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Reforming enforcement of competition rules in Estonia

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As of the beginning of 2015 abuse of dominant position, enforcement of a concentration without approval or which damages competition, and failure to perform obligations of companies in control of essential facilities are no longer punishable as criminal offences in Estonia. Previously all of the referred competition law breaches were punishable as criminal offences in the instance of a repeated offence (ie prior misdemeanour punishment was required). As of this year these breaches remain punishable only as misdemeanour offences. Their decriminalisation was part of penal code reform undertaken in Estonia. Unfortunately the reform stopped half way with regards to competition law offences and as a result prohibited agreements, decisions and concerted practices (both vertical and horizontal) are still punishable as a criminal offence (with no prior misdemeanour punishment being required). More information on the penal code reform is available here and readers may also be interested in reading the Estonian Competition Act or the Estonian Penal Code.

Both market participants and legal practitioners advocated for the full decriminalisation of all competition law offences and you can read more about the opinions of different interest groups online. Please see the entries dated 21.01.2014 for the opinions of the Estonian Employers’ Confederation (Eesti Tööandjate Keskliit) and the Estonian Chamber of Commerce and Industry (Eesti Kaubandus-Tööstuskoda).The main concern is that a criminal sanction (eg up to three years imprisonment in the case of individuals) is an extreme and severe consequence for actions which the individual and/or company involved may not have understood to be a breach of competition rules due to their complexity. Also, criminal proceedings are evasive, time consuming and stigmatising even in cases where no conviction follows.

However, several state authorities were concerned that the powers of the Estonian Competition Authority in administrative supervision procedure and misdemeanour procedure would not be sufficient to ensure effective enforcement of competition rules as required under Regulation 1/2003. Please see the entry dated 26.05.2014 at the homepage of the Estonian Parliament for the opinion of the Estonian Competition Authority (Konkurentsiamet). As such the criminalisation of prohibited agreements, decisions and concerted practices stands.

The Estonian Ministry of Justice was tasked with further analysis on possible alternative procedures which are more akin to the powers and procedures of the Commission under Regulation 1/2003.  As work is still continuing it remains currently unclear whether and what further changes could be expected in the enforcement of competition rules in Estonia.

Read a sample Estonian case report on OCL as well as further reading on the offences, both criminal and otherwise, referenced in this article.

Image: By Riigikantselei [Public domain], via Wikimedia Commons

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