Q&A: enforcement of dominance rules in Slovenia

Enforcement proceedings

Which authorities are responsible for enforcement of the dominance rules and what powers of investigation do they have?

The provisions of the Slovenian Prevention of Restriction of Competition Act (the Competition Act) and EU competition law in Slovenia are enforced by the Slovenian Competition Protection Agency (the Agency).

The Agency may address a request for information to each undertaking, its partners, members of management or supervisory boards and persons employed by the undertaking. In case the Agency requests the information with a special order, an undertaking is obliged to submit all requested documents and information, but not to admit an infringement. If an undertaking, to which such an order was issued, provides incorrect, incomplete or misleading information or does not supply the requested information within the set time limit, a penalty of up to €50,000 may be imposed.

The Agency may also carry out an inspection on the premises of an undertaking, either upon consent given by the undertaking or the person whose data is being inspected or upon a court order, issued by a judge of the District court in Ljubljana upon the Agency’s proposal if there are reasonable grounds for suspicion of an infringement and the probability of finding relevant evidence with investigation exists.

The inspection is conducted by the employees of the Agency, whereby specific professional tasks may be carried out by special organisations, institutions or individuals, and with police assistance, if the undertaking obstructs the investigation or there are reasonable grounds to expect that. During the investigation, authorised persons are also empowered to:

• enter and inspect the premises (premises, land and means of transport) at the registered office of the undertaking and at other locations at which the undertaking itself or another undertaking authorised by the undertaking concerned performs the activity and business for which there is a probability of an infringement;
• examine the business books and other documentation;
• take or obtain in any form copies of or extracts from business books and other documentation;
• seal any business premises and business books and other documentation for the period and to the extent necessary for the inspection; and
• ask any representative or member of staff of the undertaking to give an oral or written explanation of facts or documents relating to the subject matter and purpose of the inspection.

A penalty amounting to up to 1 per cent of the turnover in the preceding business year on an undertaking and up to €50,000 on a natural person may be imposed in case of an obstruction of the inspection.

The Agency may also conduct the investigation on other premises, on the basis of a prior court order, if there are reasonable grounds to suspect that business books and other documentation relating to the subject matter of the inspection are being kept at the premises of an undertaking against which the procedure has not been initiated, or on the residential premises of members of the management or supervisory bodies or of staff or other associates of the undertaking against which the procedure has been initiated.

What sanctions and remedies may the authorities impose? May individuals be fined or sanctioned?

In administrative proceedings, the Agency may issue a decision finding the existence of a violation of article 6 or 9 of the Competition Act or article 101 or 102 of the Treaty on the Functioning of the European Union (TFEU) and requiring the undertaking to cease the infringement. With the same decision it may impose on the undertaking appropriate measures to remedy the violation and its consequences, in particular the divestiture of an activity or part of a company’s activities, the division of a business or the divestiture of shares in undertakings, the transfer of industrial property rights and other rights, the conclusion of licensing and other contracts that can be concluded in business between companies, providing access to the infrastructure.

Having found an infringement of competition law, the Agency may, in a separate minor offence procedure, impose a fine of up to 10 per cent of the undertaking’s annual turnover in the preceding business year. A fine ranging from €5,000 to €10,000 may be imposed on the responsible person of the legal entity or entrepreneur. If the nature of the offence is particularly severe due to the amount of the damage caused or the amount of the unlawfully obtained property proceedings or because of the perpetrator’s intent or purpose of material gain, the responsible person of the legal entity or entrepreneur may be fined from €15,000 to €30,000.

A breach of competition rules may also constitute a criminal offence under article 225 of the Slovenian Criminal Code. An individual committing such an offence may be punished by imprisonment of six months to five years.

In addition, a legal entity can be held responsible for the same criminal offence in accordance with the Liability of Legal Persons for Criminal Offences Act. A fine of at least €50,000 and up to 200 times the amount of damages caused or illegal benefit obtained through the criminal offence may be imposed on a legal entity found liable for the criminal offence.

If certain stipulated conditions are met, the winding up of a legal person and the prohibition of a specific commercial activity of not less than six months and no more than five years as a safety measure may also be ordered pursuant to provisions of the Liability of Legal Persons for Criminal Offences Act.

Can the competition enforcers impose sanctions directly or must they petition a court or other authority?

The Agency may impose sanctions directly, either through administrative proceedings, in which it may issue a decision finding an infringement and may impose remedies, or through minor offence proceedings, in which it may impose fines.

If the breach of competition rules constitutes a criminal offence, it may be prosecuted by the public prosecutor in criminal proceedings before the competent court.

What is the recent enforcement record in your jurisdiction?

