Competition Laws and Regulations in Albania

1. What are the main competition-related pieces of legislation in Albania?

Law no. 9121, enacted on July 28, 2003, On the protection of competition, as amended (Competition Law) supplemented by guidelines and regulations issued by the Albanian Competition Authority (ACA). 

Competition Law is broadly aligned with the provisions of the acquis, as below:

• Articles 101 and 102 of Treaty on the Functioning of the European Union.
• Council Regulation (EC) No 1/2003 of December  16, 2002, On the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.
• Council Regulation (EC) No 139/2004 of January 20, 2004, On the control of concentrations between undertakings.
• Directive (EU) 2019/1 of the European Parliament and of the Council of December 11, 2018, to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market.

2. Have there been any notable recent (last 24 months) updates of Albania competition legislation?

In November 2023, the Albanian Competition Authority presented a draft law that does not introduce entirely new legislation but rather enhances a significant part of the provisions of the current law in the institutional, procedural, and substantive parts.

Additionally, it incorporates new provisions that align with the acquis communautaire, thereby facilitating Albania’s compliance with its obligations under the Stabilization and Association Agreement and advancing its European integration process.   

The objectives and intended effects of the draft law are:

• Harmonization with the EU acquis and the implementation of EU standards in the field of competition protection, adapting to the challenges of the time and new concepts in the field of competition protection (i.e., partially approximation with (i) Council Regulation (EC) No 139/2004 of January 20, 2004 on the control of concentrations between undertakings, (ii) Directive (EU) 2016/943 of the European Parliament and of the Council of June 8, 2016 on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use, and disclosure, (iii) Council Regulation (EC) No 1/2003 of December 16, 2002, On the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, (iv) The glossary of terms used in EU competition policy: Antitrust and concentration control;
• Enhancing the authority of the ACA to ensure free and effective competition in the market, therefore, maximizing the effectiveness of competition protection;
• Guaranteeing better treatment for the preservation of confidentiality and trade secrets related to enterprises that follow procedures based on the legal framework of competition protection;
• Incorporation of a comprehensive and current legal framework, including “agreements in offers,” during public procurement procedures “killer acquisitions,” and “invitation for prohibited agreements” as the ACA competencies; reflecting the best experiences of EU countries.

3. What are the main concerns of the national competition authority in terms of agreements between undertakings? How is the sanctioning record of the authority?

The Albanian Competition Authority dedicates its primary efforts to vigilantly monitoring, conducting thorough investigations, and performing in-depth analyses within critical sectors that have a substantial impact on the well-being of Albanian consumers. These markets include the mobile phones market, building materials market (bricks, iron, cement, and concrete), procurement market, audiovisual media, as well as the milk production market and its by-products. Furthermore, the ACA assigns significant importance to the implementation of specific assessments of the conduct exhibited by companies that maintain a dominant market position by means of concession agreements.

In 2022, the ACA imposed fines amounting to a total of ALL 224,225,947 for significant breaches of Competition Law. This is the most stringent financial penalty imposed in the past five years.

Decisions rendered by the ACA are available for free on its official website.

4. Which competition law requirements should companies consider when entering into agreements concerning their activities in Albania?

When engaging in operations in Albania, companies/undertakings must abide by several competition regulations to ensure compliance with the Competition Law, which establishes the standards to safeguard fair and efficient competition in the market by outlining guidelines for the behavior of the undertakings.

The Competition Law provides constraints with regard to (a) prohibited agreements (b) abuse of the dominant position and (c) concentrations of undertakings.

(a) Prohibited agreements

Agreements are all types of accords reached between undertakings, decisions/recommendations of groupings of undertakings, as well as coordinated practices between undertakings operating at the same level (i.e., horizontal agreements) or at different levels agreements (i.e., vertical agreements) regardless of their form, written or not, or their coercive force.

Competition Law prohibits any agreement which has as its object or effect the prevention, restriction, or distortion of competition, and in particular those which:

• directly or indirectly fix purchase or selling prices, or any other trading conditions;
• limit or control production, markets, technical development, or investments;
• divide markets or sources of supply;
• apply dissimilar conditions to equivalent transactions to other trading parties, thereby placing them at a competitive disadvantage;
• agreements are conditional on the acceptance by the other contracting parties of extra obligations that, by their nature or commercial usage, are unrelated to the object of the agreement.

