Draft law to merge key regulators into two agencies

Slovenian Competition Protection Agency (CPA) has on 1 October 2020 received the draft Act on the Public Agency of the Republic of Slovenia for Market and Consumers and the Public Agency of the Republic of Slovenia for Financial Markets (hereinafter: Draft law). CPA is one of the six agencies slated to be merged into an agency for market and consumers.  The draft law was forwarded to the Agency by the Ministry of Economic Development and Technology (MGRT).

CPA was previously not informed of the draft law, nor was it involved in the process of drafting it. The CPA strongly opposes the draft law on the grounds that the latter significantly reduces the independence and operational autonomy of the Agency and is therefore incompatible with the Directive 1/2019 of 11 December 2018 to empower the competition authorities of the Member States to enforce the competition rules more effectively and to ensure the proper functioning of the internal market (Directive 1/2019), which the Republic of Slovenia is required to transpose into its legal order.

The CPA has within the deadline set by the MGRT (i.e. 5 October 2020 at 10:00 p.m.), prepared and submitted a response to the Draft law.  

The proposed changes encroach on the independence and autonomy of the CPA and create conflicts of interest, degrade the expertise of the CPA and the managing authorities and represent a step in the wrong direction. The proposed amendments in no way touch upon the fundamental problem of the proceedings before the CPA (i.e. introduction of a single procedure). 

The recently adopted Directive 2019/1 expressly states in recital 16 that ‘the strengthening of the role of national administrative competition authorities with a view to the impartial application of Articles 101 and 102 TFEU and in the common interest of the effective enforcement of the Union competition rules is an essential component of the effective and uniform application of those rules’.

The draft law, which combines competition protection tasks with other sectoral policies, does not follow this, as it combines incompatible functions that are in conflict with each other, creates conflicts of interest, dilutes the importance of competition enforcement and undermines the independence of the competition authority.

A brief review of the draft law shows that there are no changes in the CPA’s work (substantive and procedural provisions) but only the CPA’s organization, control and management bodies are changing.

According to the draft law, the independence and autonomy of the competition authority is diminishing, mostly regarding the provisions on how the management body of the board and management is appointed, on decision-making, on the change of management, on the performance of additional tasks – in addition to the protection of competition – and delegation of responsibilities and financing. As a result, CPA’s independence and autonomy vis-à-vis the government is diminished as also the importance of protecting competition. The current management and supervisory body is prematurely removed, and administrative decision-making powers are also transferred to junior officials.

The independence of the CPA has been so far guaranteed in such a way that the designation of management (the Director of CPA and the Council as a decision making body) was appointed by the National Assembly. Within the proposal of the draft law, the designation of management and the Council moves from the National Assembly to the Government which represents a lower standard of independence.

In the light of the above, the CPA proposes to withdraw the draft law from further consideration and to carry out appropriate studies and risk analyses, as required by Slovenian and European legislation, and to consult all relevant stakeholders, as is common practice.

Furthermore, CPA expects the competent authorities to develop solutions addressing any shortcomings in the existing system, setting out clearly and transparently the objectives that the future regulation will pursue in such a way as to ensure the independent functioning of the competent authorities and to enable them to exercise their fundamental powers effectively.

Generally, CPA takes the view that the draft law, which is submitted without proper analysis of the impact assessment and public debate, and in the light of the proposed solutions, is not acceptable.





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