I Introduction

Abuse of dominance within the Romanian market or in a substantial part of it is prohibited by Article 6 of the Competition Law,2 which closely resembles Article 102 of the Treaty on the Functioning of the European Union (TFEU).

The Romanian Competition Council (RCC), which is an independent administrative authority, has jurisdiction over anticompetitive practices including abuses of dominant position, and is the competent body with the power to investigate and sanction abuses. If the abuse of dominance affects intra-Community trade, the RCC will apply both Article 6 of the Competition Law and Article 102 TFEU.

The RCC has not issued formal guidance on abuses of dominance; however, the guidelines on the definition of the relevant market3 and the guidelines on the assessment of the amount of fine4 are relevant to abuse of dominance cases. The RCC includes in its decisions references to the European Commission Guidance on exclusionary abuses.

Article 6 applies also to public firms and those in which the state is the majority shareholder.

II Year in Review

Abuse of dominance cases were an important focus of the RCC in 2015, 2016 and 2017.

In 2015, the RCC closed four investigations on abuse of dominance.

In one case, it found an infringement and imposed a fine on Hewlett-Packard (HP) Romania.5 The investigation was initiated in 2012, following a complaint. The RCC concluded that between 2007 and 2011, HP Romania held a dominant position on the inkjet printer market for the business segment, with a market share of over 80 per cent. The RCC also found that HP Romania was dominant on the secondary market of printer consumables.

The RCC held that HP Romania had taken advantage of its dominant position to terminate a contract before the agreed deadline and without any explanation, which granted its partners special prices for HP supplies, which they delivered to an important client in the business segment. HP Romania cancelled the contract five months before the deadline, terminating the commercial relationships with the four partner companies and concluding a new contract with only one of the four partner companies.

The RCC held that the early termination, in absence of any objective grounds, by HP Romania of the contract with its four partner companies represented a refusal to supply HP printer consumables in breach of Article 6 of the Competition Law but not falling under the scope of Article 102 TFEU. Moreover, the RCC’s analysis led to the conclusion that HP Romania’s behaviour affected intra-brand competition for HP printer consumables in Romania and completely eliminated intra-brand competition with respect to the respective client.

At the end of 2015, the national company Posta Romana received a fine of €7.4 million.6 The fine was imposed for an alleged non-fulfilment of the non-discrimination and transparency obligations imposed as behavioural remedies in addition to the €24 million fine applied via the infringement decision adopted in 2010 in Posta Romana.7 The RCC held that Posta Romana had applied more favourable contractual conditions exclusively to one company when compared to its competitors.

In another case, the RCC rejected the complaint filed by Mailers Serv SRL against Enel Muntenia SA.8 The authority considered that the complaint concerning unfair increases of prices was ungrounded.

In addition, the RCC accepted commitments offered by the four mobile operators in Romania – Orange Romania, Vodafone Romania, Telekom Romania Mobile Communications and RCS&RDS.9 The RCC’s investigation started in 2011, in the context of which at that time, the mobile operators were charging different tariffs for the service of call termination at mobile points of the networks they operated, depending on the call origin. Each of the investigated companies offered as a commitment not to differentiate between the level of the tariff for the service of call termination at the mobile points of the network operated by each respective operator supplied to other operators at the level of the wholesale market; and the level of the tariff for service of the call termination at mobile points of the network operated by each respective operator (the service of call termination supplied to its own business for the purpose of making on-net calls on the retail market). Each of the investigated companies undertook such obligation of internal non-discrimination, for a period of two years, which can be either reduced or increased, depending on the market evolution.

Two investigations into potential abuse cases were opened in 2015 (see Table 2).

In 2016, the number of new abuse of dominance investigations increased. The RCC opened 13 new investigations, out of which five concerned potential abuses of dominance, as detailed in Table 2. Two complaints filed against the National Union of Bars10 and against the certain copyright collective societies11 were rejected.

The most noteworthy decision in 2016 was the decision concerning the administration of the maritime ports (the CNAPM case).

