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New Draft Law on Competition: Exploring Key Amendments

New Draft Law on Competition: Exploring Key Amendments

Albania
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Competition law reform in Albania is underway, marked by several important changes to Law no. 9121, dated 28.07.2003, “On Protection of Competition” (“Competition Law”). Within the context of harmonizing with the EU acquis, last November, the Albanian Competition Authority (“ACA”) launched a public consultation phase for the proposed amendments to the Competition Law (“Draft Law”). However, the final version of the Draft Law has not yet been submitted to Parliament.

In addition to provisions regarding the appointment process of the members of the commission and the financial autonomy of ACA, the current version of the Draft Law published by ACA has introduced some noteworthy amendments, as summarized below.

  • Introducing new concepts

Some of the proposed amendments outlined in the Draft Law aim to incorporate essential concepts absent from the existing legislation yet deemed crucial for effectively implementing competition, especially within the public procurement procedures. These include:

Concerted Practice: coordination among undertakings which, without reaching the stage of concluding a formal agreement, knowingly cooperate in practice by preventing, restricting or distorting competition in the market. A concerted practice may be established by direct or indirect communication between undertakings the purpose or effect of which is to influence market behaviour or to reveal intended future behaviour to competitors.

Collusive Bidding Agreement: coordination among undertakings in public procurement procedures wherein such undertakings abstain from competitive bidding and instead, collude covertly to either inflate prices or reduce the quality of goods, services, or works. This collusion can take various forms: 

  • Covered bid:
    • competitors collectively agree to submit higher bids than that of the pre-determined winning bidder;
    • a competitor submits a bid which is so high that it cannot be accepted;
    • a competitor submits a bid that contains technical specifications unacceptable to the contracting authority.
  • Contained bid: competitors agree either not to submit bids or to withdraw previously submitted bids, ensuring that a predetermined bid, as per their agreement, will be accepted as the winning bid.
  • Rotating bid: Competitors collectively agree to submit bids and prearrange that the winner will be selected in a predetermined order.
  • Market segmentation: Competitors divide the market and agree not to compete in certain segments or geographical areas.

Invitation to Prohibited Agreement: An undertaking is prohibited from engaging in practices that encourage, obligate, motivate or in any other way invite other undertakings to participate in agreements or decisions by associations of undertakings or concerted practices with the aim of obstructing, restricting, or distorting competition.

Trade secret: encompasses information that:

  • is confidential, meaning it is not widely disseminated or easily accessible to those typically involved with similar information;
  • holds commercial value, affording the enterprise a competitive edge as long as it remains undisclosed;
  • has been submitted to reasonable measures to maintain its confidentiality, as determined by the lawful owner under the given circumstances.

 

  • Protection of confidentiality and trade secrets

The Draft Law reinforces the confidentiality obligation of ACA, mandating disclosure only upon the issuance of a final and binding court decision. This obligation encompasses information prepared by the involved parties during proceedings before ACA, information generated by ACA itself throughout its review process, as well as agreements and declarations from which the parties have withdrawn.

  • Exclusion from immunity from fines

Immunity from fines (i.e., full leniency) shall not be extended to undertakings that have undertaken actions to compel other entities to participate in a restrictive agreement or to remain parties to it.

  • New appeal deadline

The timeframe within which entities can file appeals against decisions made by ACA in court is extended from 30 to 45 days. However, departing from the current practice, entities will no longer have the right to appeal to the court concerning decisions made by ACA to initiate preliminary investigations.

  • Killer Acquisitions

The Draft Law incorporates measures to enhance oversight of concentrations, particularly focusing on identifying and addressing ‘killer acquisitions’. As per the proposed amendments, ACA will extend its scrutiny to encompass the mergers of all undertakings meeting the turnover threshold criterion within two years of the transaction’s implementation, even if they did not meet the turnover threshold at the time of concluding the agreement. While aimed at fostering a competitive market, the practical implementation of this provision lacks clarity. It remains uncertain whether the authority will provide clear instructions for its practical implementation.

  • Introduction of Statute of Limitations

Under the proposed revisions, a statute of limitations is introduced, a facet not currently addressed in the existing legislation. The Draft Law specifies a three-year time limit for cases involving violations related to information requests or inspections and a five-year limit for all other violations of the competition law. These timeframes aim to provide clear guidelines for the initiation of legal actions, promoting efficiency, clarity, and timely resolution of competition-related matters.

In summary, through the introduction of extensive amendments and innovative provisions, the Draft Law aims to address significant challenges, strengthen oversight mechanisms, and foster a fair and competitive market landscape. However, while the proposed revisions suggest positive advancements, their practical implementation and effectiveness in achieving the desired outcomes necessitate ongoing monitoring and assessment. 

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Adi Brovina, Senior Associate, and Sirius Tartari, Associate, Karanovic & Partners

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