- Moldovan Competition Law Reformed and Aligned to EU Standards
- September 10, 2012
- Law Firm: Turcan Cazac Law Firm - Chisinau Office
Chisinau, Moldova - Following a lengthy process of public consultations and parliamentarian debates, the Competition Law (the "Law") was finally adopted by the Parliament on 11 July 2012.
The adoption of the Law represents a national priority and a development goal of the Republic of Moldova, pursuant to the National Development Strategy for the years of 2008-2011. Moreover, this Law was adopted following the external commitments undertaken by the Republic of Moldova and intends to align the internal state aid provisions to the EU legislation on Competition Law.
Many of the provisions of the Law, which is in fact an extensive document, comprising about 100 Articles, are a novelty for Moldova and shall form the basis for a brand new administrative practice and case law.
The Law applies to natural persons and companies registered in Moldova or in foreign countries that, by their actions or inaction, restrict, prevent or distort competition. Such actions may be performed on or outside the territory of Moldova, if they create or may create effects in Moldova.
Similar to EU competition law, the Law regulates in great detail such areas as antitrust, unfair competition and mergers.
Antitrust: In antitrust, such notions as tough cartels and anti-competitive agreements of minor importance have been introduced. Regarding dominant positions, the former presumption of dominance when holding 35% of the shares on a relevant market was substituted to holding 50% of the shares. In addition, there is a separate chapter of the Law regulating the method of determination of the relevant market.
Unfair Competition: Unfair competition refers now to such acts as discrediting competitors, taking over competitors' clients, incitement of another company to terminate its contract with the competitor, and other.
Mergers: This area is also newly regulated by the obligation of the merging companies to obtain, prior to the merger, the permission of the Competition Authority, if the cumulative turnover of the merging companies exceeds 25 million MDL for the year prior to the merger and if there are at least two merging companies each of which had a total turnover that exceeds 10 million MDL for the year prior to the merger.
Fines: Following the adoption of the Law, any breach of the Law shall trigger, other that the already existing criminal penalties and penalties for petty offenses, the imposition by the Competition Authority of fines and penalties for the breach of material and procedural provisions of the Law. The fines and penalties are quite heavy, varying from 0.1% to 1% (for procedural breaches) and 0.5% to 10% (for material breaches) of the total turnover of the breaching company for the year preceding the breach.