In CNAPM,12 the RCC fined seven operators active on the market of pilotage and manoeuvring services for ships for having concluded anticompetitive agreements impacting three maritime ports. In addition, the company responsible for the administration of the maritime ports, CNAPM, was found to infringe Article 102 TFEU and Article 6 of the Competition Law for abuse of dominant position on the maritime pilotage services market.

2017 was even more prolific as regards the number of investigations launched by the RCC. Out of the 19 investigations initiated, six cases involved alleged practices of abuse of dominance, as shown in Table 2.

According to information available in the RCC’s 2017 Annual Report,13 the authority closed two investigations for allegations of abuse of dominance without imposing fines during 2017. In one instance, the RCC accepted the commitments offered by GlaxoSmithKline (GSK) in an investigation related to the distribution of certain pharmaceutical products (the GlaxoSmithKline case).

In GlaxoSmithKline,14 the RCC investigated the pharmaceuticals producer for a potential abuse of dominance related to its distribution of Avodart and Seretide drugs. The investigation was opened in 2013, following a complaint.

The alleged abuse of dominance practices consisted in setting up, during the period from 2009 to 2012, a system of supply quotas, and refusing to supply some distributors, with the aim of restricting parallel trade; and implementing, from 1 January 2013, a new supply policy for Romania.

GSK offered commitments to address the RCC’s competition concerns. An initial version of the commitments was published on the website of the competition authority in September 2015. According to this version, GSK committed to set up a hybrid distribution system by adding two additional channels (i.e., a traditional distribution channel and an emergency channel) to its direct-to-pharmacy model. The final version of the GSK commitments accepted by the RCC has not yet been published.

The second abuse of dominance case finalised by the RCC in 2017 was related to the selling of commercial rights over football matches. The RCC closed the investigation after finding the allegations ungrounded.15

Moreover, the RCC also rejected two complaints without having opened investigations. One complaint concerned an alleged abuse of dominance by the pharmaceuticals distributor Farmexim of applying discriminatory commercial conditions,16 while the other related to allegations of abuse of dominance by companies active in the field of packaging waste management.17

Table 1: Infringement decisions issued by the RCC in 2015, 2016 and 2017

Sector

Undertaking investigated

Conduct

Fines (€)

Gas

Otto Gaz

Imposition of discriminatory tariffs

40,000

Ports

CNAPM

Imposition of commercial terms distorting competition

2.9 million

Postal services

Posta Romana

Breach of transparency and non-discrimination obligation imposed through an infringement decision

7.4 million

IT

HP Romania

Cancellation of commercial discounts

665,000

Table 2: Main cases pending before the RCC

Sector

Investigating authority

Conduct

Case opened*

Pharmaceuticals

RCC

Abusive practice of Roche Romania allegedly leading to the exclusion of a generic from the market

December 2017

Pharmaceuticals

RCC

Potential anticompetitive behaviour of Roche Romania in relation to one of its distributors by applying higher wholesale prices than the prices offered in hospital tender procedures

December 2017

E-commerce

RCC

Potential discriminatory behaviour of Dante International (eMAG) towards retailers of consumer products

December 2017

Gas

RCC

Potential discriminatory tariffs imposed by Gaz Sud for services connected to gas installations

June 2017

Energy

RCC

Potential discriminatory behaviour of E-Distributie Muntenia (formerly Enel Distributie Muntenia) towards suppliers of services connected to electricity distribution

May 2017

Gas

RCC

Potential abuse of dominance behaviour with respect to services connected to gas installations

2017

Airports

RCC

Potential refusal by International Airport of Cluj to grant access to airport infrastructure for handling services

July 2016

Pharmaceuticals

RCC

Direct distribution project to pharmacies implemented by Novartis Pharma Services Romania in parallel with traditional distribution via wholesalers

June 2016

Ports

RCC

Terms offered by Constanta Port for access to infrastructure

June 2016

Telecoms

RCC

Potential discriminatory tariffs applied by Netcity Telecom SA for access to physical infrastructure for electronic communication

May 2016

Telecoms

RCC

Potential discriminatory treatment by Orange Romania SA in relation to mobile-related services

April 2016

Gas

RCC

Potential unfair tariffs offered by Distrigaz Sud Retele for services connected to gas installations

