1. EFFECTIVENESS OF COMPETITION LAW AND POLICY ENFORCEMENT IN ROMANIA
- 20 years of existence and 10 years of EU membership -
Bogdan M. Chirițoiu, President
Romanian Competition Council
Competition Policy: Contemporary Trends and Challenges
November 17-18, 2017, Tbilisi

2. Impact of EU accession
Modern competition law model, already validated by practice
Constant pressure to evolve and adapt law and policy
Independent and autonomous competition authority with adequate budget and staffing
Efficient competition policy advocate

3. Post-accession competition enforcement
Consumer welfare centered approach
Case selection based on market impact
Less reactive, more pro-active enforcement activity
Innovative investigative and legislative tools
New institutional setup with dedicated units (Director general, Chief economist, Cartel, Bid-rigging, Advocacy & RIA)

4. Post-accession international activity
Active ECN member
Associate country in OECD Comp Committee
GCR Enforcement Rating 2017 – 3 stars rating for RCC
Extensive track record of implementing projects and cooperation initiatives – e.g Moldova, Ukraine, Macedonia, Bosnia and Herzegovina, Egypt

5. Romania - evolutions at macroeconomic level
A study by Gutman and Voigt (2014) found that in countries with competition law the GDP growth rate was 2-3-% higher than in states without competition law
In Romania:
4.8 % GDP Growth – 2016, 5.7% - in the first quarter of 2017
Gutman and Voigt – “Lending a Hand to the Invisible Hand? Assessing the Effects of Newly Enacted Competition Laws. Assessing the Effects of Newly Enacted Competition Laws”, 2014;

6. Romania - evolutions at macroeconomic level
In 20 years, :
Nominal GDP increased from 87.3 billion EUR to billion EUR;
GDP per capita when adjusted by purchasing power parity increased from 4,900 EUR to 16,500 EUR i.e. from 31% of the European average to 59% in 2016;
Annual inflation rate decreased from approx. 40% to approx. 0.4% in 2015 and -1.1% in 2016 due to consumption tax reductions;
Labour productivity per capita increased from 26.3% of the European average to 59.4%;
A stable and moderate unemployment rate - around 5.9% in 2016;
Stable exchange rate, decreasing public debt;

7. Romania - evolutions at macroeconomic level
No of active companies increased from 327,736 in 1997 to 513,850 in 2015
More companies → markets concentration decreased→ the average of HHI at sectoral level decreased from 26.5 to 12.1 → more competition
Evolution of the HHI index in 20 yrs/economic sectors:

8. Competition impact and impact on competition
-a better functioning of markets in the interest of consumers-
Measuring the impact of competition enforcement -important task of RCC, due to:
more pro-active enforcement approach
Consumer welfare-oriented
Our efforts focus:
strengthening competition and the regulatory environment as key pillar in improving Romania’s competitiveness and economic performance
market monitoring and advocacy activities
Study on the assessment of competition policy’s impact, 2017
RCC-OECD Competition Assessment Project Project,
The Aggregate Index of Competitive Pressure, 2013

9. Study on the assessment of competition policy’s impact
Analysis carried out by the Bucharest Academy of Economic Studies (BAES)
Period covered: 20 years of RCC’s activity ( )
Data provided by the Chief Economist Unit of the RCC
The study quantifies the competition impact at:
microeconomic scale (based on major interventions of RCC in 10 key industries) and
macroeconomic scale (influence of competition intensity to dynamics and evolution of macroeconomic indicators)

10. Study on the assessment of competition policy’s impact - methodology
BAES took into consideration methodologies issued by the EC, OECD and UK OFT
The Romanian approach is “conservative” and covers a small part of the overall impact of RCC’s activity, due to the following reasons:
only large cases were assessed
indirect effect of RCC interventions was not considered
the impact of RCC’s interventions on market regulation was not assessed except for telecom and banking

11. Study on the assessment of competition policy’s impact - methodology
RCC provided data concerning:
size of markets affected
turnover of parties
duration of infringement
results of ex-post analysis
The assessment was customized to the specificity of each key industry, in close correlation with the type of RCC’s intervention (legislative amendments, cartel, merger etc)

12. Impact on consumers savings – 1 billion euro

13. INDUSTRY
RCC’s intervention
Banking
GO 50 (early reimbursement fee)
Sector inquiry (card payment services)
Civil liability insurance for motor vehicles
Sanction for fixing rates for international car insurance rates
Private pension Funds
Sanction for clients sharing agreement
Telecom
Commitment decision – pre-pay
Recommendations to Telecom Regulator on granting the rights to use radio frequencies
Cement
Sanction for price-fixing cartel

14. INDUSTRY
RCC’s intervention
Electricity
Sanction for vertical agreement between the Romanian energy producer and energy suppliers
Fuel
Sanction for cartel for withdrawal of EcoPremium
Sanction for cartel on fuel wholesale distribution
Retail
4 mergers (Auchan-Real; Carrefour-Billa; Mega Image-Angst; Dante-PC Garage) and sanction for RPM
Liberal professions
Cartel sanctions - dental technicians, accountants

16. Thank you!
გმადლობთ!