UNFAIR COMPETITION: NEW RULES

First of all, we hope you had a great holiday and we wish you a very good comeback… We begin our first article with a brief presentation of the main legal changes referring to unfair competition.

During summer, Law no. 11/1991 on unfair competition was amended by Government Ordinance no. 12/2014 and at present all changes brought to this law have entered into force.

The amendments brought to Law no. 11/1991 on unfair competition focused mainly on: the definition of certain terms in this domain, the attributions and the procedure to be complied with before the Competition Council, infringements, as well as the creation of a new body: the Inter-institutional Council for the combat of unfair competition (for defining and implementing public policies regarding unfair competition).

Definitions

Law no. 11/1991 defines fair competition as a rivalry situation on the market, in which each company simultaneously tries to achieve sales, profits and/or a market share, by offering the best practical mix between price, quality and related services, while complying with the fair practice and the general principle of good faith.

On the other hand, unfair competition represents a company’s commercial practices violating fair practices and the general principle of good faith; such commercial practices cause or may cause damages to the market participants.

These two definitions use terms which are also defined by the Law and which have to be known in order to assess a Company’s conduct in relation to another Company, namely: (i) correct practices = a set of generally known practices and rules applicable to commercial relations between companies, in order to prevent the violation of such companies’ legitimate rights and (ii) commercial practices = any conduct, namely action, omission, endeavor or commercial communication, including advertising and marketing, made by a company in relation to the promotion, sale or supply of a product.

Unfair Practices and Their Sanctions

Law no. 11/1991 also provides a set of practical examples of unfair competition, namely: (i) denigrating a competitor or its products/services and (ii) diverting customers. The sanction for these infringements is a fine between 5,000 lei and 50,000 Lei for legal persons and between 1,000 Lei and 5,000 for natural persons.

Moreover, the following infringements are punished by imprisonment between 3 months and 2 years or with a fine:

1. Using a company name, a logo or a packaging which may be confused with those legitimately used by another company;


2. Using confidential information submitted to authorities regarding elements of pharmaceutical products, for commercial purposes;


3. Disclosing, acquiring or using trade secrets, thus affecting a company’s activity;


4. The production, import, export, storage, sale of products and services bearing false inscriptions regarding inventions, trademarks, designs, industrial models, origins and other types of intellectual property, in order to confuse traders and beneficiaries.

Procedure For Sanctioning Unfair Practices

The victim of unfair practices may submit an application to the Competition Council in order to put an end to such practices, to acknowledge and to sanction the infringement represented by unfair competition. In this respect, the victim must provide evidence of the legitimate interest of submitting such an application and to prove the risk of damage. If it is not appealed, the Council’s sanctioning decision is an enforceable title. Moreover, it has a probative value with respect to unfair practices. On the other hand, there is also the possibility to file a legal action for unfair competition.