March 2016

Gas

RCC

Potential tying by Megaconstruct SRL of gas distribution activities and installation activities

March 2016

Energy

RCC

Practices on the market of energy distribution

2015

Healthcare

RCC

Practices on the market of prelevation, processing and stocking of stem cells

2015

Media

RCC

Commercial conditions for commercialisation of TV channels by Pro TV SA

October 2014

* ‘Case opened’ refers to the year or month in which the authority opened its investigation (where known) or announced that it had opened an investigation

The cases investigated concern various sectors (including, for instance, pharmaceuticals, telecoms, transportation, gas) and a large array of potentially problematic practices, including margin squeeze, refusal to supply, refusal of access to an essential facility, and discriminating or unfair tariffs.

III Market Definition and Market Power

Under Romanian law, as under EU law, the first step in abuse of dominance is the definition of the relevant product and geographical market. The RCC’s approach to market definition and the notion of dominance is consistent with the Commission’s approach.

Market share is a key factor to the assessment of dominance. Under Romanian law, a relative presumption applies that one or more companies are in a dominant position if its market share or their market shares, respectively, exceed 40 per cent during the relevant period.

IV Abuse

i Overview

Article 6 of the Competition Law does not provide a definition of abuse, but lists examples of abusive conduct:

  1. imposing, directly or indirectly, unfair purchasing or selling prices or other unfair trading conditions;
  2. limiting production, commercialisation or technical development to the detriment of consumers;
  3. applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; and
  4. making the conclusion of a contract subject to the acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the object of such contracts.

Conduct does not infringe Article 6 of the Competition Law if it is objectively justified. This may be the case, in particular, if the conduct is objectively necessary to protect the dominant firm’s or third parties’ legitimate interests, or is because of technical limitations.18

Pending cases concern a variety of potentially problematic behaviours including refusal to deal, discrimination, leveraging or excessive pricing, as mentioned in Section II.

ii Exclusionary abuses

The RCC has dealt with exclusionary abuses in some cases; however, some important investigations are still ongoing.

A large number of investigations (including both infringement decisions in Netmaster Communications v. Vodafone,19 Netmaster Communications v. Orange20 and cases concerning rejected complaints) referred to refusal to deal. The RCC’s test for refusal to deal is similar to the test adopted by the European Commission. For instance, in Discovery v. RCS&RDS, the RCC analysed whether the refusal by the cable operator RCS&RDS to renew the contract for the retransmission of the Discovery channels amounted to an abuse of dominance. The authority concluded that Discovery had at its disposal alternative cable operators available to retransmit the channels, and that the conduct of RCS&RDS was objectively justified (including because of technical limitations and pricing considerations), and rejected the complaint.

To date, no infringement decisions concerning predation have been issued apart from the SNTR case,21 which was finalised in 2003.

iii Discrimination

Discrimination was discussed mainly in Posta Romana, Hewlett Packard and CFR Marfa.22 The issue of discriminatory pricing was assessed taking into consideration the specific circumstances of each case.

iv Exploitative abuses

A firm may abuse its dominant position if it directly or indirectly imposes unfair selling or purchasing prices. Article 6 of the Competition Law also prohibits direct or indirect imposition of unfair non-price trading conditions.

In recent years, the RCC has not issued any sanctioning decisions concerning exploitative abuses. In 2004, however, in the Kronospan case,23 the RCC held that a 50 per cent increase of the prices imposed by the firm on its trading partners immediately following the approval of a merger that created a significant position on the market qualified as an abuse.

V Remedies and Sanctions

i Sanctions

The RCC may impose on firms fines of a minimum of 0.5 per cent and up to 10 per cent of their total turnover in Romania. The fine can be set under the minimum threshold of 0.5 per cent of the total turnover only in cases where the undertaking acknowledges an infringement. However, even in such case, the level of the fine will be at least 0.2 per cent of the total turnover.

In practice, the level of fines imposed can significantly vary depending on the circumstances of the case and the duration of the practice. For instance, a fine of 7.2 per cent was applied to Posta Romana; the company that is responsible for the administration of the maritime ports (CNAPM) received a fine of 4.2 per cent; while fines of 3.6 per cent and respectively 3.45 per cent were applied to Orange Romania SA and to Vodafone Romania SA.

