What is an agreement?

“Agreements” are agreements of any form, linked between undertakings, with or without binding force, decisions or recommendations of groupings of undertakings, as well as concerted practices between undertakings operating at the same level, thus horizontal agreements or at different levels agreements, thus vertical market agreements.

Types of agreements

Horizontal agreements: are those agreements that are linked between competing undertakings (between producers and wholesalers) operating at the same economic level. Vertical agreements: are those agreements which are linked between undertakings operating at different market levels.

Prohibited agreements

All agreements which have as their object or consequence the prevention, restriction and distortion of competition in the market shall be prohibited, in particular agreements which:

- set, directly or indirectly, the purchase or sale prices, or any other terms of trade limiting or controlling production, markets, technical development or investment;
- share markets or sources of supply;
- apply different conditions to the same transactions with other trading parties, placing them at a disadvantage;
- make the conclusion of contracts subject to acceptance by other contracting parties of additional obligations which, by their nature or by their commercial use, are not related to the object of those contracts.

Exemption of agreements

The types of agreements benefitting from the exemption are set out in Article 5, point 1 of the law “On Competition Protection” that specifically includes specialization and rationalization agreements, research and development agreements and joint purchase agreements. These kind of agreements make it possible to achieve economic efficiency.

Conditions of exemption

An agreement is accepted only when its negative effects on competition are less than positive. The agreement should contribute to the improvement of production, production distribution or promotion of technical or economic progress; consumers should receive an equal share of the benefits derived. The agreement should not give the parties the opportunity to eliminate competition in respect of the essential part of the production concerned. Horizontal agreements, in particular agreements which have as their object or effect the rationalization or specialization of economic activity, the research and development of products or processes, the joint purchase or sale of products from and from a single source, may be excluded from the prohibition of provided for in Article 4, on account of economic efficiency. Vertical arrangements may be exempt from the prohibition provided for in Article 4 of this Law because of economic efficiency. License and sale agreements for industrial property rights may be exempt from the foreseen prohibition if: the commercial freedom of the purchaser, licensee or other undertaking is not unduly restricted and competition in the market is not severely restricted.

Procedure for exempting agreements from prohibition

Pursuant to Articles 5, 6 and 7 of this Law, horizontal agreements, vertical agreements, license agreements and amendments thereto shall be notified to the Authority. Pursuant to Article 49 and 50 of the Law, the time limit for considering the notification shall begin to be calculated with the receipt of all information from the Authority to be provided by the undertakings in the notification form. If the notification is not complete and accurate, the Authority shall notify in writing within 15 days of the receipt of the notification, the parties making the notification or their representatives to complete it. The notification shall be effective only on the date on which the Authority receives accurate and complete data. The time limit for the completion of such data required by the Authority shall be 30 days, starting from the date of notification by the Authority. In case of non-compliance with the deadline, the sanctions provided for in Article 73, paragraph 1, letter b and d of the Law shall apply. In the notice, inaccurate, incomplete or misleading data will be subject to the Law as follows: Pursuant to section 73, point 1/a and e of the Law, inaccurate, incomplete or misleading data may make the party or parties making the notification responsible for imposing penalties up to 1 percent of the total turnover of the previous financial year. Pursuant to Article 51, point 1/c of the Law, the Commission may revoke or change its decision concerning the exclusion from the prohibition of agreement.

Why are cartels harmful to the country’s consumers, businesses and economy?

Cartels and similar restrictive deals make up the most serious market distortions. Cartels are harmful to consumers and society as a whole due to the fact that companies that participate in a cartel place higher prices (thereby obtaining greater profits) than in a competitive market.

What are the consequences of not announcing an agreement?

Procedures for obtaining an exemption: To obtain an exemption from the prohibition under Articles 5 and 7 of the Law on Competition Protection, undertakings must notify the form, content and scope of the agreement to the Albanian Competition Authority (Article 49 of the Law on Competition Protection). Horizontal and vertical agreements provide for an exemption decision, whereas for license agreements the exemption is considered granted if the Commission does not make a decision within a period of three months (Article 50 of the Law on Competition Protection). It should be noted that the undertakings are not obliged to notify the agreements concluded between them. The notification is only one condition for obtaining an exemption from prohibition. The consequences of the notification are the protection from fines, exemption from prohibition from the date of the notification, which means that the agreement is valid. The parties may seek their execution. If the exemption is rejected, the agreement is void from the beginning.

