The new rules in cartel damages claims and calculation of fines for infringement of competition law5 November 2020
On 16 October 2020, the Government Emergency Ordinance no. 170/2020 on actions for damages in cases of infringements of competition law, as well as for amending and supplementing the Competition Law no. 21/1996 (the “GEO 170/2020”) was published in the Official Gazette of Romania. The GEO 170/2020 brings important changes as regards the probation of cartel damages and the calculation of fines for infringement of competition law, amending and supplementing the Competition Law no. 21/1996.
The rebuttable presumption on cartel damages of 20% increase in price became enforceable in Romania
The GEO 170/2020 transposes once again into national legislation the Directive 2014/104/EU on actions for damages in the case of infringements of competition law (the “Directive“). The previous transposition of the Directive, Government Emergency Ordinance no. 39/2017 on actions for damages in cases of infringements of competition law, as well as for amending and supplementing the Competition Law no. 21/1996 (the “GEO 39/2017”) has been found unconstitutional by the Constitutional Court by Decision no. 239 published in the Official Gazette on 23 June 2020. The Constitutional Court grounded its decision on the fact that the Government, as the initiator of the GEO 39/2017, did not comply with its obligation to request the opinion of the Economic and Social Council prior to its enactment. As concerns, the actions for damages in the case of infringements of competition law, the GEO 170/2020 took over almost entirely the provisions of the GEO 39/2017, but with major amendments on the cartel damages probation rules, which compatibility with the provisions of the Directive, we deem at least debatable.
The GEO 39/2017 already provided a rebuttable presumption that cartel infringements cause harm. Unless the infringer would have proved otherwise, rebutting this presumption, initially the quantum of the damage should have been proved by the claimant. However, the GEO 170/2020 established a new rebuttable presumption according to which the infringement of the competition law in form of cartel results in harm, consisting in an increase of 20% in the price of the goods or services covered by the cartel. The infringer can demonstrate to the satisfaction of the court that the actual loss was less than 20%, rebutting the presumption. Practically the burden of proof as regards the quantum of the damages produced by cartels has been switched from the claimant to the infringer.
The rebuttable presumption that the abuse of a dominant position results in harm has been also established
The GEO 170/2020 also establishes another rebuttable presumption according to which the abuse of a dominant position in the relevant market results in harm. The infringer can rebut such presumption by proving that no loss or damage was incurred.
The fines applied by the Romanian Competition Council (the “RCC”) for infringement of competition law will be calculated taking into account the total worldwide turnover of the infringer
According to the amendments brought by the GEO 170/2020, the fine may not exceed 10% of the total worldwide turnover achieved by the infringer in the financial year prior to the sanctioning and the minimum quantum of the fine may not be lower than 0.5% of the total amount of the revenues achieved in Romania in the financial year prior to the sanctioning.
The micro-enterprises can pay only half of the fines applied by the RCC for infringement of competition law
The GEO 170/2020 provides, as an exception in favour of micro-enterprises, the possibility to pay only half of the minimum quantum of the fine provided by the Competition Law no. 21/1996. Correlating the relevant legal provisions, we deem that this facility applies if the infringer pays half of the minimum quantum of the fine provided by the Competition Law no. 21/1996 within 15 days (as per the general provisions of Government Decision no. 2/2001 regarding the contraventions regime) as of the communication of the RCC’s decision to the infringer. However, the specific conditions for the application of such facility in favour of the micro-enterprises are not very clear, and we deem additional clarifications in this respect should be provided by the RCC in the secondary legislation.
The failure to provide information on prices requested by the RCC can be sanctioned by fines
The companies are obliged to send to the RCC, on its request, information on the selling prices of their products for performing analyses, market studies or price comparisons included in the online platforms addressed to the consumers. Failure to perform such obligation can be sanctioned be fine amounting from RON 20,000 to RON 50,000.