The prohibition stated above may be waived in the case of agreements that contribute to improving the production or distribution of products, or to promoting technological or economic progress. In such cases, customers or consumers shall receive a sufficient portion of the benefits, and the agreement (i) should not impose restrictions on the activities of participating undertakings that are not necessary to achieve the aforementioned objectives; and (ii) should not significantly restrict competition regarding the products or services that are the subject of these agreements.

(b) Abuse of the dominant position

A dominant position is defined by the Competition Law as the economic power held by one or more undertakings, which enables them to hinder effective competition in the market, making them capable of acting, in terms of supply or demand, independently of other market participants such as competitors, customers, or consumers.

Any abuse by one or more undertakings of a dominant position in the market is prohibited. Such abuse may, in particular, consist in:

• directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
• limiting production, markets, or technical development;
• applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
• prerequisites for entering into contracts with third parties, such that the latter accept additional that is not pertinent to the subject matter of the contracts at hand, either by definition or in accordance with commercial customs.

(c) Concentrations of undertakings

A concentration shall be deemed to arise where a change of control on a lasting basis results from:

• the merger of two or more independent undertakings or parts of undertakings;
• the acquisition, by one or more persons already controlling at least one undertaking, or by one or more undertakings, whether by the purchase of shares or assets, by contract or by any other means, of direct or indirect control of the whole or parts of one or more other undertakings; or
• direct or indirect control over one or more undertakings or part of the latter.

Control shall be constituted by rights, contracts, or any other means which, either separately or in combination and having regard to the considerations of fact or law involved, confer the possibility of exercising decisive influence on an undertaking, particularly by (i) ownership or the right to use all or part of the assets of an undertaking and (ii) rights or contracts which confer decisive influence on the composition, voting, or decisions of the organs of an undertaking.

The merger control applies to mergers when all of the following turnover thresholds are met:

• combined worldwide turnover of all parties exceeds ALL 7 billion and domestic turnover of at least one party exceeds ALL 200 million OR; or
• combined domestic turnover of all parties exceeds ALL 400 million and domestic turnover of at least one party exceeds ALL 200 million.

5. Does a leniency policy apply in Albania?

According to the Competition Law and Regulation on Fines and Leniency, the  may grant full or partial leniency, if an undertaking assists in the identification and prohibition of the prohibited agreement as well as in the identification of the responsible parties through the provision of evidence and data not previously obtained by the authority, that enable the latter to (i) initiate an investigation regarding a prohibited agreement or (ii) discover a violation related to a prohibited agreement.

Full leniency may be granted to the first company that provides the ACA information in relation to the identification and prevention of a cartel, the identification of the responsible persons, and submits new evidence for which the ACA was not aware, enabling the latter to initiate an investigation in relation to a prohibited agreement and to identify such violation of Competition Law.

In order to benefit from the full leniency a company should provide to the ACA:

• A copy of the prohibited agreement, or a description of such agreement including the subject; the products; the relevant market; the duration; the signing date; the location; and any other detail that may help the ACA;
• the names and addresses of the companies/parties in the agreement; and
• the name and address of the premises of the business and, if necessary, the names of the persons involved in such prohibited agreement.

Furthermore, the company should:

• be available to answer the questions of the ACA;
• not destroy, falsify, or alter the relevant information in relation to the prohibited agreements; and
• provide any other information related to the prohibited agreement.

Companies that fail to satisfy the criteria for receiving full leniency may be granted partial leniency in exchange for submitting evidence to the ACA regarding the alleged infringement which represents significant added value to the evidence already in the possession of the ACA.

The level of leniency may be (i) for the first company: 30-50% of the fine (ii) for the second company: 20-30% of the fine; and (iii) for the following companies: up to 20% of the fine.

To be eligible for the leniency program, companies must consistently comply with the Authority during the inquiry and refrain from engaging in prohibited agreements once they start submitting information to the ACA. No leniency is accorded when information is submitted after the investigation has been closed.

6. How is unilateral conduct treated under Albanian competition rules?

A dominant position is not prohibited per se but rather the abuse of such a dominant position. The Competition Law recognizes the existence of single (where one undertaking is involved) and collective (where several more undertakings are involved) dominant positions.

