In 2022, Slovenia introduced a settlement procedure under the Prevention of Restriction of Competition Act (Competition Act), with a focus on restrictive agreements. This mechanism, inspired by the European Commission settlement procedures, aims to facilitate the expedited resolution of antitrust cases while encouraging greater engagement between undertakings and the competition authority. It is a form of rewarding the company for actively participating in the procedure before the Slovenian Competition Agency (Agency), thereby enabling the Agency to conduct the procedure with greater procedural efficiency.
Legal Framework
The Competition Act allows for a sanction reduction of up to 20% in the proceedings concerning infringements of national competition law or of Articles 101 and 102 of the Treaty on the Functioning of the European Union.
The initiative to commence settlement negotiations may be proposed either by the undertaking or the Agency. The undertaking that has submitted a leniency application is likewise entitled to file a settlement application. Both the Agency and the undertaking must agree to initiate negotiations based on a settlement application. Before the filing of a settlement application, the Agency provides the undertaking with the information on the allegations it intends to bring against the undertaking, the evidence upon which the allegations are based, non-confidential versions of the documents contained in the case file, and the range of the possible administrative sanctions. Settlement applications must include a clear admission of responsibility, a description of the violation, and the maximum amount of the sanction the undertaking is willing to accept.
The Agency retains full discretion to accept or reject a settlement application. Settlement-based decisions cannot be challenged if they align with the agreed terms. Where a settlement application is not submitted, or where the Agency does not accept a submitted settlement application, or where the undertaking withdraws the settlement application in a timely manner, any evidence submitted and statements made in the context of the settlement procedure are inadmissible in proceedings conducted under the Competition Act or any other applicable legislation, unless otherwise expressly provided.
The Agency successfully applied this mechanism in practice. According to publicly available data, in less than three years since the introduction of the settlement procedure, the Agency settled two cartel cases. The first settlement procedure concerned the veterinary sector, while the second involved the automotive sector.
Application in Practice
In 2023, the Agency opened an investigation against the Slovenian Veterinary Association, finding that certain provisions of its Code of Conduct restricted competition. Specifically, the anticompetitive provisions prohibited veterinary businesses from offering any discounts that would deviate from the Veterinary Association’s prescribed prices, and any advertising relating to prices, discounts, or similar. The case was resolved via settlement, with the Veterinary Association admitting the infringement of the prohibition on restrictive agreements. For the anticompetitive practice that lasted nearly eight years, an administrative sanction in the amount of EUR 43,000 was imposed on the Veterinary Association.
The second case involved an investigation by the Agency into allegation of cartel arrangements among several Renault repair outlets and dealers, specifically concerning bid rigging in public tenders for auto repair services. In 2021, the Agency established that the undertakings concerned engaged in collusive practices in public procurement procedures for maintenance, repair, and supply of spare parts for Renault vehicles by adjusting their bids, fixing prices, dividing contracting authorities, and exchanging sensitive information. As all the parties to the proceedings expressed interest in the settlement, the Agency entered into discussions with them on the terms of the admission of liability in the settlement submission.
In 2024, four automotive undertakings reached settlements with the Agency, each receiving a 20% reduction in administrative sanction. Following the reduction, the total sanctions exceeded EUR 1 million, while one undertaking was granted full immunity for revealing the cartel. As the Agency reported, during the proceedings, all undertakings cooperated actively and exemplarily with the Agency in the full clarification of the facts and circumstances, admitted the infringement alleged against them, and withdrew their actions before the Administrative Court against the Agency’s decision issued in 2021.
Conclusion
The Agency finds that the settlement mechanism introduced in 2022 has proven to be an effective tool for resolving cases more quickly and efficiently. According to the Agency, an increasing number of undertakings are recognizing the benefits of this form of case resolution, indicating a shift in mindset and a greater willingness to cooperate with the Agency in addressing competition restrictions.
By Anja Krosel, Head of Banking and Finance, and Kaja Kravanja, Junior Associate, Cerha Hempel Ulcar & Partnerji
This article was originally published in Issue 12.9 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
