about us | newsletter | contact | archive | members area
Bogdan Nitulescu, Tremend
Cryptocurrencies volatility is a big problem»
  Features:      COUNTRY FOCUS   |   SECTOR ANALYSIS   |

No escape from the fair deal

From catching scheming hoteliers, probing petrol stations to opening up the notary market, President of the Competition Council Bogdan Chiritoiu talks cartel-busting to Ana Maria Nitoi

November 2009 - From the Print Edition

Last June sleepy spa resort for sick pensioners Baile Olanesti in Valcea county was rocked by the arrival of Competition Council’s inspectors, as they swooped down in a raid on seven hoteliers.
The businesses were suspected of having made some understandings between one another to bid separately for public tenders subsidising hotel rooms for pensioners.
One company, Olanesti Riviera, received a 23,000 Euro penalty for refusing to allow inspectors to check its documents and emails. Meanwhile another, Sind Romania, was penalised with 13,000 Euro for attempting to destroy documents during the inspection.
“Usually multinationals to do not resist our searches, while smaller companies, who do not understand what the Competition Council does, make attempts [at a cover-up] like in Baile Olanesti,” says Bogdan Chiritoiu, the president of the Competition Council.
From large corporates to two-star hoteliers, the Competition Council inspectors have great liberty when investigating a case of a possible cartel. They can ask for any information regarding the investigation from the companies involved and, if they are refused, the penalties are high. The Council can also use a surprise inspection at the same time at different companies or at several locations of the same firm – a dawn raid. “Generally, we do a maximum of one inspection per case and it is then when we put our hands on the most significant information,” says Chiritoiu.
Now the Council is working on 45 major investigations into a possible breach of competition law. From these, 14 have been opened in the last five months since Chiritoiu became president.
Speeding up the process of probes is his priority. “When I came here I found that some investigations had been open since 2004, which is unacceptable and I have to reorganise measures to get things moving faster,” says Chiritoiu.
The average in the EU for finalising an investigation is between 16 and 18 months, while in Romania this is almost two and a half years. For cases older than two years, Chiritoiu has changed or replaced the investigation heads to bring a new perspective.
One large-scale investigation, started more than four years ago, is examining whether there were understandings between companies regarding the prices of petrol products. Last September the Council decided to search the offices of the six largest petrol retailers in Romania - Petrom, Rompetrol, Lukoil, Mol, OMV and Agip. This investigation is still ongoing.
Recently one decision ruled in favour of Greek mobile operator Cosmote’s purchase of Saudi Arabian rival Zapp in Romania. “In principle we agree with the idea of the consolidation of a third actor [Cosmote] in a sector where there are already two very strong players [Orange and Vodafone],” says Chiritoiu.

Trial hold-up

But an obstacle to the council is that most penalties are contested in court, with a trial lasting up to three years. The council is trying to promote a modification of the competition law by the beginning of 2010. “We want to introduce a highly used practice in the EU - clemency - meaning that if a company recognises its fault during an investigation, it is forgiven, while the second firm that comes to us and admits its guilt benefits from a reduction in the penalty,” says the president. This should encourage evidence gathering. If a penalty is up to ten per cent of the turnover of a company, the Council could cut by 50 per cent the penalty. This change depends on whether MPs will pass the new legislation.
The role and number of notaries in the real estate sector are also under analysis, where the Council has recommended changing legislation to encourage competition. Now there is a limited number of notaries allowed to operate on the market. In addition, they are not allowed to promote their services. The Council wants to enlarge their number and facilitate competition by allowing them to advertise. The hope is that this will bring down their fees. “We estimate that about 300 million Euro every year could be saved to the benefit of consumers if our recommendations are put in place,” says Chiritoiu.
The president’s approach is more about prevention than punishment. “My goal is to encourage competition in Romania by finding faults in the legislation and make recommendations to modify this,” he says, “rather than enforcing the competition law by imposing sanctions, without solving the core problems.”



COMMENTS
There are 0 comments:

 
ADD A COMMENT
 
Name
Email
Comment
Validation Code
   
 
 

0 Comments  |  13596 Views
Daily Info
Smart city is not a fad, it's a necessity

In June 2018, the ranking of the most "smart" cities in the world was published. In other words, the most advanced cities in terms of human capital, social cohesion, the econo...

Ondrej Safar, CEZ Group: "Romania can become a hub for international smart solutions providers"

"We are already in the digital age, so the upward trend of implementing smart solutions is inevitable in all areas," he tells The Diplomat-Bucharest. "Especially in terms of u...

Telekom Romania, a strong supporter of Smart City development in Romania

Just like many other countries in the world Romania is now facing an unprecedented growth of the urban population, which can be both beneficial and detrimental for the society...

In the industrial era, the fight was for finite material resources. Not anymore

Now organizations fight and develop themselves for and around their talent. In a nutshell, getting ahead in today's business world is all about attracting and inspiring an e...

Richard Sareczky, Mol Limo: "We look at expansion locations across CEE including Romania"

Consumer mobility behaviour is changing, leading to up to one out of ten cars sold in 2030 potentially being a shared vehicle and the subsequent rise of a market for fit-for-p...

 
 
   
advertising

advertising

advertising

More on Features
Romanian business - Flexibility and agility in a high-potential market

It's anniversary time, with Romania celebrating its national day at a time when its image is coming into serious question at an international level. This month is also an a...

1 Comment

Smart city is not a fad, it's a necessity

In June 2018, the ranking of the most "smart" cities in the world was published. In other words, the most advanced cities in terms of human capital, social cohesion, the ec...

1 Comment

Telekom Romania, a strong supporter of Smart City development in Romania

Just like many other countries in the world Romania is now facing an unprecedented growth of the urban population, which can be both beneficial and detrimental for the soci...

1 Comment

In the industrial era, the fight was for finite material resources. Not anymore

Now organizations fight and develop themselves for and around their talent. In a nutshell, getting ahead in today's business world is all about attracting and inspiring a...

1 Comment

True hospitality in Bucharest

Interview with Lior Bebera, General Manager InterContinental Bucharest

1 Comment

Richard Sareczky, Mol Limo: "We look at expansion locations across CEE including Romania"

Consumer mobility behaviour is changing, leading to up to one out of ten cars sold in 2030 potentially being a shared vehicle and the subsequent rise of a market for fit-fo...

2 Comments

Ondrej Safar, CEZ Group: "Romania can become a hub for international smart solutions providers"

"We are already in the digital age, so the upward trend of implementing smart solutions is inevitable in all areas," he tells The Diplomat-Bucharest. "Especially in terms o...

1 Comment