Slovenia Amends Unfair Competition Legislation

Jan 28 2016 - 17:36

On October 24, 2015, the amendments to Prevention of the Restriction of Competition Act came into force in Slovenia, repealing the entire Competition Protection Act, which, among other matters, regulated acts of unfair competition and related legal remedies since 1993.

Unfair competition provisions have been transferred from the Competition Protection Act to the Prevention of the Restriction of Competition Act (Articles 63a and 63b). The general definition of unfair competition remains the same and the provision defining unfair competition still provides a (non-exhaustive) list of examples of unfair competition acts. Moreover, all claims available in unfair competition litigation proceedings are the same as before: (1) damages in accordance with Obligations Code provisions; (2) prohibition of further unfair competition acts; (3) destruction of objects used in unfair competition; and (4) reinstatement of conditions that existed before unfair competition acts took place, if possible. When unfair competition acts are conducted through media or in a similar public way, or if they affect a large number of participants on the market, the plaintiff can also claim the publication of the court decision.

However, unlike under the previous law, all legal remedies are now limited to the claims made during civil court proceedings. Interim administrative (Market Inspectorate) injunctions are no longer available, as they were under Article 28 of the Competition Protection Act, i.e. when unfair competition actions were filed with the court, the Market Inspectorate had to issue and enforce, either ex officio or following a notification filed by the plaintiff, a decision on an interim prohibition of unfair competition until the court decision became final. The Market Inspectorate was not allowed to determine all circumstances of the case – determining whether or not certain acts constituted unfair competition was at the sole discretion of the competent court. This administrative remedy has now been abolished.

The Slovenian Ministry of Economic Development and Technology proposed the abolishment of the interim administrative injunction because the Market Inspectorate was exposed to damages claims, if the measures the Market Inspectorate was required to automatically grant proved to be unjustified (e.g. if the civil lawsuit is refused or withdrawn). In such cases, great damage was also caused to the company whose business was interrupted by the injunction that later proved unjustified.

Another intention behind this change is that the Ministry believed that intra-business disputes, including injunctions, should be resolved solely before the civil courts and not before the Market Inspectorate.

The Ministry also explained that the change was necessary to resolve the apparent discrepancy between the General Administrative Procedure Act, which requires state administration to examine all relevant facts when deciding on a matter, and the repealed Competition Protection Act, in respect of which consistent and established Administrative Court practice confirmed that the Market Inspectorate was not allowed to examine the circumstances of the unfair competition case as soon as the evidence of a filed unfair competition action was provided, but had to automatically issue an interim administrative injunction.

The transitional provisions of the amendments to the Prevention of the Restriction of Competition Act stipulate that all pending proceedings initiated under Article 28 of the Competition Protection Act (interim injunction) are terminated. This will inevitably affect the interests of all plaintiffs in pending unfair competition cases that relied on the Market Inspectorate’s interim injunction option instead of the court injunction at the time when both options were available.

By: Andrej Bukovnik

For more information, please contact Andrej Bukovnik at our Slovenia office.

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