Competition and State Aid

When addressing highly sensitive matters as those in the area of competition law, the composition of the team is always crucial. With this in mind, we have built a team focusing exclusively on competition and state aid matters, which:

• keeps your connected with the most recent developments in the competition and state aid fields and
• provides you with genuinely distinctive advice, thanks to solid academic background and extensive practical experience

Our broad industry expertise and experience spans across the most dynamic sectors in the Romanian economy, such as: agribusiness, automotive, banking and financial services, consumer goods, energy and natural resources, information technology, insurance, media, pharmaceuticals, real estate development and construction, retail, telecommunications.

We apply a creative, yet thorough multidisciplinary approach to all aspects of our clients’ competition law issues, such as:

• cartels, abuse of dominance and other restrictive practices
• competition investigations
• competition litigation before national courts
• representation before EU courts
• transaction structuring and business operations
• competition compliance
• merger clearance
• unfair competition and
• state aid projects

We deliver tailored seminars on competition law developments, including online training programs. Our thinking is also marketed through our frequent contribution to conferences and specialized publications, such as:

• Wolters Kluwer International Encyclopedia of Laws (Competition Law in Romania)
• e-Competitions Bulletin / e-concurrences (Institute of Competition Law)

Investigations

Our team delivers the complete range of competition law advice, support, and representation that businesses need in high-stakes investigations, be they focused on cartels, abuse of dominance or other restrictive practices. We are called to assist on:

• dawn raid assistance, and post-raid risk assessment and recommendations
• submissions in reply to competition authority’s requests for information
• advice on leniency applications
• commitments
• defense in response to the investigation team’s statement of objections
• representation during the hearings

Examples of our work in competition law investigations include representation of:

• clients active in various sectors, such as: media; insurance; food retail; milk; private medical services; cost allocation meters for heating; aerospace, defense, security and surveillance; production and sale of fire detection and voice alarm products and systems; production and sale of electricity meters and ancilliary measuring equipment, in ongoing investigations concerning various potential law breaches
• the second largest cash and carry retailer in Romania and several major multinational producers (beverages, dairy, other food products), in the Competition Council’s food retail investigation focused on price fixing during promotions
• the second largest oil company in Romania, in a competition investigation on limitation of sales, in the largest case to date in terms of the fines imposed by the competition authority
• the leader of the large household appliances market and the leader of the small household appliances market, in a competition investigation on price fixing and limitation of sales in buy-back campaigns for electric and electronic equipment
• a leading telecommunications company, in an abuse of dominance investigation
• the Romanian subsidiary of an American private pensions company, in a client sharing investigation on the market for privately managed pension funds, in the first case in which the competition authority ascertained a breach of the Treaty
• the Romanian subsidiary of an American insurance company, in an investigation of concerted price fixing on the market for privately managed pension funds, finalized with the successful rejection of the sanctioning proposals
• a Romanian distributor of pharmaceutical products, in a collective boycott investigation, finalized with the successful rejection of the sanctioning proposals
• a major multinational company specialized in pipeline equipment and services, in a bid rigging investigation in auctions organized by Transgaz and Romgaz, resulting in a no violation finding for our client
• the Romanian subsidiary of a major French cement producer, in an abuse of dominance investigation in terms of pricing and exploitation of economic dependence, finalized with the conclusion of no breach of the law

Competition Litigation

When confronted with a sanction imposed by the competition authority, clients may turn to us to challenge the decisions before national courts, pleading for annulment or reduction of the fines.

The correct interpretation of competition rules in the Treaty and in the domestic law, standard of evidence, rights of defense and proportionality, deriving from consistent Court of Justice of the European Union case law, are only few of the arguments we build our advice on, often in cooperation with experts in competition economics.

In addition, we represent clients before EU courts.

Examples of our work in competition litigation include assistance to and representation of:

• a major multinational IT&C company, in its successful intervention before the European Union courts, in support of an European Commission decision rejecting a complaint of abuse of dominance brought by another company
• the second largest oil company in Romania, in obtaining a 23% reduction of a fine in a case on limitation of sales, the largest to date in terms of the fines imposed by the competition authority
• the Romanian subsidiary of a major Austrian bank, in obtaining a 40% reduction of a fine for inaccurate or incomplete information in an investigation on the market for banking and inter-banking services in Romania
• the second largest cash and carry retailer in Romania, in a case on price fixing during promotions in the sale of food products
• four suppliers of food products (frozen products, beverages, snacks, dairy), part of multinational groups, in a case on price fixing during promotions
• the leader of the small household appliances market, in a case on price fixing and limitation of sales in buy-back campaigns organized by an association dealing with waste management
• the Romanian subsidiary of an American private pensions company, in a client-sharing case, in the first case of the Romanian competition authority finding a breach of the Treaty
• the Romanian subsidiary of a major Austrian bank, in a case on access to the investigation file in the context of a sanction for inaccurate or incomplete information
• a leading telecommunications company, in its successful intervention in support of a competition authority decision that rejected a complaint on anti-competitive agreement with certain distributors, brought by a former distributor
• a company, in court defense against a damages application filed by a competitor, alleging state aid

Transaction Structuring and Business Operations

We aim to recommend the transaction structures that best fit and advance our clients’ interests, but also comply with the competition law.

