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Competition Council president noticing over risk of consortia turning into cartels

Major competition topics in various fields have been tackled at the recent PRIA Competition conference by PRIAevents in partnership with the Competition Council, with the Competition Council president Bogdan Chiritoiu attending, next to Marcel Pandelica, president of the National Authority for Consumer Protection, Bogdan Puscas, president of the National Public Procurement Agency, Dragos Anastasiu, president AHK Romania, Anca Harasim, AmCham executive director, Cristian Erbasu, president of the Federation of Construction Employers, Mihaela Ion, managing associate at Popovici, Nitu, Stoica and Associates, Silvia Vlasceanu, executive director at the Association of the Energy Utilities Companies and Laurentiu Mihai, executive director of the Association for Generic Medicine Producers (APMGR).

As competition is a vital mechanism of the Romanian economy, the conference focused on the Competition Council’s extremely important role in ensuring a healthy competitive environment and on the fact that companies should provide consumer goods and services in the most favorable terms.

The focus was also on the fight against cartels, abuse of dominant companies in their activity sector, mergers and acquisitions, and against unfair competition.

The Competition Council president Bogdan Chiritoiu stated that consortia could lead to cartels, warning over such risk particularly in the case of public procurement bidders.

I can understand the logics of consortia among complementary companies, but we are a little bit more skeptical concerning the alliances among competing companies, which are theoretically doing the same thing. We have come up recently with a guide to direct the market in this respect and you might also see cases opened in this area in the new future. But I warn, especially the public procurement bidder, over the easiness cartels can form in this area, especially in the IT sector,” Chiritoiu stated.

The competition head also tackled important issues related to the law compelling large retailers to sell 51% of local foodstuff, voicing support for this law and arguing that Romania must not surrender on this topic despite the European Commission’s infringement procedure.

Bogdan Chiritoiu also announced that the council plans to extend the prices monitor countrywide, after a pilot project had been initiated in Bucharest in 2016-end.

ANPC head: Consumers’ complaints doubled since 2013

In his turn, Marcel Pandelica, president of the National Authority for Consumer Protection, told the PRIA conference that each of us is a consumer and we must be the direct beneficiaries of a correct policy in a healthy competition environment. He informed that the number of consumers’ complaints have doubled in the past three years, while the prejudice recoveries tripled. “If in 2013 there were about 55,000 complaints, at the end of 2016 the number has practically doubled. The complexity of these complaints has also increased, the conflicts have escalated year by year. In 2013, the recovered prejudices mounted to approximately EUR 1 M, and reached EUR 3 M in 2016,” Pandelica announced.

He also warned over the practice of the so-called product promotions, arguing that a bad commercial practice is not a mistake anymore these days, but it can turn into profit, into a real business. “For instance, if a company puts up for sale a product worth RON 10 and after a while the company launches a promotion to that product, let’s say it offers another similar product for free for one product bought and one can notice on the shelve that the price for both products is RON 11, it means that the product free of charge cost RON 1. It’s a difference that passes unnoticed, but the sums got together are making a considerable profit,” the ANPC head also pointed out.

Public procurement amending under way

ANAP president Bogdan Puscas informed that some law revisions are considered on public procurement following the market’s feedback. “By the end of the first semester of 2017 we’ll conclude a major revision, tabling a government ordinance to amend elements of the laws 98,99, 100 and 101. It would be useful to receive the amendment of all actors involved in public procurement by the end of this month, to see their solutions to how can the public procurement law chapter could be improved,” Puscas added.

AHK President warns over deficient legislation, lack of financial and law education

The AHK president Dragos Anastasiu raised some concerns over the competition problems in the tourism&transports businesses, as he is also Eurolines president.

He recounted from his own experience with competition sector, stating that there is major difference between the entrepreneurship instincts, the way businessmen interact with their competitors and the way the Competition Council is interpreting all these things.

In my view, things are more complicated in Romania than on other markets, which are more settled. In Romania, in the tourism and transports sectors the legislation is either deficient, or incomplete, or interpretable. This generates heated debates inside the guild and in terms of the relationship with the authorities. The entrepreneurship education is precarious, “ Anastasiu said, arguing that the Romanian entrepreneurs activating in tourism have scarce financial education, don’t know the legislation, while facing ethic and tax evasion issues.

The AHK president exemplified the case of a travel agency going bankrupt and causing the customers’ injury. Anastasiu argued that the Romanian state failed to enforce a European directive protecting the money paid by the customer in advance.

He opined that businessmen in every industry must read the competition laws and understand them, while advising the Competition Council to focus more on education and prevention and to also review the legislation when analyzing a certain field, arguing that “when an industry is sixes and sevens people try to set their own rules.”

The Competition Council head Chiritoiu replied that prevention is being made but it’s never enough, and the information usually fails to touch the small and medium enterprises in the country. However, Chiritoiu informed that the council has seven meetings scheduled in each development region in Romania to put the competition guides on the map.

AmCham pleads for updated commercial legislation

The AmCham representative, executive director Anca Harasim hailed the presence of three state authorities at the conference, the Competition Council, ANPC and ANAP, delivering the concerns and suggestions of the commercial chamber’s members and actors of the business environment. “From the signal we receive from the business environment and our members we consider ANPC should report itself to an updated, modern legislative framework, consistent with the reality. At present the companies are blundering into parallelisms and law contradiction in terms of consumers’ rights and into obsolete regulations that hinder very much the conformation, sometimes making it impossible. A thick legislative framework in any field is a drawback (…),” Anca Harasim said.

She expressed hope that the three bodies would work together to ‘find the blind spots of the legislation governing the commerce and to ensure a clear and easily enforceable legislative environment.’

The AmCham official concluded that updating the current commercial legislation will contribute to placing Romania on the world investment map, while assuring the three authorities attending the conference that ‘AmCham is a constructive partner open to dialogue’ to find solutions for a sustainable economy in Romania.

The Romania Journal was among the media partners of the PRIA Competition event.

About Alina Grigoras Butu