By Order of the President of the Competition Council no. 594/2023, the instructions regarding the individualization of sanctions for the contraventions provided for in Article 4 of Law No. 11/1991 on combating unfair competition were implemented.

The purpose of these instructions is to establish the methods for individualizing sanctions in case of committing a contravention provided for in Article 4 of the law, taking into account the severity and duration of the act, as well as the procedure for granting favorable treatment to enterprises that acknowledge the commission of an act of unfair competition.

These instructions establish the method for individualizing the following contraventions:

1. Practices that constitute unfair competition and affect the public interest, as provided by Article 2 of Law No. 11/1991:

a) Denigration of a competing enterprise or its products/services, with the intention of harming its legitimate interests;

b) Diverting the clientele of a competing enterprise by a former or current employee, through the use of information that the employee had knowledge of at the time of the act, which represents trade secrets or confidential information;

c) Discrediting the activities of a competing enterprise or its products and services.

d) Speculative risk situations;

e) Exploitation of a superior negotiating position by one enterprise over another enterprise;

2. Contraventions provided by Article 4 of Law No. 11/1991:

a) Providing inaccurate, incomplete, or misleading information or incomplete provision of requested information and documents;

b) Providing information, documents, records, and evidence in an incomplete form during inspections;

c) Unjustified refusal of enterprises to comply with inspections;

d) Non-compliance with measures imposed by the Competition Council;

Sanctions are individualized by determining the base level, which is determined in relation to the severity and duration of the offense. The base level is calculated by adding x (severity) + y (duration).

To assess the severity, the nature of the offense committed, the degree of social danger posed by the offense, the intended purpose, the consequences produced, and the personal circumstances of the offender are taken into account.

Based on severity, the contraventions are divided into three categories:

a) minor severity contraventions generally include unfair competition practices that have an impact on markets/economic sectors of low importance, predominantly conducted in local markets, where the affected products/services do not fall into the category of those considered essential or related to key economic sectors;

b) medium severity contraventions are represented by acts of unfair competition such as denigration, discredit, or diversion of the clientele of a competing enterprise. These contraventions have a complex and rigorous method of execution compared to minor severity contraventions and take place in local/regional markets of significant or exceptional importance, resulting in a greater impact on the market, if quantifiable, and causing greater effects on the activities of the enterprises. Speculative actions also fall under this category.

c) high-severity contraventions. This category includes speculative actions, as stated in Article 2 (2) of the law, and contraventions similar to those described in Article 2(3) of the law when their effect significantly affects the activities of the enterprises. Additionally, this category includes unfair competition practices described in Article 2 (1) (a), (b), and (c) of the law that occurred in national markets, where their effects lead to a significant impact on the activities of the enterprise that is the passive subject of the contravention and, if applicable, other market participants.

The duration of the contraventions for the aforementioned contraventions is also divided into three categories, similar to the ones mentioned above:

a) short-duration contraventions, less than one year: no additional amount applies;

b) medium-duration contraventions, from one year to two years: Increase of up to 40% of the amount determined based on the severity of the offense;

c) long-duration contraventions, over two years: increase of the fine amount by up to 20% for each year of participation in the violation, from the amount determined based on the severity of the offense.

When individualizing fines, the Competition Council takes into account all circumstances of the case that may lead to an increase or decrease in the basic level, depending on aggravating and mitigating circumstances.

The Competition Council, for the individualization of sanctions, may also take into account the reduction of the fine in order to ensure the proportionality of the fine, the specific increase for the realization of the deterrent effect, and the reduction of the fine for the impossibility of paying and the granting of a favorable treatment to the enterprises that recognize the commission of an anti-competitive deed.

Author: Atty. Felicia Cioflan