1. Evaluating Romania’s Place in Competition Law Networking: Can Sub-Regional
Networking Deliver Enhanced Benefits?
The ECN has been widely heralded as a massive success. But does success for the network
mean that all of its members - particularly its newest and most marginal - enjoy the same
success from their participation? This article examines how well adaptation to a uniform
European competition policy has suited Romania compared to their European partners to the
West who founded the Union or ascended to it much earlier, practicing market economies
while Romania was still under communism.
1. Competition Law in the EU
Competition Law’s significance has grown in tandem with the emergence of the market
economy as the guaranty of economic and social cohesion across Europe. In this respect the
maintenance of fair competition is central to protecting a competitive society. Having a
competition law regime to match its European partners is thus hugely important for Romania
in its process of economic liberalisation and integration.
Regulation 1/2003 sets out the European Commission’s powers in the area of competition
law. It sets out what practices are permitted, not permitted and how the rules are enforced,
what conduct is being monitored and what are the responsibilities shared among the
European network and the respective national competition authorities. An interesting aspect
of this regulations implementation is that it came into force just before the first
accessionof central and eastern states to the union in 2004. This raises a question over the
suitability of the legislation for these states who weren’t fully part of the Union when it was
drafted.
The ECN is a decentralised part of the European Commission with responsibility for
regulating competition law, overseeing the activities of the national competition authorities
(NCAs). Its soft law methods of promoting convergence have been very successful. Thus the
ECN is almost universally regarded as a success story that surpassed all initial expectations.
That this approach has yielded such success as opposed to an approach of hard-law has been
a source of surprise which people struggle to explain.
Soft Law
Soft law convergence methods have been a surprisingly successful way of
achieving success in European Competition Law. Soft law relies on
networking, conferences agreements and commitments to behave in a
certain way. There are no binding instruments or hard sanctions. Only the
success of the network is at stake for the parties who participate. Therefore
it is important that they all share similar agendas. The thing that prevents
parties from breaking these requirements is the fact that the network or
union will fall apart in such event. In the case of the ECN, that is clearly
something that none of the parties want to happen. The soft law
harmonization method is part of a style of governance which is particularly
popular right now in Europe.

2. Probably, the success of soft vs. enforced measures can be explained by the desire of
members to be included in the greater system of benefits provided by the EU. This may be
especially true for new members who are less compatible with the requirements of European
competition law to follow the rules regardless, due to their desire to be integral parts of the
union.
However success for the Network doesn’t necessitate successful membership for all its
members particularly those who are newest or peripheral. Has the achievement of goals for
the network corresponded with success for all of its members?
2. Romania - the benefits of joining the ECN
Relatively, Romania is a newly liberated economy which has integrated itself quickly into the
Western European social and economic system, ascending to the union in 2007, only 18 years
after the fall of communism. In joining the union it has harmonised its laws with its union
partners and this transformation is exemplified well in competition law. The support of the
European Competition Network, with its conferences and information sharing has been
particularly useful in this regard.
The role of corruption culture can’t be underestimated when assessing the challenge that
competition authorities face in Romania and surrounding “transition states” of central and
Eastern Europe.
The World Bank (WB) has acknowledged the difficulties that transition countries of central
and Eastern Europe and the Former Soviet Union have faced with systemic corruption. Citing
the 1999 Business Environment and Enterprise Performance Survey of over 3,000 enterprises
in 22 former communist countries they found that the 125 firms in Romania that provided
interviews reported relatively high levels of both state capture (manipulation of rules and
laws by political leaders for their own benefit) and administrative corruption. This finding
was supported supported by the 400 enterprises interviewed for the whole survey. A country
with high levels of both forms of corruption faces the particular challenge of restraining
concentrated economic interests and disentangling politics from business.1
As has happened almost across the board in members of the union, Romania has harmonised
competition law and practices with European standards to a higher extent than is necessitated
by the Treaty provisions. How beneficial is this for Romania though?
Romania experienced positive economic growth in 2011, 2012 and 2013. Its competition
authority highlighted this in their 2013 annual report championing the role of competition
policy commenting that, “Competition policy is based on the belief that maintaining a free
and fair competitive environment has the effect of increasing material progress for the benefit
of society.”2
1 World Bank, 2001, Diagnostic Surveys of Corruption in Romania, p. 2
2 Romanian Competition Council Annual Report 2013

