Main Principles of the Competition Authority in Albania

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Main Principles of the Competition Authority in Albania

Main Principles of the Competition Authority in Albania

The Competition Authority is a public institution that effectively interacts with the protection of competition in Albania to serve the public interest.

The Competition Authority relies on three main pillars, which are:
1. Prohibited agreements (cartels);
2. Abuse of a dominant position;
3. Mergers or concentrations of enterprises;
In addition to these three main points, CA relies on protecting consumer interest and the evaluation of normative acts that affect fair competition. The Law “On Protection of Competition” serves as a kind of mechanism that gives every individual the right to defend his interest to go to the Administrative Court of Tirane through a lawsuit or to complain before
a) appoint, directly or indirect, purchase or sale prices, or any other trading conditions;
b) restrict or control production, markets, technical development, or investment;
c) share markets or sources of supply;
d) in trade relations with other parties, apply different conditions for the duplicate transactions, placing them at a competitive disadvantage;
e) condition the conclusion of contracts with the acceptance by other contracting parties of additional obligations that, by their nature or commercial use, are not related to the object of these contracts.

As in Article 101 of the Lisbon Treaty, in our law, Article 5 makes some exceptions when these agreements are exempt from the application of point 1 of Article 4, providing for mitigating or exceptional circumstances. Provision 5 of the law on the protection of competition clarifies that any agreement which gives in improving the production or distribution of products or the promotion of technological or economic progress if a good part of these benefits goes in favor of the customers of customers and when:
1. Does not contain restrictions on the activities of participating enterprises, which are not necessary to achieve the above objectives;
2. Does not significantly restrict competition about the products or services subject to these agreements.”

Also, Article 6 of the Albanian law stipulates that “The Commission approves regulations for the categories of agreements that are exempted from the prohibition provided in point 1 of Article 4. These regulations define in detail the conditions that must be met by the agreements to benefit from the exemption of the prohibition provided for in point 1 of Article 4.”

While article 7 has provided for those exceptions to agreements of minor importance. Article 7 provides as follows: “Those agreements which do not significantly restrict competition in the market may be excluded from the application of point 1 of Article 4, if the market share of all undertakings together participating in this agreement, does not exceed:
a) 10 percent of the relevant market, where participants are current or potential competitors;
b) 15 percent of the relevant market, where participants are not current or potential competitors. ”

As a result, Albanian law has used the same strategy and policy as the European Union. About those agreements of provisions 5,6,7, these should not harm free competition and should be open agreements; this is provided in Articles 49 and 50 of the Law “On Protection of Competition.”
Below, Chapter II of the Law includes Articles 8-9, which provide for the abuse of a dominant position held by an enterprise in the market. Article 8 focuses on the assessment of a dominant position in the market, taking into account:

The dominant part of one or more undertakings is assessed taking into account, in particular: ”
a) the relevant market share of the undertaking or undertakings under consideration and of other competitors;
b) barriers to entry into the relevant market;
c) potential competition;
d) economic and financial power of enterprises;
e) economic dependence of suppliers and buyers;
g) the countervailing power of the buyers;
h) development of the distribution network of enterprises and opportunities for the use of product resources;
j) economic relations with other enterprises;
l) other characteristics of the relevant market such as homogeneity of products, market transparency, uniformity of cost and size of enterprises, stability of demand, or free production capacity. ”

This provision is also compatible with Article 102 of the Lisbon Treaty. Also, in condition 9 of the law, “On Protection of Competition” is done the same way with article 102 of TL. Article 9 defines as abuse the dominant position by one or more enterprises, which hold this position in the market, in cases when it is performed:
“a) the imposition, directly or indirectly, of unfair purchase or sale prices or other unfair trading conditions;
b) restriction of production, markets, or technical development;
c) the application of unequal conditions for the duplicate commercial transactions with the parties, placing them at a competitive disadvantage;
d) setting the conditions for concluding contracts with other parties, so that the latter accept additional by their very nature or according to commercial practices, are not related to the object of the contracts in question.”

The legal basis of the third pillar of the CA, which deals with the control of concentrations or mergers between enterprises, is provided in law no. 9121 “On the protection of competition,” in a Regulation “On the implementation of the procedures of concentration of enterprises” and an Instruction “On the form of notification of concentration and the possibility of simplified notification.”

The Competition Commission has the exclusive competence to control the concentrations. This is determined based on the participating enterprises’ annual turnover limit, which should be over ALL 70 billion at the international level and ALL 800 million at the national level. Concentrations at the national level must notify the Competition Authority to obtain the Competition Commission’s relevant authorization in advance of their implementation. More detailed information on the manner of notification and the appropriate form is determined based on the “Regulation on the implementation of enterprise concentration procedures.”

Also, on the other hand, the Judicial practice in Albania has significantly increased compared to previous years. This has also improved the procedure followed under secret agreements, which includes:

1. Investigation by certain working groups and investigative report;

2. Report of the Secretary-General on the investigative report;

3. Claims of the companies under investigation at the hearing;

These data reflect that during 2018 in the Republic of Albania, the Competition Authority institution was more effective and efficient in matters affecting prohibited agreements, ensuring free competition within the market. During these years, one of the most sensational issues has been Vodafone-Telecom in 2017, which is found below more concertized.

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