Amendments to the Prevention of Restriction of Competition Act (the "Competition Act"), which entered into force on 24 October 2015, seek to simplify Slovenian's legislation regulating unfair competition. These amendments do not substantially change the competition (i.e. anti-trust and merger control) rules, but rather the purpose of the amendments is to transfer the existing rules on unfair competition from one legislation i.e. the Protection of Competition Act of 1993 to the more recent Competition Act. The main changes introduced are as follows:
- only provisions that govern the relationship between companies in respect of functioning of the market and unfair competition, have been transferred to the Competition Act;
- administrative and misdemeanour procedures concerning unfair competition between companies have been abolished;
- companies must resolve unfair competition matters through civil litigation proceedings; and
- the Protection of Competition Act of 1993, including the rules on dumping and subsidized imports, has been annulled.
Migration of provisions regarding unfair competition
The existing rules on unfair competition essentially remain the same, but will from now on be included in the new section VI.a of the Competition Act. Unfair competition continues to be defined by a general clause, as an act committed by a company when operating on the market that is contrary to good business practices, thus causing damage to other market participants. Any damage is assessed in accordance with the rules of the Law on Contracts and Torts.
In addition, acts which are deemed to have an unfair effect on competition as they relate to the relationship between companies have been transferred to the Competition Act, while acts of unfair competition between a company and a consumer continue to be regulated by the Consumer Protection Act and the Consumer Protection against Unfair Commercial Practices Act. Even though the examples of unfair competition are provided for in the Competition Act, it will nevertheless be essential to prove all elements of the general clause in every specific case.
It is important to note that although provisions regarding unfair competition are now regulated under the Competition Act, the Slovenian Competition Protection Agency will not have any jurisdiction over unfair competition matters, since all potential disputes will have to be adjourned by a competent court.
Administrative and misdemeanour procedures no longer applicable
Administrative and misdemeanour procedures in respect to unfair competition practices between companies have been completely abolished. Based on the provisions of the previous Protection of Competition Act of 1993, the Market Inspectorate of the Republic of Slovenia ("MIRS") was responsible for administrative and misdemeanour procedures. In practice, MIRS often issued a temporary prohibition of acts of unfair competition, on the basis of a request filed by a plaintiff that had commenced judicial action against a company. Such practice was a clear violation of the fairness principle, as well as being contrary to the OECD guidelines, since it did not allow any substantial objections by the other party.
Companies will therefore not be able to request such temporary prohibitions from MIRS anymore, nor will they be able to report alleged violations to MIRS. This illustrates the aim of the legislature which is to direct all unfair competition cases to judicial litigation. In accordance with the latest amendments, companies will now have the opportunity to seek judicial interim measures as part of the litigation process, which will replace existing administrative and misdemeanour procedures as well as temporary prohibitions issued by MIRS.
Annulment of provisions regarding dumping and subsidized imports
When the Republic of Slovenia joined the European Union back in 2004, jurisdiction on trading policy was transferred to the European Union and Council Regulation (EC) No. 1225/2009 on the protection against dumped imports from non-member states was adopted in 2009. As a result of this new legal framework, national provisions regarding dumping and subsidized imports have become redundant and have now been abolished with the passing of the amendments to the Competition Act.
As outlined above, the amendments to the Competition Act have introduced measures which seek to simplify and streamline unfair competition area of law. Since all claims regarding unfair competition are now directed to judicial litigation, it is yet to be seen whether unfair competition claims will obtain their intended role in the legal system, which was primarily aimed at securing prohibitions of alleged unfair competition practices more easily – a procedure, which will now have to be conducted by a competent court.