As in Section 4, a dominant position is defined as the economic power held by one or more undertakings, which enables them to hinder effective competition in the market, making them capable of acting, in terms of supply or demand, independently of other market participants such as competitors, customers, or consumers.

Such abuse may, in particular, consist in:

• directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
• limiting production, markets, or technical development;
• applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
• prerequisites for entering into contracts with third parties, such that the latter accept additional that is not pertinent to the subject matter of the contracts at hand, either by definition or in accordance with commercial customs.

When assessing the dominant position of one or more undertakings, various factors are considered:

• the relevant market shares of the undertaking or undertakings in question and those of other competitors;
• barriers to entry in the relevant market;
• potential competition;
• the economic and financial capacity of the undertakings;
• economic dependence of suppliers and buyers;
• the countervailing power of buyers;
• the development of the distribution network of the undertaking and the opportunities to use the product resources;
• economic links with other undertakings;
• other relevant market characteristics such as product homogeneity, market transparency, the undertaking’s cost and size uniformity, demand stability, or free production capacity.

The Guideline on the Dominant Position issued by the ACA provides some of the forms of the abuse of the dominant price squeezing position inter alia predatory pricing, exclusive agreements, market restrictions, and price squeezing.

The Guideline on the Dominant Position, issued by ACA, delineates various ways in which dominant positions can be abused. These include predatory pricing, whereby one or more undertakings set prices below the cost of production to drive competitors out of the market, ensuring high future profits; exclusive agreements in which the contractor is obligated to sell solely the products or services provided by the provider; market restriction exists whereby the supplier of products or services mandates that the vendor offer those items or services exclusively within a specified market; and price squeezing, where a dominant enterprise that is vertically integrated imposes unjustifiable prices on suppliers with whom it can conduct business through a subsidiary.

7. Are there any recent local abuse cases of relevance?

A record-breaking 99 decisions were rendered by the Competition Commission in 2022, the most in the seventeen-year history of the ACA. Also, during this year, 15 monitorings were carried out in sensitive markets with a direct impact on the well-being of the consumer, and 11 investigative procedures were carried out, namely: in the wholesale market of diesel fuel and gasoline; in the wholesale market of international call termination; in the market of drugs and medical devices; in the import, production and wholesale market of vegetable oil; in the import and wholesale market of chemical fertilizers; in the market where non-bank financial entities operate; in the Tirana International Airport parking facilities management; in the market of service provision of measuring instruments through fuel and liquefied gas distribution instruments; in the cement production/import and wholesale market; in the concrete production market; in the market of production, transmission and digital sale of audio and video products to cable operators (repeaters of programs supported by cable network).

Notwithstanding the fact that the ACA prioritizes education over fine imposition for the subjects under investigation, it is worth mentioning that at the conclusion of the investigative processes, the competition authority levied four fines totaling ALL 224,225,947 for serious violations of Competition Law. This represents the most severe financial sanction imposed over the last five years.

8. What are the consequences of a competition law infringement?

Competition law infringements are subject to fines by the ACA. Hence, failure to notify the merger is subject to a fine of up to 1% of the total domestic turnover of the preceding financial year of each of the undertakings subject to the notification requirement. In fixing the amount of the fine, both the gravity and the duration of the infringement should be considered.

The ACA may impose on the notifying undertakings fines not exceeding 1% of the total turnover of the preceding financial year, in case they refuse to provide information, or the said information is incomplete or misleading.

Legal and contractual transactions undertaken before clearance is obtained shall be of no effect.

Finalization of a merger without clearance from the ACA is an infringement and therefore is subject to a fine of up to 10% of the total domestic turnover of the preceding financial year if the merger restricts competition.

Further, according to the provisions of Competition Law, natural persons (i.e., company directors), can be liable for failure to notify or for implementing a transaction without approval. In such cases, ACA may impose fines up to ALL 5 million.

9. Is there any competition law requirement in case of mergers & acquisitions occurring or impacting the Albanian market?

Please refer to Section 4 (c) – Concentrations of undertakings

Further, the Competition Law applies to “foreign to foreign” transactions carried out from undertakings whose activity has an impact/influence in the Albanian market. However, the concept of “impact/influence” has not been further defined by the ACA’s regulatory framework. In practice, although the undertakings participating in the merger may not have any local physical presence (branch, subsidiary, or assets), but are present in Albania indirectly (imports/sales through distributorship agreements), the authority has considered the merger subject to its jurisdiction, provided that the notification thresholds are met.

