Biggest probes launched by Competition Council in 2009

Probe into Lafarge Cement over alleged monopoly practices

Inspectors of Competition Council examined at the end of May 2009 the headquarter of Lafarge Cement Romania, and the two facilities in Hoghiz and Medgidia, following the inquiry launched by Competition Council over a possible violation of the Competition Law by the cement producer.

The investigation came as a response to the complaints submitted to the competition regulator against Lafarge Cement over alleged monopoly practices in CEM I 52,5R cement market segment in Romania.

As the competition watchdog announced, the sudden examination is the most efficient instrument to collect evidences on an alleged violation in competition law.

“Lafarge Cement (Romania) has and will promptly respond the Competition Council’s requests in order to support the institution in the regulatory process, as competition authority, in line with the provisions of the law. Lafarge Cement reaffirms its compliance with the regulatory requirements, which fully reflects in the Group’s policy implemented across the board,” the cement company said in a release after the antitrust authority launched the probe.

Large retailers in price collusion probe

In September last year, Competition Council initiated four separate inquests into suspected breach of Competition Law and EC Treaty arising from alleged food price-fixing by the four retailers, Billa, Selgros, Mega Image and Interex.

The first probe initiated by the competition watchdog is against the affiliated companies under Metro (Metro Cash&Carry Romania, real, -Hypermarket Romania, MGB Metro Buying Group) and its suppliers. The second probe was opened against Rewe Group (Selgros Cash&Carry and Billa Romania), while third against Mega Image, CDE R Interex and their suppliers.

The Competition said it was investigating the issues of collusions between retailers and suppliers, of operating a cartel aimed at fixing sale prices and resale prices, and of manipulating trading conditions.

The retail operations carried by the four companies account for around 40% of the total value of the modern food retailing in Romania.

Vodafone, Orange and Cosmote, pre-paid card collusion?

One month later, Competition Council opened another two inquests into whether the country’s telecom giants, Orange Romania, Vodafone Romania and Cosmote violated antitrust laws by giving retailers inducements not to sell prepaid services to certain economic agents.

The inquiry was initiated following a complaint over an alleged collusion between Orange Romania and its retailers for not servicing certain clients. The second investigation was into alleged antitrust practices of reseller price-fixing and collusions between economic agents along the distribution chain of Orange Romania, Vodafone Romania and Cosmote.

“The regulator is currently carrying out a possible abuse of dominance on Orange, Vodafone and Romtelecom on call end services market within own public telephony network,” the competition watchdog said.

Fruit and vegetable market under CC scrutiny

Competition council launched another investigation in October into a possible price collusion between Interfruct, Albinuta Shops and Profi Rom Food.

The inspectors have examined the headquarters of the three retailers. “Competition Council can sanction companies that breach the competition law with fines up to 10% of their turnover. However, companies under leniency program can obtain fine-exempt status or substantial reduction in fines”, Bogdan Chiritoiu (photo), chairman of the Competition Council.

In fall 2008, CC imposed a €850,000 fine to retail chains Billa Romania, Pic and Spar for providing false information related to most favored customer clause, under which the provider is obliged to provide the retailer the best price in the market.

First impromptu visits at LaborMed and Ozone

In November, the Competition Council has undertaken impromptu inspection visits at LaborMed and Ozone headquarters, after launching a probe into the antitrust issues raised by the acquisition of ozone Laboratories’s assets by Advent, prior to receiving the OK of the institution.

“It is the first time we undertake impromptu inspection visits in case of an economic concentration operation. But the failure to meet the obligation of not implementing an economic concentration prior to being authorized by the Competition Council is a grave breach of regulations on the control over mergers and acquisitions. This is why the Competition Council will make use of all available tools to make sure economic agents observe the regulation.

Competition Council probes into the sale of League One-wide packaging of broadcasting rights

In April, the Competition Council launched a probe into the possible violations of competition law by the Professional Football League and by FRF for the joint sale of broadcasting rights as well as by Antena 1 – RCS&RDS joint venture for the use of these rights.

The joint venture Antena 1 channel – RCS&RDS won on March 31 2008, the tender for broadcasting rights package of the following three football seasons in League One, paying €85 million. Antena 1 won the tender by offering €102 mln (VAT included), Realitatea TV stopped at €84.5 mln and Kanal D at €73 mln.

The broadcasting rights package for League One football games include 2008/2009, 2009/2010 and 2010/2011 seasons.