The concept of parental liability has not been applied.

ii Behavioural remedies

The RCC may impose behavioural remedies either as an interim measure or as a sanction imposed in its decision on the merits.

Pursuant to Article 50 of the Competition Law, in urgent cases, where there is a risk of serious and irreparable damage to competition, and a cursory evaluation of the facts reveals the existence of an anticompetitive behaviour that is expressly prohibited by law and that needs to be stopped without delay, the RCC may order interim measures. The assessment has usually been done at the request of complainants.

Based on available public information,24 the RCC has been requested to order interim measures in two abuse of dominance cases. In both cases, the RCC refused to adopt interim measures. In the Timisoara Airport case,25 the request for interim measures concerned potential changes in the application of the pricing and rebates policy applied by the airport. The case was finalised by the RCC by the adoption of commitments.26 The RCC has also refused to order interim measures in a case concerning the pharmaceutical sector.27

Pursuant to Article 46(1) of the Competition Law, the RCC may also impose specific obligations following a decision on the merits. In the Posta Romana case, in addition to the very large fines applied, the RCC also imposed non-discrimination and transparency obligations, and subsequently sanctioned the non-observance of the obligations imposed.28

iii Structural remedies

Infringement decisions can impose structural measures if proportionate to the infringement and necessary for halting the prohibited practices. According to Article 46(1) of the Competition Law, structural remedies can only be imposed when there is no behavioural remedy that would be equally effective, or in cases where a behavioural remedy would be equally effective but would be more onerous for the undertaking concerned than a corrective structural measure. To date, the RCC has never imposed structural remedies.

VI Procedure

The RCC may act on its own initiative or following complaints of third parties. The majority of the abuse of dominance cases handled in the past or currently under assessment were triggered by complaints, usually filed by either customers (e.g., larger distributors or large clients) or competitors. The RCC may also start proceedings against specific undertakings or specific practices following a general sector investigation.

The authority set up a whistleblower portal in 2015, and the online platform has been designed to ensure full anonymity. According to the latest information shared by the RCC, it received 66 messages via the platform throughout 2017, which also led to the opening of an investigation into the market for the sale of agricultural machinery, devices and equipment.

i Commencement of investigations

Usually, a decision is served upon the investigated undertaking only during an unannounced inspection. There is no legal provision requiring the RCC to serve a decision to initiate a procedure upon the parties concerned that have not been the subject of an unannounced inspection. In some cases, the decision to start proceedings is sent to investigated parties, or the RCC publicises the investigation through a press release on its website or in press interviews.

ii Legal privilege

Professional secrecy is broadly defined by the Lawyer’s Statute and covers all types of information and data, in any form and on any medium, provided by a client to a lawyer with a view and in relation to legal assistance, as well as to any documents, materials or other work product elaborated by a lawyer based on such information and data provided by his or her client.29

Additionally, to ensure professional secrecy, client–attorney work product is intangible irrespective of its physical location, and records containing client–attorney correspondence, and notes made in respect of matters related to a client’s defence, may not be taken or confiscated.30

Article 38(8) of the Competition Law also provides special rules on legal privilege in competition proceedings. In the case of unannounced inspections, to the extent that the undertaking does not prove the privileged nature of the communication, the competition inspectors will seal and lift two copies of the document in question, together with the rest of the documents gathered during the dawn raid. The investigated undertaking will be granted a term to submit evidence and explanations with a view to supporting the privileged nature of the document. The President of the Competition Council will then urgently decide, on the basis of the evidence and arguments put forth by the investigated undertaking, whether the document will be deemed privileged. Should the President decide to reject the privileged nature of the communication, the undertaking can challenge this decision before the Bucharest Court of Appeal within 15 days of the decision being communicated to the undertaking. The decision of the Bucharest Court of Appeal can be further appealed before the High Court of Cassation and Justice within five days as of communication. Unsealing can only take place after the expiry of the time period in which the decision of the President can be challenged, or, if challenged, after the court decision becomes final and irrevocable.

iii Guidance

Apart from informal contacts, there are no procedures based on which undertakings could obtain guidance on individual cases.

iv Settlements

A very detailed procedure is applicable in cases where an undertaking is willing to acknowledge an infringement in full or in part.

