND REGULATORY STUDIES YEARBOOK OF ANTITRUST AND REGULATORY STUDIES Established 2008
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ARTICLES
ZURAB GVELESIANI, Need for Competition Law – Discussing the Case of Georgia RAIMUNDAS MOISEJEVAS, Development of Private Enforcement of Competition Law inbLithuania MACIEJ GAC, Individuals and the Enforcement of Competition Law – Recent Development of the Private Enforcement Doctrine in Polish and European Antitrust Law MARCIN KULESZA, Leniency – the Polish Programme and the ‘Semi- formal’ Harmonisation in the EU by the European Competition Network ORHAN M. ÇEKU, Competition Law in Kosovo: Problems and Challenges ERMAL NAZIFI, PETRINA BROKA, Review of Ten Years of Albanian Competition Law Developments EWA M. KWIATKOWSKA, Economic Determinants of Regulatory Decisions in the Polish Telecommunications Sector
CENTRE FOR ANTITRUST AND REGULATORY STUDIES (CARS) www.cars.wz.uw.edu.pl The Centre for Antitrust and Regulatory Studies, CARS (in Polish: Centrum Studiów Antymonopolowych i Regulacyjnych), of the University of Warsaw Faculty of Management, established in 2007, became starting from 1 October 2014 an independent organizational unit of the Faculty of Management to engage in teaching and research activities in the field of economics and law of antitrust and sector-specific regulations. CARS conducts cross and interdisciplinary academic research and development projects, provides consulting services as well as publishes books and periodicals, including the English language Yearbook of Antitrust and Regulatory Studies, YARS (www.yars. wz.uw.edu.pl) and the Polish language Antitrust and Regulation e-Quarterly, iKAR (in Polaish: internetowy Kwartalnik Antymonopolowy i Regulacyjny, www.ikar.wz.uw. edu.pl). Moreover, CARS organizes scientific conferences and workshops, offers Post- graduate studies (www.aris.wz.uw.edu.pl) and an Open PhD Seminar. CARS co-operates with scientific institutions in Poland and abroad as well as with the Polish competition authority and national regulators in the energy, telecommunications and railways sectors.