Article 5 of law no. 21/1996 (the “Competition Law”) prohibits vertical agreements that significantly restrict or distort competition, however allowing the exemption of such vertical agreements that confer sufficient economic advantages to compensate anti-competition effects. Vertical agreements represent the agreements between two or several undertakings, each of which operates, within the agreements, at different levels of the production and distribution chain, and which refer to the conditions in which the parties may purchase, sell or resell certain goods or services. As an example, this category includes agreements such as exclusive distribution (territorial exclusivity, brand exclusivity, exclusive allotment of consumers), selective distribution, exclusive purchase, exclusive sale and franchise agreements. Competition Law’s purpose is to prohibit the practices that are effectively inclined to significantly distort competition, the provisions of the Competition Law do not apply if the following requirements are met cumulatively: (i) the turnover of the involved undertakings does not exceed the threshold established by the Competition Council for the financial year prior to the vertical agreement (currently RON 4 million), and (ii) the market share of each involved undertaking does not exceed 10% on either of the affected relevant markets.