Leniency

An undertaking, involved together with others in a prohibited agreement, under Article 4, may be granted leniency, in whole or in part from fines, if it helps to discover and prohibit the prohibited agreement, as well as the designation of the responsible persons, providing data not previously held by the Authority. The Commission gives advice to undertakings for leniency, also indicating the conditions for its application, as set out in the “Regulation for fines and leniency”. This advice is transmitted to undertakings and is not published. In case of a decision, the Commission may grant leniency commensurate with the contribution made to the discovery, detection and detention of the infringement, if the conditions set out in the leniency advice are fulfilled.

Why is leniency offered?

It is widely accepted that cartels have the most detrimental effects on consumers and the entire economy. This means that the Albanian Competition Authority has a particular interest in ensuring their detection and breach. The Albanian Competition Authority has in its provisions considerable investigative power under the law of pursuing a complaint, or the personal suspicions that a cartel is operating. The leniency programme will provide the Albanian Competition Authority with the information it needs to do an effective work.

What does the program contain for Cartel members?

When a breach of the law involves Cartel activities, the fines can amount up to 10% of an undertaking’s annual turnover. Through the leniency programme, Cartel members can partially reduce their financial penalties or avoid them altogether. Therefore, the leniency programme gives them a real incentive to provide information.

What kind of activity is involved?

For the purposes of the leniency programme, the term “Cartel” or “Cartel Activity” is used for agreements between undertakings, decisions of associations of undertakings or concerted practices that violate the law and include: -Price fixing -Production restriction or quota setting -Market segmentation

What kind of form does a leniency have?

Leniency can be complete or partial. Total immunity from financial punishment. Total immunity is valid for that cartel member who first presents valuable information. Immunity is automatically obtained when information is provided before the Albanian Competition Authority has launched an investigation and the Authority does not have sufficient evidence to prove that this cartel exists. The following conditions must also be met: The undertaking should: Provide to the Authority all information, documents and evidence available, concerning the existence of a Cartel activity; Have full and continuous cooperation throughout the investigation; To not be the initiator or leader of the Cartel and to not have requested others to join the Cartel; and No longer be included in the cartel as soon as it makes information available. Significant reductions in (fines) penalties Up to 50% fine reductions are possible in two cases: When it is not the first to bring the information When the undertaking does not qualify for total immunity In both cases the undertaking must qualify for a fine reduction: Provide to the Authority all information, documents and evidence available concerning the existence of a Cartel activity; Have full and continuous cooperation throughout the investigation; No longer be included in the cartel as soon as it makes information available. Inclusion in other cartels. The programme also provides an incentive for cartel members to provide information on any other cartel in which they may be involved. If they are currently collaborating on a cartel investigation and provide information enabling them to gain total immunity for a second cartel, they may benefit from a further reduction in the fine to be applied to the first cartel.

How can I apply for leniency?

Applications for leniency under the programme must be made to the Albanian Competition Authority. Once an application is received, a decision must be made by the Competition Commission on whether an undertaking qualifies for leniency. The application must be made by a person who has the power to represent the undertaking for this purpose.

Will my identity be revealed to other members of the Cartel?

Any undertaking that wishes to benefit from the leniency programme may be concerned that other cartel members may suspect that it has voluntarily provided information to the Albanian Competition Authority. For this reason, the Albanian Competition Authority will, whenever possible, endeavour to keep the identity of this undertaking confidential throughout the investigation.

Ankese

    Ruani Privatësin
    PoJo

    Të dhënat tuaja do të trajtohen me konfidencialitet të plotë sipas ligjit nr.9887, datë 10.03.2008, 'Për mbrojtjen e të dhënave personale', i ndryshuar.