Also, we assess the compatibility of our clients’ day-to-day business conduct to point out and reduce business behaviors with high legal risks.

Among the most frequently scrutinized are commercial mechanisms and policies involving:

• horizontal relationships (reporting systems raising questions in terms of exchange of information, research and development, production, purchasing, commercialization and standardization agreements)
• vertical relationships (single branding, exclusivity, selective distribution, franchising, category management, shelf allocation, termination of relationships with distributors, specific rules in the motor vehicle sector)
• discount systems (from the perspective of loyalty-inducing effects, risk of foreclosure of competitors or discrimination)

Competition Compliance

We evaluate our clients’ business practices and contracts to identify potential competition law vulnerabilities and to prevent costly mistakes.

The compliance programs we design are based on our competition audits that highlight the competition law risks and recommend practical strategies and tactics to mitigate them.

We then prepare compliance tailored manuals and guidelines and deliver customized training on a wide range of highly relevant issues in EU and Romanian competition law, as well as on recommended management behavior in dawn raids.

Merger Clearance

We guide clients during the entire journey to merger clearance and:

• assess whether notification of an economic concentration is necessary
• advise on ancillary restraints in the transaction documents (non-compete, non solicitation)
• advise on remedies in order to obtain clearance of mergers that raise concerns
• advise on the fine distinction between preserving the value of the target between signing and closing and implementing the transaction prior to authorization, making sure the client is not exposed to any risks of sanctions
• prepare the notifications and subsequent answers to the authority in order to obtain merger clearance

Examples of our work in merger clearance include assistance to:

• a leading global flooring manufacturing supplier, for the acquisition of one of the largest manufactures of ceramic tiles
• a worldwide group in mineral oils and bio fuels, as well as one of the world’s largest asphalt distributors, with respect to the reorganization of their bitumen business
• the European subsidiary of a major Japanese company specialized in the development and distribution of technically advanced products, for the acquisition of the Romanian market leader in the distribution and plant protection products and certified seed
• a leading real estate developer, on several real estate acquisition projects in Romania
• the Romanian subsidiary of an Israeli automotive company, for the acquisition of a part of a Romanian distributor’s business in the automotive sector
• a global leader in media and entertainment, with businesses in television networks, filmed entertainment and publishing, for the Romanian component of the acquisition of a premium cable and satellite television network
• a large French financial services company, in the acquisition of a leading provider of private medical services in Romania
• a local subsidiary, part of a major international group in the fast-moving consumer goods sector, in obtaining competition clearance for the acquisition of a Romanian ice cream business
• a major international oil services company, in the in-depth investigation initiated during the merger clearance process for the acquisition of an oil service company
• one of the leading mobile electronic communication services providers in Romania, in obtaining competition clearance for the acquisition of two dealership services networks

State Aid

Your concerns whether state aid can be provided for investment projects, either under existing state aid schemes or by assessing compatibility criteria for ad hoc state aid, may find answers in our advice.

Among competitors, doubts on illegal state aid may be brought up. We identify the issue and guide our client on the best way to respond.

When M&A projects involve companies having received state aid, we assess and make sure the requirements for continuing to benefit from the financing (including notification of or consent from the authorities) are observed.

Examples of our work in state aid include assistance to:

• the Romanian State, in consortium with a reputable international law firm, in connection with the state aid aspects of an ICSID arbitration initiated by certain investors, under the rules on supporting investments in deprived areas, in the context of EU accession
• a company, in court defense against a damages application filed by a competitor, alleging state aid
• clients in various industry sectors (such as gaming or management of waste of electric and electronic equipment) in raising the state aid issues of draft laws before the authorities
• a major energy company, in connection with the state aid aspects related to the establishment of a joint venture having as object the generation of electricity, together with other strategic investors and a State-owned company
• a leading Romanian bank, in connection with the state aid aspects of its envisaged loan in favor of a major Romanian company, under the Commission Guidelines on State aid for rescuing and restructuring firms in difficulty
• a leading company in the energy and natural resources industry, in connection with the potential qualification of a taxation measure as state aid
• clients in various industry sectors, in terms of assessment of eligibility under state aid schemes and programs for financing investment projects
• clients in various industry sectors, in connection with the implications of opening insolvency proceedings after obtaining the financing
• clients in various industry sectors, in terms of requirements to be observed in order to continue to benefit from state aid obtained prior to M&A transactions

Unfair Competition

We are well aware that unfair competition acts by competitors or former employees or managers can significantly harm business.

To protect clients in case of unfair competition, we assess and advise on the most suitable ways to proceed in order to obtain, as the case may be, prohibition of the unfair practice, the imposition of sanctions on the offender and recovery of damages, especially in terms of:

• enticing clientele or employees
• denigration of competitors or their products or
• disclosure and use of trade secrets