On average, the Agency issues one decision concerning abuse of dominance per year, and opens at least one investigation into abusive practices annually. The average length of an abuse of dominance proceeding, from initial investigative measures to the final decision, is more than two years. However, several recent prohibition decisions have been annulled by the Administrative Court and returned to the Agency for re-examination.

In the past, the Agency has most frequently applied article 9 of the Competition Act and article 102 of the TFEU in the regulated industries, such as telecommunications and energy, as well as companies granted a statutory monopoly.

In 2020, the Agency worked on five cases concerning abuse of dominance and issued one decision concerning the e-business sector and the provision of electronic exchange of information. In 2020 and 2021 the Agency opened four investigations into potential abuses of dominance in various sectors, including energy and waste management.

Where a clause in a contract involving a dominant company is inconsistent with the legislation, is the clause (or the entire contract) invalidated?

Contracts involving abuse of dominance are only subject to general civil law as there are no provisions regarding the consequences of abuse of dominance violations on the validity of contracts in the Competition Act.

Article 86 of the Obligations Code stipulates that a contract that opposes the constitution, compulsory regulations or moral principles is null and void if the purpose of the violated rule does not imply any other sanction or if the law does not prescribe anything else in that particular case. If the conclusion of a particular contract is forbidden to only one party, the contract shall remain in force unless there is something else specified in the law for the individual case, and the party who violated the legal prohibition shall be affected by the corresponding consequences. Article 88 of the Obligations Code stipulates that, in view of the invalidity of a certain contractual provision, the contract itself is not null and void if it can stand without the null provision and if this provision was not a contractual condition and not the decisive inclination for which the contract was concluded.

To what extent is private enforcement possible? Does the legislation provide a basis for a court or other authority to order a dominant firm to grant access, supply goods or services, conclude a contract or invalidate a provision or contract?

Article 23 of the Competition Act stipulates that the Competition Protection Agency may issue a decision on initiating the proceeding ex officio when it becomes aware of circumstances from which the likelihood of a violation of the provisions of article 6 or 9 of the Competition Act or article 101 or 102 of the TFEU arises. Affected parties (competitors or customers) can file a complaint to the Agency and provide it with information of the infringement; however, the Agency is not obliged to initiate proceedings based on a complaint.

Private enforcement of competition law in Slovenia is mainly focused on damages claims where 2017 marked the transposition of the EU Damages Directive (Directive 2014/104/EU). The power of the courts to impose any behavioural remedies on the dominant firm is limited to the scope of the general provisions of the law of obligations.

Other measures to remedy the violation of competition law and its consequences, such as the divestiture of an activity or part of a company’s activities, the division of a business or the divestiture of shares in undertakings, the transfer of industrial property rights and other rights, the conclusion of licensing and other contracts and providing access to the infrastructure, can only be imposed on the undertaking by the Agency in the administrative decision finding an infringement.

Do companies harmed by abusive practices have a claim for damages? Who adjudicates claims and how are damages calculated or assessed?

In 2017, the latest amendment of the Slovenian Competition Act entered into force and transposed the EU Directive 2014/104/EU on antitrust damages actions into the Slovenian legal system.

According to article 62 of the Competition Act, a person who has suffered damage caused by a violation of competition law (the injured party) has the right to compensation for damages under the general rules of tort law. Damage claims are adjudicated by the competent district court.

Based on the general provisions of tort law and in accordance with the principle of full compensation the injured party is entitled to compensation for material damage and loss of profit. According to a specific provision of the Competition Act, the injured party is entitled to default interest from the occurrence of the damage to payment. The material damage is calculated as loss that has actually occurred. Loss of profit is calculated as the difference between the revenues the injured party would have created if there was no infringement and the costs that would have been incurred in connection with these revenues. The court may also request the Competition Protection Agency’s opinion on the determination of the amount of the damage.

In exceptional cases, when the amount of damages cannot be determined or if the determination thereof would entail unreasonable difficulties, the quantification of damages shall, according to article 216 of the Civil Procedure Act, be left to the judicial discretion. In these cases, the court may take into account the profit that was obtained by way of abuse of dominance.

To what court may authority decisions finding an abuse be appealed?

The Competition Protection Agency’s decision finding an abuse may be appealed to the Administrative Court of the Republic of Slovenia; in this judicial protection procedure the appellant cannot introduce new facts or propose new evidence. The Court reviews the Agency’s decision within the reasons stated in the appeal concerning the facts as well as the law, while ex officio reviewing certain essential procedural violations, in accordance with the Administrative Disputes Act. In certain cases, a further extraordinary legal remedy based on the points of law – revision to the Supreme Court – is possible.

Law stated date

Give the date on which the information above is accurate.

March 2020.