20th anniversary of the Croatian Competition Agency

In spite of scarce financial and limited human capacities for twenty years the Croatian Competition Agency (CCA) has played a central role in the enforcement of competition rules and creation of competition culture in the Croatian society.

Until the end of 2016, that is to say, in the last nineteen years, the CCA solved a total of 7,588 cases, where 2,237 of them were administrative proceedings. It adopted 449 decisions on regulatory provisions and their compliance with competition rules. It has been estimated that the number of cases solved in 2017 would be pretty much the same as in 2016. Thus, we may say that the CCA solved more than 8,000 cases in twenty years. It has done so with less than 50 employees and the budget of less than HRK 10 million that is not flexible and does not encourage any developments.

In the period from 2012 – 2015, that is to say, in only three years, the CCA imposed HRK 26 million sanctions, some HRK 20 million of which have already been payed to the State Budget. For the matter of comparison, in the period from 1997 to 2010, that is to say, in the period of thirteen years, when the minor offence courts were in power to impose sanctions, there was only one fine imposed following almost 200 claims filed by the CCA.

This illustrates how strong the resistance of the legislator has been and how big the challenge of the CCA in its attempts to get the power for imposing sanctions for infringements of competition rules in Croatia. The CCA knew very well that effective implementation of competition rules depended on the powers of the national competition authority similar to those enjoyed by the competition authorities in other Member States. All the necessary powers essential for producing effective general as well as special deterrent effects as well as raising awareness of the fact that committing a competition infringement does not pay, were given to the CCA at least fifteen years behind schedule.

“Nevertheless, today we are proud to say that we have built a credible competition authority with rich experience and sound enforcement record in Croatia and in the EU internal market” – highlighted the president of the Competition Council, Mladen Cerovac at the opening of the international conference in Zagreb that marked 20 years of operation of the Croatian Competition Agency. In its final word he expressed his gratitude to all the employees of the CCA and all the former presidents of the CCA.

Nataša Žigman, state secretary in the Ministry of the Economy, Entrepreneurship and Crafts, referred in her welcoming address to the importance of the yearlong cooperation between the CCA and the ministry on drafting legal proposals and ancillary provisions in the area of competition. Branko Baričević, PhD, head of the representation of the European Commission in Croatia, indicated the importance of the national competition authorities in the context of the EU consumer protection policy. In his words, 85 % of all the decisions made by the national authorities in the internal market are related to competition law. Ante Galić, the president of the High Administrative Court, draw attention to the reputation of the CCA in the development of the society, taking into account that “the development of a country may be measured by the development of its democratic institutions”, as he himself pointed out and understood the CCA to be one of these historic milestones.

There were two panel discussions at the conference. The first focused on the past experience and future challenges facing the CCA in the implementation of competition rules, whereas the second panel discussion concentrated on the functioning of the judicial review.

The first panel discussion was the occasion to bring back all the good memories and mention the remarkable contribution of the CCA in the development of the market economy within the general democratization processes in Croatia. One of the key messages from this panel was that one of the prerequisites for independence of the CCA is stable financing in the form of a stable, development budget ensuring the strengthening of its capacities but also the permanent promotion of competition culture. The discussions produced a couple of interesting ideas about the future institutional framework and legal powers of the CCA as well as the possible re-organization of the courts’ review. Concretely, some discussed the idea about merging the regulatory authorities with ex-ante and ex-post powers like in some Member States, into a single authority. On the other hand, there were also some notions about rendering instruments of intervention to executive authorities in mergers that produce significant effect on the economy of the country as a whole.

The second panel dealt with the judicial review of the decisions of the CCA. The members of the panel discussed their different views on how to improve the court protection in competition cases, particularly with respect to the authority and capacities of the High Administrative Court that is currently in charge of the judicial review of the decisions of the CCA. One of the ideas heard in that context was the possibility of introducing a completely new, special court for the matters of competition as a first instance court (similar to Germany).