The protection, maintenance and stimulation of competition are ensured in Romania by means of a legal framework created under the influence of the EU relevant regulations, the main enactments of this legal framework is Competition Law no. 21 of April 30, 1996, and Law no. 11/1991 regarding the prevention of unfair competition.

This legal framework is supplemented by a number of normative acts issued in implementing the said two laws. The recently issued Competition Council Order 103/2002 has approved specific norms regulating the main competition issues in a free market economy such as vertical and horizontal agreements, research-development agreements, and economic concentrations.

To create and maintain a normal competitive environment, Romanian legislation introduced a strict control over deeds and facts that result or may result in the restriction, prevention or misrepresentation of competition conducted by economic operators or economic operator agencies (individuals or legal entities, both Romanian and foreign), as well as by bodies of the central or local public administration, to the extent that these, through the decisions issued or regulations adopted, intervene in market operations and influence competition in a direct or indirect manner.

This control is performed through the Competition Council, as an autonomous administrative authority, and the Competition Office, as a specialized body subordinated to the government.

The measures taken to implement the regulations in force or to protect a major public interest are not subject to the anti-monopoly provisions. Furthermore, these provisions apply neither to the labor market and working relations, nor to securities and monetary market, to the extent that free competition on these markets is subject to special regulations.

In so far as they affect or may affect the normal competitive environment, the following actions are set forth by the law as being anti-competitive and are forbidden:

***Antitrust practices***

The law forbids any express or tacit agreements between economic operators or economic operator agencies by means of association decisions or united practices between the same, especially those that contemplate the united setting of prices, the limitation or control of production, distribution, technological development or investments, the sharing of markets for sale purposes or supply sources, the united participation with forged offers in auctions or in any other forms of offer contest, the elimination of other competitors from the market, the limitation or prevention of access on the market and of freedomof other economic operators to exercise competition etc.

Such agreements may be exempted from the application of prohibition if they meet certain requirements provided for under the law, depending upon the advantages they present and the significance they have for the development of the Romanian economy. The exemption is granted by the Competition Council either individually, by a certificate of exemption if the combined market share exceeds 30%, or per categories of agreements, association decisions and united practices, if the combined market share does not exceed 30%, through regulations issued especially for this purposes.

***The abuse of the dominant position***

The abusive use of a dominant position held by one or several economic operators on the Romanian market or on a substantial portion thereof, through anti-competition actions, is forbidden under the law.

Such abusive practices may consist of imposing prices, limiting production, distribution or technological development to the disadvantage of the users or the consumers, using excessive prices or ruining costs, under prices, for the purpose of averting competitors, exploiting the state of economic dependency that a customer or a supplier faces with respect to such economic operator or operators, without an alternative solution in equivalent conditions etc.

***Concentrations***

The conclusion of any legal deed for the transfer of ownership or use, over the entire or a part of the patrimony of an economic operator, or the object or effect of which is to allow an economic operator or a group of economic operators to exercise directly or indirectly, a determining influence upon another economic operator or several other economic operators, represents a concentration. If their effect is the creation or the consolidation of a dominant position, which may result in significantly affecting the competition on the Romanian market or on a part thereof, concentration operations are forbidden.

The compatibility with a normal competitive environment is assessed by the Competition Council on the basis of certain legally established criteria, such as:

- the need to maintain or develop competition on the Romanian market;

- the market share held by the respective economic operators, their economic and financial power;

- the available alternatives for suppliers and users, their access to the markets and supply sources, as well as any barriers established under normative or other acts upon entering on the market;

- the demand and the offer tendency for the goods and services at issue;

- the contribution to technical and economic progress.

Concentrations may be admitted if the parties interested in the concentration prove the cumulative fulfillment of the following conditions:

- the concentration operation shall contribute to an increase of economic efficiency, the improvement of production, distribution or technical progress, or to an increase of competitiveness for exports;

- the favorable effects of the concentration compensate for the unfavorable effects of the competition's restriction;

- consumers also benefit from the resulting advantages, especially the lower real prices.

Romanian law requires entrepreneurs to exercise their activity in good faith and in compliance with fair practice.

Any deed or action against fair practice in the industrial and product marketing activity, the activity of execution of works, as well as rendering of services, represents unfair competition and results in civil, administrative or criminal liability, as the case may be.

Failure of the entrepreneurs' conduct to comply with the specific standards of fair competition results in the qualification of the action as an offense or an infringement, which may be sanctioned by imprisonment or fine, depending on its significance.

Offenses

On the whole, any deeds or acts that have or may have the following effects are deemed as offenses (unless committed in such circumstances as to be deemed infringements, according to criminal law):

- disorganizing production by the exclusive employee of an entrepreneur offering services to a competitor or accepting such offers, by industrial espionage, by hiring employees of an entrepreneur for the purpose of disorganizing such entrepreneur, etc.

- aggressive monopolization of clientele by means of illicit contracts such as snowball contracts (contracts to be executed only if the customer brings in other buyers , untrue publicity, which may be either positive (with respect to the entrepreneur's activity or products/services) or negative (with respect to the competition's activity or products/services), by dismissing or attracting employees of an entrepreneur for purposes of establishing a competing company in order to attract the customers of the respective entrepreneur, etc.

Infringements

Romanian law defines infringements as being deeds or acts consisting of the following:

- damaging the intellectual property rights (with respect to patents, trademarks, indications of origin, industrial designs or models, integrated circuit topographies, etc.) belonging to the competitors, by means of illicitly using such rights for purposes of creating confusion with the rights legitimately used by another entrepreneur and misleading the competition and beneficiaries with respect to the quality of the products/services;

- the use, for commercial purposes, of the results of experiments, the obtaining of which required considerable effort, or of other secret information with respect to the same, sent to the competent authorities for the purpose of obtaining authorizations for the marketing of pharmaceuticals or chemicals intended for agriculture, which contain new chemical compounds;

- the disclosure, acquisition or use of the trade secret by third parties, without the consent of its legitimate holder, as a result of an action of trade or industrial espionage;

- the disclosure or use of trade secrets by persons pertaining to public authorities, as well as by persons empowered by the legitimate holders of such secrets, to represent them before the public authorities.

The person who commits an act of unfair competition shall be forced to cease or remove the act, to return the confidential documents illicitly obtained from their legitimate holder, and to pay compensation for the damages caused, as the case may be.