competition law updates & standardisation compliance · belarus ul nemiga 40 220004 minsk phone...
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Riga
Rūdolfs Eņģelis, Ringla Vīksne
COMPETITION LAW UPDATES &STANDARDISATION COMPLIANCE
25 March 2014
ESTONIA LATVIA LITHUANIA BELARUS
www.sorainen.com
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numbers more than 140 lawyers and tax advisers First law firm in the Baltic States and
Belarus where a quality management system has been implemented under ISO 9001 standards Serviced more than 8,000 local and
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COMPETITION LAW UPDATES
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Latvia - Amendments in the Latvian Competition Law
Extensive amendments in the Latvian Competition Law inprocess covering: prioritisation of cases mergers: differentiated thresholds, post-merger notification, fining
for notification failure, filling fee leniency program application (general principles to raise awareness) compulsory execution procedures & decision execution enforcement information inquiries from banks & electronic communication
operators joint liability of parent companies fine up to 1 percentage of turnover for provision of false information,
failure to provide information, refusal to comply with demands,damage of the seal during a dawn raid
administrative agreement at administrative investigation stage
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Latvia - Draft law On Ban of unfair retail practice
Draft law On Ban of unfair retail practice in Saeima 1st reading on 20 March 2014 expected to enter into force on 1 January 2015 replace the present regulation of a dominant position in retail (DPR)
under Section 13(2) of the Competition Law.
Main differences from DPR regulation: extends regulation to all food retailers, regardless of their position in
the market applies regulation to non-food retailers with significant influence in
non-food product sale extends regulation to all suppliers, regardless of their position in
Latvian or international markets
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Draft law On Ban of unfair retail practice – Unfair terms
Food Food / Non - food
Compensation of retailer’s lost (or expected) profit from sale of goods
Payment for entering into a contract (exception: a contract with a new supplier)
Obligation to purchase goods, services or property from a 3rd party indicated by the retailer
(exception: objectively substantiated, a written contract)
Payment for placing goods in a retail outlet(including placing on shelves)
(exception: a written contract for additional arrangement of goods in special spots)
Obligation to ensures the lowest price Unfair and non-substantiated sanctions for violation of a contract
Change the specification of goods, including the range of goods, in less than 10 days
Unfair and unreasonably long payment orsettlement terms for supplied goods
Full or partial compensation of sales promotion costs (exception: a prior written agreement on
sales promotion measures)
Costs compensation of fitting or renovating shops, charges for supply of goods to a retail
outlet to be newly opened
Compensation of costs incurred due to revision of consumers’ complaints (exception: defect of
product is caused by the supplier)
Obligation of take back unsold goods(exception: low-quality, new goods, supply or
increase of supply initiated by supplier)
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Food
Unfair payments. Allowed discounts:• a quantity discount depending on the value or
the amount• a campaign discount for a set time period(note: a campaign discount may not be applied togoods that have not been sold during thepromotion)
Unreasonably long payment terms. Specialrequirements for payments:• within 20 days from delivery for fresh vegetables
with an expiry date less than 10 days• within 30 days from delivery for food products
with an expiry date less than 20 days
Obligation to accept food products with at least 2/3validity of the set expiry date exceeding 30 days
Obligation to a retailer to inform of changes to anorder at least 24 hours before the delivery
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Draft law On Ban of unfair retail practice – Unfair terms
ESTONIA LATVIA LITHUANIA BELARUS
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Lithuania – Latest developments
Two decisions regarding application of the Law on theProhibition of Unfair Practices of Retailers in January 2014: obligation to compensate damages suffered by the retailer as a result
of unilateral price reduction terms on return of goods as the disproportionate transfer of the risks
to suppliers
Competition Law amendments of December 2013 regardingfine recovery appeal of the LCA resolution suspends the enforcement of recovery
of the fine and interests 6 % interests for delayed penalty payment, which might be
calculated for 180 days postponed payment of the fine if there are objective reasons for it
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Estonia – Latest developments
A draft act amending the Estonian Penal Code plans to: leave only anti-competitive agreements as criminal offences exclude the possibility to qualify abuse of dominance, failure to give
notice of concentration, violation of obligations of undertakings incontrol of essential facilities as a criminal offence even if the offenderhas been imposed a punishment for a misdemeanour for the sameact before
Estonian Competition Authority has been activelyinvestigating potential horizontal price fixing of basic foodproducts, e.g. milk, bread, and of vodka Estonian Competition Authority makes active use of dawn
raids
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STANDARDISATION ISSUES
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Competition law and standardisation
Standard setting is a form of an agreement betweencompanies and competition law aims to avoid agreements restricting
competition
Standardisation agreements can result in substantialefficiency gains and consumer benefits but also can rise competition law concerns
a reduction in price competition following anticompetitivediscussions
foreclosure of innovative technologies prevent effective access to the standard
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Safe harbour conditions
Generally standard agreement does not restrict competitionif four conditions are met
Unrestricted participation all competitors affected by the standard are guaranteed to
participate in standard setting process
Transparent standard-setting procedure stakeholders are informed and consulted at each stage of the
development of the standard
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Safe harbour conditions
Non-binding nature members involved in standard-setting remain free to apply and
develop alternative standards
Fair and non-discriminatory access the rules of the standard-setting organisation ensures effective
access to the standard on fair, reasonable and non-discriminato-ry terms standards that are not accessible to third parties may
discriminate or foreclose third parties from the market
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Application of standard terms
Competition law also applies to usage of standard terms andconditions of sale or purchase elaborated by a tradeassociation or directly by companies Standard terms widely used within an industry may become
de facto aligned among companies Generally standard terms will not rise competition law
considerations as long as participation in the actual establishment of standard
terms is unrestricted and the established standard terms are non-binding and effectively accessible for anyone
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LatviaKr. Valdemāra iela 21LV-1010 Rigaphone +371 67 365 000fax +371 67 365 [email protected]
LithuaniaJogailos 4LT-01116 Vilniusphone +370 52 685 040fax +370 52 685 [email protected]
Belarusul Nemiga 40220004 Minskphone +375 17 306 2102 fax +375 17 306 2079 [email protected]
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Partner
Rūdolfs Eņģelis
Thank you!
Phone: +371 67 365 000
Mobile: +371 29 454 150