3. Graph no.1. Real GDP growth rate, 2009-2013
Source: National institute of Statistica (in Romanian Competition Council Report
2014)
It seems that ECN membership has benefitted Romania, it would be difficult to argue
otherwise. What is worth asking is whether Romania and other new accession countries are
getting the best deal at the negotiation table. Economic growth may only be stemming
from the wider EU membership, with ECN membership being little but a necessary
commitment allowing for this.
Eight years on from accession to the Union, now is a good time to examine the effects of the
European Competition Network in Romania and whether there are other ways that
networking can improve the implementation of competition law in this relatively new
European Union state. Could more localised networking, additional to ECN activities,
deliver more benefits for Romania within the wider European network?
3. Is Competition Law a Western Ideal?
Some analysts argue that competition law was born in the developed nations of the West with
its economic thinking based in industrial organization, a sub-discipline of neoclassical price
theory. This theory requires that companies be prevented from acquiring monopolies so that
the best price is delivered to the consumer based on supply and demand of the market.
Romania is relatively new to the idea of market economics so it’s worth questioning how
well adaptation to a uniform European competition policy drafted by mainly Western
members so soon has worked for it compared to their European partners to the West who
either founded or ascended to the Union a lot earlier when the idea of the market economy
was first taking hold.
Wilks acknowledges that European competition policy is above all else about promoting and
defending the free market and that the market integration goal of this policy remains an

4. important context for new accession states. But he also argues that these goals remain open to
wide and varying definitions. He also finds that the ECN is characterised by a level of
political and normative solidarity that could be regarded as excessively strong in relation to
concerned parties within states. This could be a problem if the Director General of
Competition for the European Commission (DG Comp) develops a particular policy stance
which whilst shared by competition agencies, evokes a conflict with protagonists of the
managed and state models of capitalism. This would be a problem for states of the east in
particular. Closer networking among these states on how to implement these policies would
be very beneficial for them.
A study published just after the fall of communism in Romania questioned whether
competition policy was really what central and Eastern European countries needed. Citing
assistance sought by some of these states in the US the authors concluded that while
competition policy may not be the first thing needed in these countries, it is a key part of the
reform process. The technical assistance sought from the US back then was a big
endorsement of the ECN idea.
The possible difficulties in adopting the established form of European competition policy for
the new states of central and Eastern Europe was acknowledged by the EU Commission
during the accession process, mainly citing differences in technology, institutional structure
and cultures such as the benefits enjoyed by monopolists being ingrained in the economic and
legal systems of these states.
4. Comparing the National Agencies
Contrasting the performance of the Romanian competition authority with its ECN partners
gives an idea of who is suited to ECN competition policy the most.
Wilks’ 2007 study found 4 leagues of competition agencies based on their proportion of cases
initiated (amount of investigations into suspected anticompetitive behaviour). Unsurprisingly
France, Germany the UK and Italy were in the “Elite” league for effectiveness opening a
combined 53% of cases while there were three other groups of agencies classed as “good”,
“problematic” and “ineffectual”.
No. of agencies % of cases opened
Elite: EU, Fr, Ge, UK, It 5 53
Good: Den, Fin, Ire, Neth 4 19
Problematic: Sp, Swe, Por, Aus, Pol 5 17
Ineffectual: Gr, Bel, Lux + 11 new MS 14 11
The groups that the national agencies fell into corresponded more or less with the amount of
time spent in the European Union. Romania was part of the “ineffectual” group along with all
the other states which had recently acceded to the Union, except for for Poland who were in
the “problematic” group. While two of the founding members: Belgium and Luxemburg, are
also in this group, it can be broadly accepted that new member states require extra support to
catch up with the established members of the network.

5. This suggests that some form of extra support should be provided to bring newer member
states up to speed with the agencies of the more established members. In the case of Romania
the passing of time has seen them take much larger strides towards being an effective
member than their accession partners.
One huge factor for the divergence in application of EU competition rules is the interpretation
of the “effect on trade rule” (the concept that activities in one member state can affect other
states within the common market).
Given that countries usually trade the most with their geographical neighbours, a sub-
regional competition network would be very effective in establishing a common
understanding among trading partners of effect on trade. This would promote trade in the
region by putting major trading partners on the same page regards competition rules and
competitive trading practices and procedures.
In contrast to the majority of their peers, the Romanian National Competition Agency (NCA)
accumulated substantial experience in conducting ‘effect on trade’ assessments in
investigating potential antitrust infringements on the domestic market. Romania has notified
twice as many investigations and four times more envisaged decisions to the ECN than
Bulgaria. In 2013, 42% of the investigations finalized by the Competition Committee (CC)
concerned EU competition law cases, the application of EU competition rules in a substantial
portion of those cases is indicative of the CC’s approach in applying the “effect on trade”
concept.
Decentralisation from politics is an important element of the ECN and its national agencies
existence. The agencies are significant and legitimate bodies in their own right when viewed
separately to the ECN which specifically governs the enforcement of Articles 81 and 82
(TEU), and doesn’t link all agency activity.
Romania would benefit from the network by pulling their neighbours up with them rather
than needing to be pulled up by them. Domestic progress in competition law can only benefit
Romania to a certain extent if they are isolated among a plethora of ineffectual members.
How strong can their voice be within the ECN if their ideas conflict with those of an
elite few, present in the EU since its foundation, most economically powerful and
clustered in the west of the continent?
5. Lessons from Latin America?
The Latin American Competition Forum (LACF) offers an interesting source of comparison
to the ECN especially for former communist countries like Romania as the Latin America
countries are also new to market economics.
On its 10th anniversary OECD Secretary General Angel Guirria made a point that is very
salient for Romania,
“The Latin American and Caribbean region has undergone an unprecedented social and
economic transformation in the past two decades. In the process, competition policy has
taken root as countries have engaged in reforms in favour of open market economies.”
On the same occasion, Inter Development Bank (IDB) president Luis Alberto Moreno has
pointed out from the Latin American perspective that, “The results of multilateral and