A simplified procedure can be applied when the acknowledgement of an infringement takes place before the investigation report (similar to the statement of objections under EU law) is communicated to the investigated parties.

The fine reduction is between 10 to 30 per cent, depending on whether the acknowledgement covers all facts included in the investigation report (full admission) or only part of the facts (partial admission), and on the moment in time when the admission is made (before or after the investigation report is communicated).

v Commitments

Firms may express their intention to offer commitments aimed at removing the RCC’s competition concerns within six month as of the moment they become aware of the opening of the investigation.

In practice, commitment decisions have become an effective enforcement tool. Out of around 20 investigations closed with commitments as of 2012, six commitment decisions concern potential abuses of dominance proceedings in the following sectors:

    1. pharmaceuticals;31
    2. mobile voice services;32
    3. energy;33
    4. airports;34
    5. financial markets;35 and
    6. gas.36

The procedure is very clearly regulated with specific deadlines for each procedural step, including the market test. In practice, commitments procedures concerning alleged abuse cases were relatively long, ranging from two years up to four years (in more complex cases) as of the opening of the investigation.

vi Appeal of RCC decisions

The decisions of the RCC may be appealed to the Court of Appeal of Bucharest and further to the High Court of Cassation and Justice. The appeal does not automatically trigger the suspension of the RCC’s decision and of the payment of the fine, but can be requested via a separate procedure subject to the payment or submission of a guarantee.

RCC decisions are subject to full judicial review. Administrative courts may also change the amount of the fine. However, they cannot increase a fine, as this would violate the non ultra petita rule. As an exception, as per Article 57(5) of the Competition Law, an undertaking that has entered into a settlement procedure loses the benefit of a fine reduction if it requests the annulment of the RCC’s decision as regards matters that have been acknowledged during the settlement procedure.

In practice, RCC’s decisions are rarely overturned by the Romanian courts.

VII Private Enforcement

In Romania, private enforcement has played a modest role until now. However, damages deriving from abuse of dominant positions may be recovered in civil courts.

The decision of the RCC issued in 2010 in Posta Romana37 has been used in the first follow-on action for damages. The follow-on action has been issued by the Court of Appeal of Bucharest.38 In December 2010, the RCC sanctioned Posta Romana with a fine of €24 million for abuse of dominance. Posta Romana was found to have favoured one of its clients in relation to standard postal services for advertising mail between 2005 and 2009 to the detriment of the complainant, Mailers Serv SRL. In addition, the RCC considered that Posta Romana granted discriminatory rebates. The High Court of Cassation and Justice upheld the RCC decision in April 2015. In the follow-on action, Mailers Serv SRL claimed damages for the difference in the tariffs (compared to the tariffs applied to the company to which Posta Romana applied more favourable terms). The Court of Appeal awarded damages to Mailers Serv SRL, which included both damnum emergens (actual damages) and lucrum cessans (loss of profits), consisting of the tariff differences not granted by Posta Romana to Mailers Serv SRL in the period from 2005 to 2009, in line with the RCC’s decision. The total damages awarded by the Court amounted to approximately €0.9 million. In November 2016, the High Court of Cassation and Justice upheld the Court of Appeal’s decision regarding the damages awarded to Mailers Serv SRL.

In June 2017, Romania also transposed the EU Directive on antitrust damages actions (Damages Directive) by means of Government Emergency Ordinance No. 39/2017 (GEO). The GEO provides for the right of any person harmed following competition law infringements by undertakings or associations of undertakings to claim full compensation before the competent courts (i.e., the Bucharest Tribunal, with an appeal before the Bucharest Court of Appeal and a subsequent appeal available before the High Court of Cassation and Justice). The GEO applies as regards violations of Article 101 or 102 TFEU, breaches of Article 101 or 102 TFEU and the national competition rules, or where only the Romanian competition rules have been breached. The right to full compensation is expressly included in the GEO, the victim of an infringement being entitled to claim damages for the actual loss, any loss of profits and the payment of interest.

