The Competition Council of Romania has recently presented the Annual Report for 2015, when they completed 21 investigations in important fields such as electric energy, fuels and telecommunications. They imposed fines amounting to almost 54 million euros, by 30% more as compared to 2014. Actually the Competition Council sanctioned 202 entities in 2015. At the same time, they initiated investigations into several serious cases of anticompetitive practices, 62% of the new procedures initiated targeting possible cartels or abuses of dominance.
The president of the Competition Council, Bogdan Chiriţoiu, spoke more on this issue in an interview on Radio Romania: “It was a busy year for the Competition Council of Romania, but that is normal for us. Unfortunately, we continue to discover many law infringements and we had to impose many fines, we reported the largest number of fines in our existence, amounting to more than 50 million euros. The most serious case was the agreement between Hidroelectrica and its customers, the companies that bought electricity, the so- called ‘smart boys’ in the energy field. That was our most important case in 2015, the total amount of fines being 35 million euros all in all. Besides energy contracts, we also investigated the Romanian Post on which we imposed a fine of 8 million euros. 2015 was also a year when we had important cases in court, because it is not enough for us to impose sanctions, we also have to convince the court that we were right. In 2015 and in the early 2016 we finalized all the cases initiated, among which the case in which we applied the biggest fine to fuel-trading companies. We fined them with 205 million euros in 2011. After 5 years’ trials, we won all of them with an important reduction of sanctions, a reasonable one I’d say. We won the trial against all the 6 companies involved, the fines were reduced by 20%, amounting to 160 million euros.”
Bogdan Chiriţoiu also referred to the ongoing investigations: “This year we have already finalized an analysis of the Bucharest cable TV transmission market. We are trying to make the Net City project, which is a good project, develop in a competitive framework so that prices charged to the Net City customers and eventually to households, to consumers should not be too high. I believe if we manage to do this, we’ll strike a balance on the market. We’ll have a well-functioning Net City, at a reasonable price for Bucharesters, which could be a model for other cities of Romania as well, cities considering that type of solution. We have three files, which we are discussing with the European Commission, together with the government, so as to make sure that we are observing the European rules. At the same time, we are trying not to stifle viable companies, but to help them get restructured, remain on the market in a smaller but sustainable form. I am talking about the Oltchim chemical aggregate works in Ramnicu Valcea. We hope we’ll manage to finalize its restructuring this year and get it privatized. A more complicated file is that of the Hunedoara Energy Compound. It is a company that reported losses of about 1 billion euros, which were nevertheless cleared several years ago. So we need to find a way to stop wasting the public money. Another worrying case is that related to CFR Marfa- the Freight Division of the Romanian Railway Company, which again is a company whose debts were wiped out in the past, debts of hundreds of millions of euros. The company incurred further debts and again we need to work out solutions in this case too.”
Attending the presentation of the 2015 Annual Report by the Competition Council, the Deputy Prime Minister Costin Borc pointed out that the Economy and Finance Ministries were working on a state-aid scheme for smaller projects: “We are preparing a new state-aid scheme involving smaller amounts of money, but probably there are investors that can promote smaller projects of local interest. Along the years, the state and the companies with a majority state-owned capital may have had an anticompetitive attitude. We are trying to shed light on those aspects that did nothing but complicate even more the situation of certain companies that are today facing insolvency or are on the verge of insolvency.”
Another scheme for supporting renewable energy has been considered by the relevant ministry. So, the Romanian state should put in place the scheme from the perspective of both the market competition and the consumers who pay money for services.
Corina Popescu is state secretary in the Energy Ministry: “In 2010 Romania defined one of the most attractive schemes for supporting renewable energy at European level. In only 4 years we had almost 5,200 Megawatts worth of power installed for an average consumption of 6,700 up to 7,000 MW. We had a very fast development of this sector that required support from the Romanian state. Today we are in a strange situation, all investors contesting it. The state should have its own surveys made, should provide documents showing the degree of support needed, so as to be able to define the scope of this support scheme.”
The president of the Competition Council, Bogdan Chiriţoiu, also added that the project called ‘The Price Monitor’, a site that will show the prices charged by the main retailers trading products included in the population’s daily basket, was already being tested and it would be ready in several months’ time. The site will be available only for the capital Bucharest.