Activity Report at the Competition Council

2016 was a record year as regards the identification of anti-competition practices in the Romanian economy. It was also the second year in a row when the Competition Council won all trials against the companies which had sued it, the rulings being issued by the High Court of Cassation and Justice. The President of the Competition Council, Bogdan Chiriţoiu, has more, in an interview on Radio Romania:

“It was a very intense year. We’ve worked a lot and, to a certain extent, the results now reflect the effort. We carried out investigations, identified and penalised all law infringement cases and I think the results are very good. We were also successful in our cooperation with other institutions, in relation to laws, but we were not able to finalise everything we had hoped to achieve in 2016. In our effort to identify and penalise anti-competition practices, we registered a record high of finalised investigations, with 25 finalised cases in 2016, that is three times more than what we were able to achieve five-six years ago. We also registered a significant increase in the volume of our activities. It is very helpful to us now that many companies admit to their misconduct. For instance, approximately 100 of the 120 companies we have penalised have admitted to having infringed the law. This will obviously help us, as we will no longer take so many cases to court. This is a first positive aspect. Overall, our activity in court unfolded very well, as we successfully finalised the biggest case in our history, when we fined oil companies some 200 million Euros. All cases were taken to the High Court of Cassation and Justice. The Court also decided to cut the amount of some fines, so we can say that 80% of our decisions have been confirmed by the High Court of Cassation and Justice, and the money goes to the state budget. This means that 80% of the 200 million Euros, approximately 160 million Euros went to the state budget”.

How many investigations did you start in 2016 and what did you want to achieve? Bogdan Chiriţoiu:

“The number of finalised cases, started in previous years, exceeded the number of newly opened cases, that is 12. However, these 12 cases are related to very important sectors, including fabricated tenders with public money, in the wood industry, the travel agencies market, that is the activity of tour operators. I consider that the most important case is related to the activity companies operating on the insurance market. We are speaking about really big companies with an impact on the lives of all Romanians.”

The Competition Council is suspecting insurance companies in Romania of illegally exchanging information through a specialist magazine and the investigation will be completed by mid 2017. Bogdan Chiritoiu recalled that last year, the Competition Council established a ceiling for mandatory car insurances, for the first time over the past 20 years, on a theoretically free market. “We considered the turmoil on the market was high enough to justify the introduction of a ceiling,” Chiriţoiu said. According to him, the institution will analyse the effects produced by this ceiling on the market. "We expect that, after a six month period, which expires in April, things get back to normal. The market should start functioning properly by practicing decent, reasonable prices; that is not high prices, but high enough to cover the damage produced in a car accident, including car repair works and damages to the victims of an accident, both in Romania and abroad”, Bogdan Chiriţoiu explained:

“There is a series of things that should still be done, as they were not finalised in 2016. For instance, in terms of legislation, we are content with the draft emergency decree on mandatory car insurances, that we have contributed to, but obviously it will have to be discussed and approved by Parliament. Meanwhile, the six-month period during which the freeze on mandatory car insurance tariffs will expire, so we should make sure that the market will function freely but properly in the future. There is also a European directive that we haven’t managed to transpose into a piece of legislation. The text is ready. It is a directive which facilitates the action in court brought by victims of anti-competition practices. For instance, if a prejudice was brought to a company or to a citizen by a cartel, for instance, the respective company or citizen is entitled and has the opportunity to call for damages in court, based on documents, on the pieces of evidence that we, the Competition Council, have collected and also based on the decision we have made. It is one of our priorities this year to transpose the European directive into the Romanian legislation.” (Translated by D. Vijeu)