6. regional trade liberalisation efforts show us that removing tariff and non-tariff barriers is
necessary but insufficient to ensure functioning markets and competitive prices.”
This re-enforces the importance of the ECN within the EU. It’s clear that networks like the
ECN must exist to ensure competitive markets in the member states of multilateral
agreements. If we analyse the relationship between the two instigators of the LACF – the
OECD who are experts in competition and the Inter-American Development Bank (IDB) who
are experts on the region - a very important dynamic that they produce together becomes
evident. Regional sensitivities to economic and competition policies are accounted for by the
IBD’s presence alongside the OECD’s competition expertise demonstrating that best
competition policy can’t be devised in relation to economics alone.
CARICOM is a sub-regional network whose members also make up part of the LACF’s
competition structure. Their competition council represents the interests of Caribbean
countries at the forum. CARICOM states are a marginal presence at the LACF in terms of
economic strength and bargaining power just like the new Eastern European states of the EU
within the ECN.
The Andean Community is another sub-regional network, the result of a desire to address the
underdevelopment of the region, taking inspiration from the success of European integration.
Article 48 of the Cartagena Agreement defines the Andean Community as a sub-regional
organization with its own distinct legal identity composed of five member States (Bolivia,
Colombia, Ecuador, Peru and Venezuela) and regional bodies and institutions represented in
the so-called “Andean System of Integration” (SAI).”
Aside from its hard legal functions, the function of the General Secretariat of the Andean
community also includes promoting the interests of the sub-region and giving technical
support when appropriate to the other bodies and institutions of the Andean System to ensure
compliance with the provisions of Andean community law.
The ability if this sub-regional committee to take part in wider schemes is particularly
evidenced by their participation in “COMPETENTIA”, a technical co-operation agreement
between the EU and Andean community to harmonise the competition regulations of the
Andean region; and the “Free Trade of the Americas agreement (USAID Grant Agreement)”
of which competition is a key component.
The eastern European network could assist states like Turkey, Serbia and Albania in their
wider integration process indirectly and in their competition law integration process directly.
This would help trade relations with neighbouring countries outside of the EU giving the ones
inside a stronger hand when they come to the ECN negotiation table.
This kind of effect has occurred in the Andean community as Bolivia and Ecuador who
previously had no national competition legislation have been brought up to speed by their
Andean partners, to the benefit of all members. The USAID agreement foresaw the need to
assist these two countries with special technical assistance in the elaboration and
dissemination of draft legislations on competition policy.
Sub-regions in Europe can, in turn, be inspired by the functioning of this small but effective
community. While Andean integration features more hard law mechanisms than would be
desirable for an Eastern European sub-region or even at ECN level, the provision of technical

7. assistance in the community as well as its overall vision of furthering the integration of an
underdeveloped region is worth learning from.
The LACF believe that as a result of the evolution and convergence promoted by the
Forum, many Latin American competition regimes are now examples of best practices,
strong institutions and modern laws with the Latin American perspectives including those
of the sub-regions enriching the development of OECD competition tools to promote sound
competition principles around the world.
I think that the new accession states of Central and Eastern Europe can replicate the success
of CARICOM and Andean members by following a similar model.
6. Regional Co-operation
Far from advocating a hostile approach from the region to pan-European discussions, I am
advocating this approach as a means of achieving greater recognition of the sensitivities
of Eastern economies in a predominantly Western network. This has historically been a
West European Union with the Eastern states being very new to the community. Also, the
large scale of the ECN means that meetings, communication and casual information sharing
can’t happen as regularly as would be possible in a more localised regional network.
History of South Eastern Co-Operation
There is already a rich history of co-operation between south-eastern European states on
various issues which indicates that co-operation in matters of competition could be very
fruitful. Co-operation in the region has successfully moved from supervised movements
initiated by outside overseers to autonomous, shared regional co-operation.
Leveraging on this culture of co-operation in the competition field can improve the
functioning of state competition laws through closer and easier communication than can be
had with other ECN members and a stronger hand at the ECN negotiating table.
South-Eastern European Co-operation Process (SEECP)
According to Romania’s foreign affairs ministry,
“Romania’s active involvement within SEECP is focused on targeting the common interest of
consolidating stability and security in the region. It is a clear and distinct expression of
Romania’s determination to grant concrete support at the political level to the states of South-
Eastern Europe, in view of their European and Euro-Atlantic perspective.”
Romania held two successful presidencies of the commitee
South-Eastern Co-operative Initiative (SECI)
Simultaneously, the SECI was set up which involved many countries from outside the region
in the capacity of observers. The aim of this initiative was to bring peace and stability to the
region in the aftermath of the Bosnian war.
Stability Pact for South Eastern Europe (SPSEE)

