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08 July 2010
In recent years the status of the Competition Protection Office has been the subject of lively public debate. Since its establishment in 1994 the office has been organized as a department within the Ministry for Economic Affairs. While the office was (formally) independent when it came to making decisions in individual cases, the government still enjoyed a certain degree of influence over the office's enforcement agenda - most notably, through government appointment and recall of its director. Consequently, many scholars and practitioners have argued that only a Parliament-based appointment of the office's decision-making panels and a fully fledged formal separation from the ministry would enable the office to gain de facto independence from political influence (the risk of which - in view of the ongoing privatization process in Slovenia - was, and still is, present). A similar view was expressed by the Organization for Economic Cooperation and Development during Slovenia's accession procedure.
After years of discussion, it seems that a new development may be on the cards. In June 2010 the Ministry for Economic Affairs adopted a proposal for an Act on the Establishment of the Slovenian Agency for Protection of Competition and Consumers.
If the new act finds sufficient support with Parliament, it will bring about several interesting structural changes:
The first two changes have mostly been welcomed by the interested public. However, the third change (ie, partial financing through fines) is stirring up some controversy. Since the agency will be able to impose turnover-based fines for infringements of competition law (up to 10% of the incumbent undertaking's group turnover in the preceding year), many fear that this provision will create an undesirable incentive for the agency always to go for the highest fines possible rather than to seek constructive solutions (eg, the termination of proceedings in certain borderline cases by accepting commitments of the incumbent undertakings) in cases where such solutions would be appropriate.
While the new act predominantly deals with structural and organizational issues, it also brings about an interesting procedural instrument which will be welcomed by practitioners. At present, the Competition Protection Office has complete discretion over the initiation of investigation proceedings into possible infringements of competition law and is not obliged to react to complaints by market participants. If Parliament adopts the new act, individuals and undertakings that have lodged a complaint with the agency will be able to cause compulsory summoning of the Competition Council if they can demonstrate the following two points: (i) a likelihood of a breach of competition rules; and (ii) that the agency has failed to decide on the opening of proceedings within two months of the submission of such complaint.
It is expected that the draft act will be confirmed by the government in July 2010 and submitted to Parliament in September 2010.
For further information on this topic please contact Vid Kobe at Schönherr Slovenia in cooperation with Filipov Petrovic Jeraj in partnerji op doo by telephone (+386 1 2000 980), fax (+386 1 4260 711) or email (firstname.lastname@example.org).
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