Romanian Competition Council launches online whistle-blower platform

As previously hinted at in several public statements, the Romanian Competition Council (“RCC”) has launched an online platform, which enables whistle-blowers to provide essential information regarding potential cartel cases. The platform is accessible in Romanian language at the following address: http://www.consiliulconcurentei.ro/ro/despre-noi/contact/contact-ccr.html.

The online platform has been designed to ensure total anonymity, and it is not possible for public institutions to identify the whistle-blower via the new system, the RCC has explained.

The Romanian Competition Council applies first fines for breach of commitments

On 22 January 2015, the RCC announced sanctions against two companies - Avenir Telecom and Euronet Services - as well as against the Romanian Professional Football League (“LPF”),  for beaching previously undertaken commitments. This is the first time that the RCC has imposed sanctions for the breach of prior commitments. The total amount of fines exceeded EUR 156,000.

The decisions agaeinst Avenir Telecom and Euronet Service relate to RCC investigations back in 2012 dealing with alleged anticompetitive agreements between telecom operators Orange, Vodafone and Cosmote and their distributors of prepaid mobile services. At the time, the RCC ruled that existing contracts were required to be amended, in order to stimulate competition. From the RCC’s standpoint, Avenir Telecom and Euronet Services did not comply with the obligation to amend their contracts with their sub-distributors of prepaid mobile services within the deadline set up by the competition authority. According to the RCC, the breaches include contractual provisions regarding resale price maintenance of mobile services, setting up and authorising sale points of commercial partners, and imposing non-competition obligations.

As for the LPF, the RCC concluded that the football association had not complied with its commitments relating to the sale of match broadcasting rights between 2011 and 2014 by means of an open, transparent and non-discriminatory tender. In addition, the LPF had transferred certain categories of rights exclusively, although it had committed itself to transferring those rights on a non-exclusive basis.

Bogdan Chiriţoiu, president of the RCC, comments: “It is for the first time that we have imposed fines for breach of commitments. The purpose of finalizing an investigation by acceptance of commitments is the timely restoration of an effective competitive environment. Framing commitment proposals is an initiative of the undertakings involved, and any subsequent amendment of such proposals can only be made following a decision of the competition authority”.

The Romanian Competition Council accepted commitments proposed by CEZ Distribution in a case of potential abuse of dominance regarding energy theft/unrecorded energy consumption

On 14 January 2015, the RCC published its decision to accept the commitments proposed by CEZ Distribution relating to an investigation launched in 2011 by the RCC concerning a potential breach of Article 6 of the Competition Law no. 21/1996, corresponding to Article 102 TFEU.

CEZ Distribution was suspected of having committed an abuse of dominance while in a monopoly position as the incumbent energy distribution company within a specific geographical area of Romania for which it holds the distribution licence. Following suspicions of energy theft by a certain non-household energy consumer, CEZ Distribution issued two invoices representing the damages incurred in connection with the fraudulent consumption case. The consumer refused to pay the invoices and decided to change its energy supply company, switching from CEZ Vanzare SA (the supply company of the CEZ group in Romania) to another supplier, Electrica Furnizare Muntenia Nord. While a court case regarding the invoices for the alleged energy theft was pending, CEZ Distribution decided on the disconnection of the respective consumer.

Subsequently, a complaint for a possible abuse of dominance was filed by Electrica Furnizare Muntenia Nord against CEZ Distribution. The RCC raised concerns that distribution companies disconnect consumers that are suspected of energy theft without a prior court decision to confirm the fraudulent consumption. The RCC considered that by doing so, the energy supply market may be affected by restricting the access of suppliers, while consumers are deprived of an essential facility. The RCC also noted the lack of clarity and objectivity in the different stages of the disconnection process applied by CEZ Distribution, in particular, in relation to the calculation of damages and the difference in negotiation power and expertise between the distributor and its consumers.

Under its commitments accepted by the RCC, CEZ Distribution has offered to enact measures for identifying and evidencing cases of energy theft/unrecorded energy consumption (i.e. documentation of such cases using photo/video means, ordering an expert’s report, etc.) and to set up an analysis commission to regularly check compliance with technical regulations on energy consumption, in order to create a formal system to inform energy suppliers about alleged cases of energy theft/unrecorded energy consumption. CEZ Distribution further committed to adopt appropriate conciliation procedures with suppliers and non-household consumers for the compensation of costs incurred by the company in cases of energy theft/unrecorded energy consumption and to launch information campaigns concerning potential legal and practical implications as well as the importance of reporting such cases by non-household consumers.