8. The Stability Pact for South Eastern Europe was an institution aimed at strengthening peace,
democracy, human rights and economy in the countries of South Eastern Europe from 1999
to 2008.
Regional Co-operation Council
The Regional co-operation council has come about through the SPSEE and the SEECP. The
Regional Cooperation Council (RCC) was officially launched at the meeting of the Ministers
of Foreign Affairs of the South-East European Cooperation Process (SEECP) in Sofia, on 27
February 2008, as the successor of the Stability Pact for South Eastern Europe. I think that
this signifies the progress made by the region in co-operation and a streamlining of the
regions co-operation process.
The RCC has recently adopted an ambitious 2020 strategy with the goal of improving living
conditions in the region and bringing competitiveness and development back in focus, closely
following the vision of the EU strategy Europe 2020. It stresses out the shared vision of the
SEE economies to open up to 1 million new jobs by 2020, by enabling employment growth
from 39% to 44%, increase of total regional trade turnover by more than double from 94 to
210 billion euro, the rise of the region’s GDP per capita from current 36% to 44% of the EU
average, and the addition of 300,000 highly qualified people to the workforce.3
Black Sea Economic Co-operation
The Black Sea Economic Cooperation which gained legal identity with the entry into force of
its Charter on 1 May 1999 is an example of the ability of the regions governments to co-
operate, specifically on environmental matters. Romania currently holds the chairmanship of
the council for a 6 month period July-December 2015. One of the greatest successes of the
co-operation has been the setting up of a bank which has achieved stable ratings from the big
agencies.
An Eastern-European Network for Competition Law?
If these kind of support networks could be applied to competition law in the region it would
not only bring a stronger voice for south-eastern European states to the wider European
forum but would also serve as a means of integrating candidate states or other states with
union ambitions into the European system of competition law. The more that the South-East
European states are integrated into European competition law the stronger the voice of the
region becomes in the ECN.
Despite some streamlining there are in fact still a range of co-operative organisations in this
region which along with demonstrating co-operative ability also complicate things and drain
time and resources. Perhaps the further streamlining of co-operation in the region could see
the creation of a single body for the region working off very soft methods of harmonization.
This group could deal with a range of economic and integration issues to compliment and
promote EU commitments for each state, with a dedicated department for competition policy.
The scope of states to be included should be separate from the scope of the ECN. In the
interest of bringing a stronger voice to the ECN table which should remain its priority, all
3 Regional Co-operation Council,“South EastEurope 2020, Jobs and Prosperity in a European Perspective”
November 2013

9. ECN members in the defined geographical region should be part of it. In the interest of
promoting trade with its neighbours the network should encompass states from outside the
EU as well such as Turkey, Albania and Serbia. Figures show that trade between the EU and
eastern European states outside of it is highly significant. Total EU-Turkey trade has
expanded 254% between 2000 &2013.4 For Romania and other fundamentally interested
states the question is where the boundaries of the sub-region should be drawn?
The most focused option would only include states south of Ukraine, Hungary, Austria and
east of Italy. The most expansive option would include all states east of Germany, Austria
and Italy. An in-between option would include the states from option excluding the non-EU
former USSR states.
7. Conclusion
Further decentralisation and soft law methodology can achieve better outcomes for peripheral
states in European competition law. These two strategies have served the ECN well so far
leading to significant success. Taking further inspiration from the previous success of
networks in the South-east Europe region and sub-regional networks in South-America which
have competition law as a key component, I see a lot of scope for progress to be made under
this approach.
Romania has the potential to be a leader in this domain based on their success in
adapting to European competition law in respect of their neighbours. However they
would benefit just as much as their partners if they can succeed in bringing them along with
them providing a strong regional voice at the ECN table as well as consistent application of
competition rules to trade among the states of the region.
4 Joseph P. Quinlan,“The Casefor Investingin Europe 2015 – Why U.S. firms should stay the course”
AMCHAMS in Europe