Legal Update: New Law on Protection of Competition enters into force

On 13 May 2022, the Assembly of Kosovo approved Law No. 08/L-056 on Protection of Competition (the “Law”), thereby abolishing the old Law, which was in force from October 2010. The newly approved law aims at a larger approximation of this legal framework to the EU Rules on this matter, as well as an increase in the efficiency of the Kosovo Competition Authority (KCA).

To deliver on its aim of promoting competition between enterprises, the Law disables any type of domination or manipulation from any strong enterprise. While the gist of the provisions set forth by the abolished Law remains the same, the updated provisions contribute to a free functioning, competitive market to a higher degree. In particular, cartels and other anti-competitive practices as well as the misuse of a dominant market position are expressly prohibited.

Whereas the KCA is to provide administrative instructions on the specific types of anti-competition practices and respective following details, the scope of what defines each of those practices is stipulated in the Law, and it is almost identical to the previous law. Nonetheless, among others, the new Law has modified the conditions required to be completed by enterprises in their attempts to achieve concentration. In accordance with the new law, the participants in the concentration must either have a total turnover of over twenty (20) million Euros in the international market with one concentration participant having a turnover of over one (1) million Euros in the domestic market; or at least two (2) concentration participants should have over three (3) million Euros turnover in the domestic market.

In order to promote anti-competitive practices, the Law has foreseen fines as penalties for noncompliance of Kosovar enterprises to such requirements. While these provisions slightly differ from the penalties imposed with the previous law, they are in complete compliance to the EU Regulations for this matter. Within the framework of these fines, a distinction is made: In the case of a serious offense, up to 10% of the total turnover realized worldwide in the last year for which the financial report has been concluded, must be paid as a penalty. Regarding minor offenses, the penalty is up to 1% of that value.

In addition to initiating a competition-protecting procedure ex officio, the Authority can initiate such a procedure on the basis of a proposal from any natural or legal person, professional association, the association of enterprises, the association of consumers, the Government, and a central or local public administration body.

Thus, the Law imposes serious financial consequences upon enterprises committing such breaches of these provisions, whereas it recognizes the competence of the KCA to ascertain such breaches and respectively impose fines. While the party determined to be in breach by the KCA, cannot appeal any decision of the KCA, it can initiate an administrative dispute with a lawsuit against the majority of the KCA decisions.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.