An initiative for free trade has been given its place in the Slovenian Constitution including provisions against restriction or distortion of competition.
Detailed rules for the enforcement and protection of competition are included in the following acts:
Those activities which, contrary to legislation, constitute a restriction of competition in the market, or have an influence upon the market contrary to good business practices, or which involve illicit speculation are prohibited by the Competition Protection Act , which is a basic Act governing unfair competition. The individual practices of unfair competition are:
- an unfair, inaccurate, misleading and discriminatory advertisement;
- false designation of goods;
- concealment of defects;
- intervention in business relations abroad;
- improper non-compliance with or violation of a contract;
- trading on the basis of inside information;
- violation of confidentiality, etc.
The Prevention of the Restriction of Competition Act, whch is the basic Act relating to restrictions, regulates restriction practices, companies concentration and similar practices which appreciably restrict competition. It is aimed at reducing agreements which:
- determine fix prices or other business terms and conditions;
- limit or control production, sales, technical developments or investments;
- apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
- make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to trading customs, have no connection with the subject of such contracts;
- monopolising markets by sharing markets or sources of supply between the partees to agreement.
The impeding of free trade by issuing regulatory acts or regulatory actions is also prohibited by the Act (the Government, State authorities, local councils, organisations and individuals which exercise public authority, will under no circumstances be entitled to restrict the participation of companies in a market-oriented economy.)
Abusive Practices Relating to Dominant Position
The Prevention of the Restriction of Competition Act also prohibits abusive practices relating to a dominant position on a market (a company will be deemed as a company with dominant position on a market if it covers more than 40 % of a market, or, in the case of two companies, more than 60 %). In accordance with this Act the following practices will be deemed abusive:
- directly or indirectly making the conclusion of contracts subject to the acceptance of unfair sale or purchase prices or other unfair conditions by other parties;
- the undue increase or reduction of prices;
- the limitation of production, markets or technical developments;
- applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
- making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to trading customs, have no connection with the subject of such contracts.
The Act also restricts the concentration of companies (monopolies).
The exemptions relating to the conclusion of agreements and harmonized corporate practices will be applied for smaller restrictions (if the total share of companies involved and their subsidiaries does not exceed 10 % of the market concerned) and for the following types of agreements:
- agreements on exclusive and selective distribution;
- agreements on exclusive rights to purchase goods;
- franchising agreements;
- contracts which are vertical agreements on the assignment of industrial property rights, if the buyer needs to use such assignment, sell or resell contractual goods or services, providing that the assignment provisions are not the main purpose of such contracts.
Other forms of unfair competition
Unfair competition is a company's business conducted in the market which is contrary to good business practices and which causes or threatens to cause prejudice to other market participants. The Competition Protection Act exhaustively lists those activities which may be deemed as activities which cause or threaten to cause serious distortions of the market, such as inaccurate, misleading and discriminatory advertisements and false information about goods or services, as well as activities which are misleading for consumers, such as the announcement of quasi-clearance sales or quasi-clearance (off-season) prices.
The Act Governing Rescue and Restructuring Aid for Companies in Difficulty lays down the purpose and types of national aid, as well as the criteria, procedures and methods of providing additional financing, which shall be borne by the budget of the Republic of Slovenia, to rescue and restructure a company in difficulties, provided that such company has its registered office in Slovenia. In accordance with this Act there are the following types of State aid:
- interest rate subsidies
- capital investments
- deferred payment of taxes and contributions
The Consumer Protection Act regulates the rights of consumers relating to offering, selling and other forms of marketing goods and services by companies, as well as the obligations of the State authorities and other subjects to provide consumer rights.
One of the important areas which are supervised by the Trade Inspectorate of the Republic of Slovenia is the area of consumer protection.
National authorities for competition protection
The Competition Protection Office governs the prevention of the "restriction of competition" by surveillance the provisions of the related Act.
The Supreme Court of the Republic of Slovenia provides judicial protection against a decision issued by the Office. The Office is also responsible for conducting proceedings on the violation of provisions of Articles 81 and 82 of the Treaty establishing the European Community.
The Trade Inspectorate of the Republic of Slovenia is the competent body for disputes relating to competition and it is responsible for monitoring the execution of legal decisions and assessing the cases of unfair competition.
Strict provisions govern company mergers
Notification on Mergers & Takeovers
If the total 2-yearly turnover of the companies involved before taxation, during the previous two financial years in Slovenian market, exceeds EUR 33,300,000, the merging companies must notify The Competition Protection Office of a corporate merger, no later than one week before the date of conclusion the contract, or from the date of the public announcement of the bid. The companies involved in a merger must fill in a Form for the Notification on Corporate Mergers and file the Form with the Office. This Form is available as an attachment to the Decree on the contents of the form for notifying corporate mergers.
Notification on Subsidies
In accordance with the Monitoring of State Aid Act all institutional units which grant State aid must submit data on the contents of State aid to the Division for Monitoring State Aid, within the Ministry of Finance. The same applies to the supplementation of or change in the existing State aid, as well as for granting the aid in accordance with the "de minimis" rule and the aid which comes under block exemptions.
The notification procedure - that is, the submission of data relating to the contents of aid - must be done in two steps. The controllers of aid must fill in the standardised Forms for the data on the contents of the envisaged aid, and submit the forms to the Division within the Ministry of Finance.
Complaints and disputes
Charges against allegedly unfair competition must be solved by the Competition Protection Office, which is the competent authority for assessing allegedly restrictive agreements and allegedly abusive practices relating to dominant position. On the basis of a notification on a corporate merger, the Office assesses the compliance of the merger with competition rules and after the assessment procedure the Office may approve or prohibit the merger, or make the merger approval subject to the fulfilment of certain conditions.
Information about the restriction of competition is available on the Competition protection Office Website. You also may access the publications relating to matters which were subject of the Office's assessment.