Boga & Associates in Tirana look at Law No. 9121 “On the Protection of Competition”
Albania’s competition protection system is governed by Law No. 9121 “On the Protection of Competition” (Competition Law), which entered into force on December 1 2003. It is designed to harmonise the Albanian competition system with the “acquis communautaire”. Under this framework a new law amending the current Competition Law was recently adopted. The Albanian Competition Authority (ACA) is the authority entitled to perform an ex ante and ex post investigations into the operations in the relevant market from a competition law perspective.
The pillars of the Albanian Competition Law, which mainly follows EU competition legislation, are the prohibition of restrictive agreements, abuses of dominant positions and concentrations leading to the creation or reinforcement of a dominant position, when such are carried out by “undertakings”.
For the purposes of this law, any domestic of foreign natural persons and public legal or private legal entities, engaged in a commercial activity will be considered to be undertakings, provided that their activity has an impact on the national market.
Agreements restricting competition
Competition Law prohibits agreements that have as their object the prevention, restriction or distortion of competition in the market, unless they meet certain conditions to qualify for the exemption granted by the ACA, either individually or on a category basis. In addition, the Competition Law includes the de minimis rule pursuant to which those agreements which are considered to not significantly affect competition in the market may be exempted from the prohibition.
Undertakings have an obligation to notify restrictive agreements to the ACA, which will then decide whether the said agreements will be considered prohibited under the Competition Law.
Control of concentrations
The provisions of the Competition Law establish that the concentrations of undertakings involving a lasting change of control as a result of (i) the merger of two or more undertakings or parts of undertakings independent of each other; (ii) the acquisition of direct or indirect control by (a) one or more natural persons (individuals) that who also have control of at least one other undertaking or (b) one or more other undertakings, or part of these undertakings, whether by purchase of shares or assets, by Chapter 9 contract or by any other legal means; (iii) the acquisition of direct or indirect control of one or more undertakings or parts of such undertakings; (iv) the creation of a joint venture that does not have as its object or effect the coordination of competing activities between two or more independent undertakings, shall be notified to the ACA for its authorisation if in the financial year preceding the concentration, the notification thresholds were met. The notification must take place within 30 days of the conclusion/signature of the relevant agreement (merger, acquisition of control, or creation of a joint venture) and announcement of any public bid.
The notification thresholds are met where (a) the combined worldwide turnover of all the participating undertakings exceeds L7 billion (approximately, €50 million) and the domestic turnover of at least one participating undertaking exceeds ALL 200 million (approximately, €1,4 million); or (b) the combined domestic turnover of all the participating undertakings exceeds L400 million (approximately, €2,8 million) and the domestic turnover of at least one participating undertaking exceeds L200 million (approximately, €1,4 million).
The Competition Law outlines preliminary and in-depth procedure for ACA’s assessment of concentrations. In the preliminary proceedings, the ACA will examine the notification in order to determine whether the concentration “reveals signs of substantial restriction of the competition in the market or in a part of the market, especially, as a result of the creation or strengthening of the dominant position”, while in the in-depth proceedings, ACA will assess whether the concentration substantially restricts competition in the market or in a part of the market, especially, as a result of the creation or strengthening of the dominant position.
Abuse of dominant position
A dominant position is not prohibited per se but rather the abuse of such a dominant position. The Law recognises the existence of single (where one undertaking is involved) and collective (where several more undertakings are involved) dominant positions. A dominant position is defined as an economic power held by one or more undertakings that enable it or them to impede the effective competition in the market meaning it or they can act, with regard to supply and demand, independently of other participants in the market such as competitors, clients and consumers. Competition Law provides a non-exhaustive list of the criteria to be assessed in establishing whether there exists a dominant position or a prohibited abusive behaviour. Indicatively, the fixing of unfair sale or purchase prices and the adoption of discriminatory practices are considered to be abusive behaviour.