10. What is the normal merger review period?

The Competition Law outlines the process of evaluating mergers from the ACA as consisting of two phases Phase I – preliminary proceedings and Phase II – in-depth proceedings.

Phase I: Two months beginning on a working day after ACA confirms receipt of the notification, or, if the notification is incomplete, on the day after a completed notification is received (subject to a 2-week extension).

In the case of a simplified procedure (short-form decision declaring a concentration compatible with the internal market pursuant to the simplified procedure), Phase I is 25 days from the date of written confirmation that the file is complete.

Phase II: Three months from the commencement of the proceeding to approve (with or without conditions) or prohibit a transaction. Where conditions are imposed, this period is extended for up to two months.

Submission of remedies: If the parties are required to submit remedies during Phase I/Phase II the following deadlines shall be applied:

• During Phase I, remedies should be presented to the ACA within 20 calendar days after the receipt of the notification. In the case of the submission of remedies during Phase I, the timeframe for adopting a decision from ACA is extended by two weeks.
• When proposed during Phase II, the remedies should be submitted within 65 calendar days from the day on which proceedings were initiated. Where the deadlines for the final decision have been extended pursuant to the Merger Regulation, also the deadline for remedies is automatically extended by the same number of days. The ACA may accept remedies/commitments that are submitted for the first time after the expiry of this period only in exceptional cases.
• Where the parties submit their remedies/commitments within less than 55 calendar days after the initiation of proceedings, the ACA takes its final decision within 90 calendar days of the date of initiation of proceedings. If the parties submit their remedies/commitments on the 55th calendar day or afterward (even after the 65th calendar day, if those remedies/commitments should be acceptable due to exceptional circumstances) the period for the ACA to take a final decision is increased by 105 working days.
• Where the parties submit remedies/commitments within less than 55 calendar days but submit a modified version on day 55 or thereafter, the period to take a final decision will also be extended to 105 calendar days. If the parties believe that more time is needed for the investigation of the competition concerns and for the respective design of appropriate commitments, they may suggest to the Authority to extend the final deadline. Such a request should be made before the end of the 65-calendar day period.

11. Are there any fees applicable where transactions are subject to local competition review?

Yes, fees range from ALL 15,000, which is the filing fee, and ALL 500,000, which is the clearance fee.

12. Is there any possibility for companies to obtain State Aid in Albania?

Yes, companies can obtain state aid in Albania pursuant to the rules and procedures outlined by Law no. 9374, dated April 21, 2005 On State Aid, as amended (Law on State Aid). The Law on State Aid largely reflects Articles 107 and 108 Treaty on the Functioning of the European Union. The implementing legislation is partially aligned with the EU acquis only in some areas, e.g., the General Block Exemption Regulation. The Law on State Aid incorporates the regulations of the Stabilization and Association Agreement into the domestic legislation.

The purpose of the Law on State Aid is to establish guidelines and procedures for overseeing state aid control to promote the economic and social progress of the nation as well as aims to fulfil Albania’s commitments under international agreements that include provisions on state aid. Law on State Aid prohibits any aid granted from state resources, in any form, which, directly or indirectly, distorts or threatens to distort competition by favoring one or more certain undertakings or the production of certain products.

The Law on State Aid establishes the State Aid Commission (SAC) as the decision-making body that evaluates and authorizes state aid schemes and individual aid and may recover unlawful aid.

Forms of state aid mainly include:

• grants and subsidies;
• exemption, reduction, and differentiation of taxes;
• remission of arrears and fines:
• debt forgiveness or covering losses;
• guarantees on loans or the granting of loans with low interest rates;
• reduction of social security obligations;
• reduction of the price of offered products, sale of state property below market price, or purchase of products at a higher price than market price;
• increasing the state capital in enterprises or changing its value under circumstances that are not acceptable to a private investor operating under normal economic conditions.

Activities conducted in the Republic of Albania pertaining to production and services are governed by the Law on State Aid, excluding agriculture and fisheries.

13. What were the major changes brought by the COVID-19 pandemic? Have any of them stuck and how likely is it for these changes to continue to do so in the foreseeable future?

Albania did not undergo any substantial changes in competition legislation due to the COVID-19 pandemic.