This article was originally published in the schoenherr roadmap`10 - if you would like to receive a complimentary copy of this publication, please visit: http://www.schoenherr.eu/roadmap.

The last amendments to Romanian Competition Law No. 21/1996 (RCL) took place in December 2003. Since then, major legal developments at the EU level have not been transposed into Romanian law. In order to close this loophole, the Romanian Competition Council (RCC) has started an initiative to harmonise national and EU competition rules.

The first draft amendments to the RCL were published on the RCC website in October 2009 to bring national competition laws on a par with EU competition rules. Major amendments have been proposed in relation to cartel prohibition and anti-trust proceedings (the Draft Amendment).

The Notification System

Anti-competitive agreements are exempted from the cartel prohibition if, in short, they produce efficiencies that countervail the negative effects on consumers. Currently, Romania still applies a notification system for anti-competitive agreements. Unlike at the EU level and in most EU member states, restrictive agreements which do not affect trade between member states may only be implemented if the agreement has been exempted individually from the cartel prohibition upon application by the implicated undertakings to the RCC (unless the respective agreement falls within the scope of one of the block exemption regulations that exempt certain categories of agreements under specific circumstances).

In practice, this system raises several difficulties. On the one hand, proceedings for individual exemption have proven to be very lengthy (sometimes taking more than a year) and quite burdensome as parties are required to produce a vast amount of information. On the other hand, one has always to consider carefully whether an agreement sufficiently affects trade between EU member states. If so, EU rules apply (which have precedence over national competition rules) and no notification is necessary. If not, the agreement may only be enforced once the RCC has granted an individual exemption. To be on the safe side, parties have therefore tended to file a notification to the RCC even in cases where an agreement could have qualified as affecting trade between member states.

Pursuant to the Draft Amendment, this notification system will be abolished and, like at the EU level, anti-competitive agreements that create countervailing pro-competitive effects will be automatically valid and enforceable with no prior decision needed to this end. In turn, it falls to the implicated undertakings to self-assess whether the respective agreement produces sufficient efficiencies.

De Minimis Agreements

Agreements fall within the scope of the cartel prohibition only if they create appreciable anti-competitive effects. EU and Romanian competition rules have adopted guidelines that set out the conditions under which an agreement is not considered to restrict competition appreciably. However, EU and national rules deviate considerably.

These differences will be set aside. According to the Draft Amendment, agreements are considered de minimis and thus permissible if the implicated undertakings have a joint market share below 10% if they are competitors, or an individual market share of 15% each if they are not competitors. (In addition, the agreements must not contain certain hard core infringements such as price fixing or market or customer allocation.)

Commitments In Proceedings

The Draft Amendment introduces the possibility for undertakings subject to an investigation into allegedly anticompetitive behaviour to offer commitments to the RCC in order to allay the competition concerns of the competition authority and bring proceedings to a speedy end without being fined.

Legal Privilege

The draft amendment introduces, for the first time, explicit provisions on the privilege of client-attorney correspondence. This is of major importance as such privileged correspondence may not be reviewed by RCC officials in investigations and also not used as evidence in proceedings.

According to the Draft Amendment this privilege will cover all correspondence between the investigated undertaking and its attorneys if it is made within the framework and for the sole purpose of defending the respective undertaking. This applies after the investigation has been kicked off, or even before, provided that such correspondence is related to the subject-matter of the investigation. In case RCC officials object to the privileged status of correspondence, such documentation is to be sealed and produced to the RCC president, who shall then decide whether the documentation may be reviewed or not.

The draft amendments to the Romanian Competition Law proposed by the Romanian Competition Council provide for welcome changes and would create one level playing field for competition rules at the EU and Romanian levels.

This article was originally published in the schoenherr roadmap`10 - if you would like to receive a complimentary copy of this publication, please visit: http://www.schoenherr.eu/roadmap.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.