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New Law on Protection of Competition

New Law on Protection of Competition

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Another milestone towards the approximation of the legislation with the EU Acquis has been completed by Kosovo. The new Law No. 08/L-056 “On the Protection of Competition”, entered into force on 22 June 2022. The Kosovan legislators in the drafting of the new law benefited from the technical assistance of EU funded project “EU support for the Kosovo Competition Authority and State Aid Commission.

The approval of this new piece of legislation aims among others to fulfill key commitments of Kosovo under three treaties ratified by Kosovo, such as (i) EU – Kosovo Stabilization and Association Agreement, the Energy Community Treaty (Athens Treaty), and Central and Eastern European Free Trade Agreement (CEFTA).  The Law on Protection of Competition has introduced significant changes that align Kosovan competition legislation with EU competition legislation and standards.

The new Law has territorial and extraterritorial effect regarding the prevention, restriction, and distortion of competition from enterprises within territory and outside territory of Kosovo, if their acts affect the Kosovo market.

Comparing to the repealed legislation, the provisions of the new Law improved definitions for concepts of prohibited agreements and exemptions from such agreements allowed by the Kosovan Competition Authority, group exemptions and agreements with minor importance (de minimis agreements). In this regard one of the novelties introduced are group exemptions agreements that will automatically benefit exemptions from prohibited agreements, in several industries, regardless whether the enterprises operate in horizonal or vertical level, such as: (i) research, development and specialization agreements; (ii) agreements for transfer of technology; (iii) agreements for the distribution and servicing of vehicles; (iv) insurance agreements; and (v) agreements between enterprises in the transport sector.

The Kosovo Competition Authority is obliged to adopt secondary legislation for determination of categories and detailed conditions of agreements that will benefit exemptions from prohibited agreements.

Another change related to the presumption of the dominant position in the market. The threshold of market share has been increased from 25%  to 40% of market share for individual enterprise, whereas the threshold of independent economic enterprises has been increased from 40% to 60% of joint market share.

The new Law introduced changes in the thresholds of turnover of undertakings that triggers requirement for obtaining clearance from the Kosovo Competition Authority. Clearance must be obtained when participants in the concentration have a total turnover of 20 million Euros in the international market and one concentration participant has a turnover of 1 million Euros in the domestic market. This new definitions ensures clarity for the market players compared to the previous law that lacked definition of the threshold of the participant in the local market and based the obligation for clearance on the international market turnover above 20 million Euros and just the presence in the Kosovan market, even if the presence was insignificant.

Further to this another important novelty is introduced with Article 18 of the new Law on Protection of Competition. The concertation will be considered as permitted in case the Authority based on the documents and data submitted by the applicant or on the knowledge it possesses, considers that the intended concentration does not lead to creation or strengthening to dominant position, or such authority has not issued the conclusions for initiation the procedure for assessment of the concentration within thirty (30) days after receiving the full application for permitting the concentration. Based on these criteria the participant may request the Authority to certify the concentration and the authority is obliged to reply within 7 days from the request.  This new mandatory terms shortens the procedure for obtaining the certification, compared to the repealed law that obliged the participants to wait for the decision of the Authority, even in cases when the assessment procedure was clearly not necessary.

Changes are effected also to the enforceability of the decisions of the Kosovo Competition Authorities and to right to raise civil claims.

According to the repealed legislation, the enforceability of decisions of Kosovo Competition Authorities has been subject of suspension until the court renders final decision, in case that legality of such decisions has been challenged before the court. This has now been changed, and the decisions of the Kosovan Competition Authority are enforceable regardless of if they are challenged before the court, unless the court suspends the enforceability of such decisions through interim reliefs. 

Lastly, the new Law on Protection of Competition provides expressly the entitlement for claiming civil damages by parties impacted by established infringements of the Law. The repealed legislation was silent in this regard.

The added clarity provided by the new Law will facilitate the participants in the transactions affecting the Kosovan market and the authority itself in the clearance procedures. The fast approval of the missing secondary legislation is another important step to be completed that will make an additional positive impact in the protection of the competition in the Kosovo market.

By Ardian Rexha, Legal Manager at Deloitte Kosova, and Vegim Kraja, Senior Legal Associate, Deloitte Legal

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