The transposition of the Damages Directive should better place both natural and legal persons harmed following competition law breaches to obtain compensation. The introduction of legal presumptions shifting the burden of proof, the new rules on disclosure of evidence and the extended limitation periods together represent a step forward in encouraging victims to bring damage claims before the courts.

At the same time, as declared by the President of the RCC on several occasions, the transposition of the Damages Directive could also ease the burden of public authorities in claiming damages for the harm incurred following anticompetitive practices such as bid rigging.

VIII Future Developments

The recent enforcement trend of the RCC confirms that the authority is becoming more and more interested in the pricing behaviour of dominant undertakings: over the past few years multiple investigations have been launched or finalised in this area in various sectors (e.g., IT, telecoms and media, pharmaceuticals, ports).

Based on its draft Strategic Plan for 2017 to 2020,39 the RCC intends to focus on cartel and abuse of dominance cases, and also to use economic assessment methods for the analysis of market behaviour.

In serious abuse of dominance cases, large fines can be expected.

Dominant companies in the gas, energy, transportation and similar infrastructure sectors should expect an increased level of scrutiny.

The RCC has also reviewed a list of the 14 key sectors that will come under its focus as follows:

  1. banking;
  2. insurance;
  3. media;
  4. health;
  5. food;
  6. transportation;
  7. electronics and home appliances;
  8. information technology and communications;
  9. energy;
  10. public utilities;
  11. construction;
  12. automotive;
  13. products for personal use; and
  14. the liberal professions.

It is expected that the new legislation on private damages will help private actions brought by affected parties before the national courts become an important complement to public enforcement.

1 Livia Zamfiropol is a partner and Cătălin Graure is an associate at DLA Piper Dinu SCA.

2 Competition Law No. 21/1996.

3 Order No. 388 of 5 August 2010 for approving the Guidelines for the definition of the relevant market.

4 Order No. 694 of 11 October 2016 for approving the Guidelines for the individualisation of the sanctions for offences provided under Article 55 of the Competition Law.

5 Decision No. 62 of 2 December 2015, published in September 2017.

6 Decision No. 78 of 22 December 2015.

7 Decision No. 52 of 16 December 2010.

8 Decision No. 27 of 10 July 2015.

9 Decision No. 33 of 18 August 2015.

10 Decision No. 12 of 29 February 2016.

11 Decision No. 2 of 19 January 2016.

12 Decision No. 51 of 10 August 2016.

14 Decision not yet published.

15 Decision not yet published.

16 Decision No. 37 of 24 July 2017.

17 Decision No. 43 of 5 September 2017.

18 Decision No. 21 of 29 May 2013.

19 Decision 1 of 14 February 2011.

20 Decision 2 of 14 February 2011.

21 Decision 11 of 13 November 2003.

22 Decision No. 119 of 15 May 2006.

23 Decision No. 329 of 22 December 2004.

24 RCC decisions to refuse interim orders are not published.

25 Civil judgments upholding decisions of the RCC to refuse interim measures can be found at the following links: www.rolii.ro/hotarari/5897f50ae49009e01e000b65 and www.rolii.ro/hotarari/58ac0cc4e49009982f000245.

26 Decision No. 34 of 26 August 2014.

27 Civil judgment upholding the decision of the RCC to refuse interim measures not published yet.

28 See Section II.

29 Article 228(2) of the Lawyer’s Statute.

30 Article 35(1) and (11) of Law No. 51/1995 and Article 10(1) and (4) of the Lawyer’s Statute.

31 GlaxoSmithKline case cited above (decision not yet published).

32 Decision No. 33 of 18 August 2015.

33 Decision No. 45 of 31 October 2014.

34 Decision No. 34 of 26 August 2014.

35 Decision No. 79 of 11 December 2012.

36 Decision No. 50 of 5 September 2012.

37 Cited above.

38 Civil judgment No. 1701A of 30 October 2015, which can be found at www.rolii.ro/hotarari/
58a021c5e490094810000f70.