Competition regulation changes in Estonia: Starting from January 1st, 2015 new versions of Competition Act and Penal Code become effective
Starting from 1st of January 2015 the new versions of Competition Act and Penal Code became effective. With the amendments made to the respective acts new competition regulation and sanctions for violation of the rules were adopted. Most of the competition rules set in the Penal Code where deleted as criminal offences and they are now classified as misdemeanours, which means that the sanctions for these offences are changed, as criminal offences are sanctioned more strictly.
Abuse of dominant position
Starting from 1st of January abuse of dominant position is not a criminal offence but misdemeanour. The sanction for abuse of dominant position according to the Penal Code was pecuniary punishment or up to 3 years imprisonment, which is according to new version of Competition Act clause 735 substituted by pecuniary punishment for natural person up to 1200 EUR or detention and in case of legal person a fine up to 400 000 EUR.
Failure to perform obligations of undertakings in control of essential facilities
A person who denies other undertakings access to a network, infrastructure or other essential facility under reasonable and non-discriminatory conditions, or engages in other activities which create violation of the obligations provided by law for undertakings with essential facilities, if a punishment for a misdemeanour has been imposed on the offender for the same act, was according to the Penal Code punishable by a pecuniary punishment or up to 3 years' imprisonment, and if committed by a legal person, the sanction was a pecuniary punishment. According to the new regulation in the Competition Act it is punishable by pecuniary punishment for natural person up to 1200 EUR or detention and in case of legal person a fine up to 400 000 EUR.
Enforcement of concentration without permission to concentrate and concentration which damages competition
Enforcement of concentration without permission to concentrate, as well as violation of a prohibition on concentration or the terms of the permission to concentrate, if the offender has been imposed a punishment for a misdemeanour for the same act, was also deleted from the Penal Code and according to the Competition Act is now punishable by pecuniary punishment for natural person up to 1200 EUR or detention and in case of legal person a fine up to 400 000 EUR.
Last but not least the clause regarding concentration control is amended in the Competition Act and it states that a concentration shall be subject to control by the Competition Authority if, during the previous financial year, the aggregate turnover in Estonia of the parties to the concentration exceeded 6,000,000 euros and the aggregate turnover in Estonia of each of at least two parties to the concentration exceeded 2,000,000 euros. The respective amounts used to be 6 391 200 and 1 917 350 EUR.
Agreements, decisions and concerted practices prejudicing free competition
Agreements, decisions or concerted practices between undertakings which have as their objective or effect the restriction of competition is still left in the Penal Code and is regarded as criminal offence.
Agreements, decisions or concerted practices between competitors, including upon participation in public procurements, which: 1)directly or indirectly determine price or other trading terms with respect to third persons; 2)limit production, service, goods markets, technical development or investment; or3) share markets or sources of supply, restrict access to goods markets to third persons or attempt to exclude third persons from these markets, are punishable by a pecuniary punishment or by 1 to 3 years’ imprisonment.
An act stated above which is committed by a legal person, is punishable by a pecuniary punishment of up to 5 to 10 per cent of the turnover of the legal person.
Kati Kruut, attorney at law of the Gencs Valters Law Firm in Tallinn.
Practising in fields of Competition Law in Latvia, Lithuania, Estonia.
T: +372 61 91 000
F: +372 61 91 007