Amendments to the Competition Law

In brief

Through Law No. 199/2023 (the Law), the Parliament of the Republic of Moldova has approved a series of amendments and additions to Competition Law No. 183/2012. These amendments are aimed at improving and updating the legal framework in the field of competition in the Republic of Moldova. One of the main changes relates to the explicit prohibition of exceptions for anti-competitive agreements manifested through cartel agreements. Furthermore, a relative presumption regarding the holding of a dominant position by enterprises on a certain relevant market has been introduced, and the threshold for the cumulative turnover of enterprises involved in operations such as mergers, acquisitions, control takeovers, etc., has been increased. These changes are aimed at promoting a culture of competition in the Republic of Moldova and increasing trust in the activities of the authorities responsible for competition. These changes also provide clarity regarding market competition, and they promote a fairer and more predictable environment for enterprises and in relationships between enterprises and the Competition Council.

In detail

Prohibition of anti-competitive agreements

Any agreements or concerted practices between enterprises or associations of enterprises that restrict, prevent, or distort competition are strictly prohibited. These agreements may include price fixing, production control, market sharing, or other practices aimed at limiting competition.

(Article 5 of the Law)

Exceptions to anti-competitive agreements

Exceptions to the prohibition of anti-competitive agreements are provided, with clear conditions stipulated that must be met for such agreements not to be considered anti-competitive. These conditions include benefits for production, distribution, technical or economic progress, benefits for consumers, necessary restrictions, and the non-elimination of competition. Cartels cannot benefit from the exceptions provided.

(Article 6 of the Law)

Minor importance anti-competitive agreements

Criteria and thresholds are defined for determining whether agreements are of minor importance. The market shares of the parties involved in such agreements must fall within specific limits, as follows:

• The cumulative market share is below 10% in any relevant market, in the case of agreements between competitors, or below 15% in the case of agreements between non-competitors.

• For markets where competition is restricted by multiple agreements, the market share thresholds both decrease to 5%.

• An agreement is not considered to significantly restrict competition if market shares do not increase by more than two percentage points over two consecutive years, except for the agreements mentioned in Article 9.

 (Article 8 of the Law)

Prohibited minor importance agreements

Certain severe restrictions, such as price fixing, production limitation, market sharing and participation in auctions with rigged bids, are prohibited for agreements of minor importance. Rules about abusive dominant positions have been introduced which state that the abusive use of a dominant market position is prohibited. Such abusive practices include the imposition of unfair prices, limiting technical or commercial development to the detriment of consumers, applying unequal conditions for equivalent transactions, applying excessive or predatory pricing, and the unjustified refusal to contract with certain suppliers or to deliver to certain beneficiaries. An exception is provided that the prohibitions do not apply if the dominant enterprise can demonstrate that its practices are objectively justified and necessary or lead to significant efficiency gains that offset anti-competitive effects.

Economic concentration operations

The thresholds at which the Competition Council must be notified of economic concentration operations have been increased. Such notification must be provided before the implementation of economic concentration operations if:

• the total worldwide turnover of the enterprises involved in the operation, as recorded in the calendar year before the operation, exceeds MDL 50 million, and

• at least two enterprises are involved in the operation, each of which achieved a total turnover of over MDL 20 million in the Republic of Moldova in the calendar year before the operation

However, after the conclusion of the economic concentration agreement, the implementation of a public offer or the acquisition of a control package is allowed with the fulfilment of both the following conditions:

• The Competition Council is immediately notified of the economic concentration.

• The acquirer of control does not exercise voting rights or only exercises them to maintain the full value of its investment.

(Article 22 of the Law)

Fee for economic concentration notification examination

A fee has been introduced for the examination of economic concentration notifications. The fee is calculated as 0.1% of the total turnover of the enterprises involved in the concentration and cannot exceed MDL 150,000. (Article 27 of the Law)

Competition Council responsibilities

The powers and competencies of the Competition Council have been expanded, including in the field of state aid, commercial advertising, railway transport and the investigation of unfair commercial practices.

Remote hearings

The possibility has been introduced for individuals to have remote hearings during investigations.

Prohibition of actions or inactions by public authorities restricting competition

The Law specifies that public authority actions or inactions that limit competition are prohibited, except in exceptional cases provided for by the law on a state of emergency or other similar laws. The responsibility of individuals holding positions of authority in public authorities is established under the Contravention Code.

Execution of Competition Council decisions regarding the actions or inactions of public authorities

The procedure for the execution of decisions issued by the Competition Council concerning the actions or inactions of public authorities is regulated, including the possibility to request the annulment of acts that have led to the restriction of competition.

Suspension of the deadline for the evaluation of economic concentration operations

The possibility of suspending the deadline for the evaluation of economic concentration operations has been established in certain circumstances, such as the submission of observations by the involved parties or the request for a hearing regarding the investigation report.

Competition Council independence and autonomy

The independence and autonomy of the Competition Council in carrying out its functions have been confirmed in compliance with constitutional and legal provisions.

Details regarding the structure of the Competition Council

The structure of the Competition Council is specified as including the Plenary, with five members, and the Executive Office. The remuneration and professional training of the personnel are re-evaluated annually based on the economic conditions in the country.

Annual reporting by the Competition Council

The Competition Council is obliged to prepare an annual report that includes the annual financial report, information about the activities conducted, priorities for the following year, appointments and dismissals of Plenary members, information about allocated resources and other information determined as relevant by the Competition Council.

Use of funds from fines imposed by the Competition Council

Under the Law, funds derived from fines or other sanctions imposed by the Competition Council are directed to the state budget.

Parliamentary oversight of Competition Council activities

Parliament has the right to exercise oversight over the activities of the Competition Council, which is obliged to cooperate with parliamentary bodies in this regard.

[Source: Law No. 199 of 20 July 2023 on the amendment of some normative acts, published in the Official Gazette No. 322 - 324 of 18 August 2023; in force as of 18 September 2023]

The takeaway

On 15 September 2023, legislation came into force that introduced important amendments to the Competition Law  No 183/2012.