Competition Council Investigation Contradicts Council Rulings

The Competition Council on February 26 started an investigation on Colgate Palmolive Romania that contradicts the resolution that the Council passed with regards to this company in 2005. The recently started investigation is intended to establish whether the company violated Art. 6c of the Competition Law. The article refers to equal treatment of all commercial partners offering the same kind of service.

Council spokesperson Simona Barbu said the reasons that had triggered the investigation could only be made public after the investigation was over. She also declined saying whether the investigation was related to the complaints filed by the company Prestige in 2004, 2006 and 2007.

On July 17th, 2005, the Council fined Colgate Palmolive 196 billion ROL, Prestige - 15 billion RON, LA-RO Impex 2001 - 19 billion ROL, GEF Facilities - 0.17 billion ROL and Pronto Universal - 11 billion ROL. The fines were given on the count that Colgate Palmolive had made an unlawful agreement with their distributors to set prices for certain products. However, Prestige argued that the Council was actually protecting Colgate Palmolive, which had discriminated Prestige and favored another distributor, Metro-Selgros.

Prestige GM Cristi Olaneanu believes that the initiation of this investigation "ex-officio" is actually the Council"s way of protecting Colgate Palmolive: if the investigation had been started based on Prestige"s complaints, the penalties could be much more severe and would also affect Metro. He added that Council Chairman Mihai Berinde is contradicting himself as he wrote in the Council ruling of July 2005 that Article 6 had not been breached in any way, whereas he has now started an investigation regarding possible infringements on Article 6c.

All the companies fined by the Council in 2005 contested the fine. Pronto Universal won on January 23rd, 2007, when the Supreme Court annulled the both the Council"s ruling on this company and the 11 billion ROL fine. The suits filed by Colgate and LA-RO are still being tried. However, Olaneanu believes "the Council"s resolutions are not worth a dime in court."