On 28 June, the Estonian Parliament passed the Competition Act and Penal Code Amendment Act. The Act is aimed at bringing the Competition Act into compliance with current European Union competition rules. Now that Estonia has become a member of the European Union, the European Commission is also charged with monitoring competition in Estonia, as it pertains to the Community market. Pursuant to Council Regulation (EC) No 1/2003
of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, which entered into force on 1 May 2004, the regulation of proceedings in competition matters has been amended significantly throughout the European Union. The amendments passed by Parliament more clearly define the concepts "product market" and "agreement of minor importance" and specify the provisions applicable to undertakings with a dominant position. Pursuant to the amendments, "product market" now has a far broader meaning as it is no longer limited to the territory of Estonia, now that Estonia has joined the EU. As amended, agreements, practices or decisions are considered to be of minor importance if the combined market share of the total turnover of the undertakings which enter into the agreement, engage in concerted practices or adopt the relevant decision does not exceed:
- 10 per cent in the case of a vertical agreement, practice or decision;
- 5 per cent in the case of a horizontal agreement, practice or decision;
- 5 per cent in the case of an agreement, practice or decision which includes concurrently the characteristics of both vertical and horizontal agreements, practices or decisions.
The amendments establish the meaning of abuse of a dominant position and list the prohibited activities that constitute such abuse (directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions; limiting production, service, goods markets, technical development or investment; offering or applying dissimilar conditions to equivalent agreements with other trading parties, thereby placing some of them at a competitive disadvantage; forcing an undertaking to concentrate, enter into an agreement which restricts competition, engage in concerted practices or adopt a decision together with the undertaking or another undertaking; unjustified refusal to sell or buy goods; etc.) The amendments also set out restrictions on the activities of undertakings with special or exclusive rights or in control of essential facilities. New provisions have been added to the Competition Act to specify the rules for administrative proceedings and to establish the necessary elements for the related misdemeanours. The amendments entered into force on 1 August 2004.
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