LEGAL UPDATE: AS OF 31 DECEMBER 2020 THE GUIDELINE TO EMPOWER COMPETITION AUTHORITY ENTERS INTO FORCE IN ALBANIA

The Competition Authority (“CA”) recently published the Guideline “To empower the Competition Authority to be more effective in the enforcement of Law 9121/2003 “On Competition Protection”, as amended, and to ensure the proper functioning of the market”[1] (Guideline), to enter into effect in 31 December 2020. The Guideline is in line with the Directive 2019/1[2] aiming to empower competition authorities of Member States to be more effective and ensure the proper functioning of the internal market.

1. Scope of the Guideline

As its name indicates, the Guideline aims to empower the CA by providing the needed authority as well as financial, human, technical and technological means, to ensure the enforcement of Law no. 9121/2003 “On Competition Protection” (Competition Law), mainly focusing on Article 4 and Article 9, as aligned with Article 101 and 102 of the Treaty of the Functioning of the European Union (TFEU). Article 4 and 9 of the Competition Law are crucial to ensure open, competitive markets, in which undertakings compete based on merits and without barriers.
The Guideline grants the CA necessary guarantees of independence, resources, enforcement and fining powers to ensure a uniform application of the Competition Law, mainly Article 4 and 9, to all undertakings performing in the Albanian market.

2. Main powers of the CA

The Guideline grants the CA the below-enlisted powers to enforce Article 4 and 9 of the Competition Law:

1. CA is conferred investigative powers to detect any agreement, decision or concerted practice prohibited by Article 4, or any abuse of a dominant position prohibited by Article 9 of Competition Law, at any stage of the proceedings before them;
2. CA is entitled to conduct inspections of premises of undertakings[3], including private homes of directors, managers or other staff, when there are reasonable grounds for an alleged infringement of Article 4 and 9 of the Competition Law. The CA can also conduct unannounced inspections of undertakings and associations of undertakings including their right to enter any premises i.e. land, mean of transport of undertakings etc.;

• CA has the power to obtain relevant information from all undertakings that are subject to investigation and/or inspection procedures and to conduct interviews in view of collecting evidence. To ensure effective inspections, the CA should be entitled to search for documents, files or data on devices which are not defined in advance. The power of the CA to examine such information, books and records should cover all forms of correspondences, electronic messages included, irrespective of whether they have been deleted or appear to be unread;

1. CA is given effective means to restore competition in the market, including decision-making powers to impose proportionate fines or other remedies, (i.e. interim measures[4]), as provided under the Guideline. The maximum amount of the fine that is possible to be imposed is up 10% of the total turnover of the undertaking concerned. The CA can also impose proportional, periodical fines, to be determined in proportion to the average daily total turnover of such undertakings.

In any case, the powers conferred to the CA should be exercised in compliance with fundamental rights, not only in terms of inspection proceedings but also in the context of imposing penalties.

3. Conflict of interest

To ensure the independence of the CA, its heads, staff and those who take decisions, should act with integrity and refrain from any action which is incompatible with the performance of their duties. This means that during their term of office, the staff and those who take decisions will not be able to deal with proceedings for the application of Article 4 and Article 9 of the Law in which they have been involved, or which directly concern undertakings or associations of undertaking in which they have been employed or otherwise professionally engaged, if this can compromise their impartiality in a specific case.
Moreover, the staff and those who take decisions, as well as their close relatives, should not have any interest in any business  or organization that is subject to proceedings for the application of Article 4 and Article 9 of the Law, in which they take part, if this has the potential to compromise their impartiality in a specific case.

Cool-off period: for a reasonable period after termination of their term of office or their employment agreement with the CA, whenever staff or those who took decisions, who were engaged in proceedings for the application of Article 4 and Article 9 of the Law, should not be involved in the same case in their new occupation. The length of this period will be determined based on the nature of the new occupation, their level of involvement and their responsibilities in the same proceedings during their employment or term of office with the CA.

4. Introduction of leniency programs

Chapter six of the Guideline provides for leniency programs. Article 17 of the Guideline on immunity from fines enables the CA to grant immunity from fines to undertakings for disclosing their participation in secret cartels. CA grant immunity to applicants that fulfill the conditions laid down in Article 19 of the Guideline, discloses its participation in a secret cartel and is the first to submit evidence which at the time the CA receives an application, enables it to carry out an inspection related to the secret cartel, or submits evidence that in the view of the CA, is sufficient for it to find an infringement covered by the leniency program.

Another leniency program in place, provided under Article 18 of the Guideline, ensures reduction of fines to undertakings which do not qualify for immunity from fines as explained above.

5. Additional provisions

The final chapters of the Guideline emphasize the need for cooperation between national competition authorities by stating that the CA may carry an inspection or interview on behalf of another homologue competition authority[5]. Lastly, some data protection provisions are further provided to ensure that the information provided by natural persons to the CA, shall not be used in evidence to impose sanctions on that natural person or his or her relatives.

Another guarantee, as provided under Article 28, paragraph 2 of the Guideline, relates to non-disclosure of information by the CA, its officials, staff or other persons working under the supervision of those authorities, that was acquired on the basis of the powers provided under the Guideline.

The Guideline will enter into force as of 31 December 2020 and will be applied in light of the current competition legal framework.

[1] For the full text of the Guideline in Albanian language please refer to the link below: http://www.caa.gov.al/uploads/laws/Udhezues_30.06.2020.pdf

[2] Directive EU 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of Member States to be more effective enforcers and to ensure the proper functioning of the internal market.

[3] Undertaking as referred under Article 4 and 9 and under Article 2, paragraph 1 of the Guideline, means an entity engaged in an economic activity regardless of nets legal status and the way it is financed.

[4] Interim measures are used to ensure that the infringement being investigated does not seriously and irreparably harm competition while the investigation is ongoing.

[5] Chapter 7 of the Guideline “On cooperation between national competition authorities” will enter into force and apply when Albania becomes a full member of the European Union. The same applies for Chapter 8 on “Limitations period”.