WORLD TRADE
ORGANIZATIONWT/WGTCP/W/171
26 July 2001
(01-3730)
Working Group on the Interaction
between Trade and Competition PolicyOriginal:  English
COMMUNICATION FROM THE SLOVAK REPUBLIC
The following is the final text of a pape r received from the Permanent Mission of the
Slovak Republic which was circulated as an advance copy for the Working Group's meeting of
22-23 March 2001.
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1. Introduction
Economic competition represents a natural mechanism which acts in a market economy as
the regulator of entrepreneurs' effective behaviour and simultaneously leads to optimal utilisation of
economic resources and to effects on the side of consumers.  Protection of economic competition is
not self-aimed, it cannot be enforced absolutely, but it has a tendency to create conditions foreconomic development.  Competition represents an economic phenomena closely tied together with
the system of a functioning market mechanism which means that all measures which affect market
area conditions can result in a change of conditions in the sphere of economic competition.
Competition policy as a tool for development of market economy facilitates trade by
removing restraints to trade.  On the other hand, trade policy facilitates and encourages competition
through lower government tariff and non-tariff barriers and both of the policies overlap.  Therefore,it is difficult to speak only about competition policy or law and not to mention their impact on trade.
2. Competition Law and Policy in Slovakia
Current Act on Protection of the Economic Competition
The aim of the competition legislation in Slovakia, represented by the Act on Protection of
the Economic Competition, is to protect and support efficient competition and create the conditions
for its further development in order to support the economic development to the benefit of
consumers.  The Antimonopoly Office of the Slovak Republic (hereinafter referred to as "AMO") is
a state administrative authority with powers in the field of agreements restricting competition, abuse
of a dominant position and control of a concentration.  The AMO also has the right to ask
municipalities and state administrative authorities not to restrict competition by their actions.
2. 1. Agreements Restricting Competition
Article 3 of the Act on Protection of the Economic Competition states that agreements and
concerted practices between entrepreneurs, and decisions of entrepreneurs' associations, which aim at
or may result in restricting competition, are prohibited, unless the Act provides otherwise.  The
prohibition especially applies to the agreements restricting competition which directly or indirectly
fix the prices of goods, a commitment to limit or control production, sales, technologicalWT/WGTCP/W/171
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development or investments, division of the market  or of sources of supplies, a commitment by the
parties to apply different trade conditions to the individual entrepreneurs with regard to identical
performance, or the conditions that the conclusion of contracts will be made conditional upon
accepting additional obligations, which do not relate to the subject-matter of the contracts in terms of
their nature or business practices.
2.2. Abuse of a Dominant Position
A dominant position in the market is held by an entrepreneur or several entrepreneurs, who
are not subject to substantial competition, or as a result of their economic strength they can behave
independently toward other entrepreneurs and consumers and can restrict competition.  The
prohibition of abusing a dominant position especially applies to direct or indirect enforcement ofinappropriate contractual conditions, limiting production, sales and technological development of
goods to the detriment of consumers, applying different trade conditions to the individual
entrepreneurs with regard to identical or compar able performance, or making the conclusion of
contracts conditional upon accepting the condition that the other party will also purchase another
performance that does not relate to the subject-matter of the contract in terms of its nature orbusiness practices.
2.3. Control of Concentrations
The Act on Protection of the Economic Competition defines the concentration as a process
of economic combination between entrepreneurs through a merger or amalgamation of two or
several entrepreneurs, or through a transfer of an enterprise or part thereof to another entrepreneur, or
through the acquisition of control by an entrepreneur or several entrepreneurs over another enterprise
or part thereof.  Not all concentrations are subject to the control by the AMO.  The Act on Protection
of the Economic Competition explicitly defines the conditions under which a concentration is subjectto control procedures conducted by the AMO.  The AMO may either fully approve the concentration
or require that certain conditions be met for the concentration to be approved, or prohibit the
concentration.  The AMO shall prohibit the concentration, if it creates or strengthens a dominant
position in the market, unless the participants prove that this damage to competition is outweighed
by overall concentrated economic advantages.
2.4. Fines
The AMO is entitled to impose a fine on an entrepreneur for breaching the duties stipulated
by the Act.  The amount of the fine may be up to 10% of the turnover generated in the previous
accounting period, depending on the importance of the violation. If it is not possible to calculate the
sales, the fine may amount up to Sk 10 million.  If it is proved that the entrepreneur achieved aproperty benefit as a result of violating the obligation prescribed by the law, a fine at least equalling
this benefit will be imposed on the entrepreneur.  The AMO may also impose a fine on an
entrepreneur who fails to fulfil the obligation to submit to the AMO the required documents and true
information within the set time limit or does not allow a review of these documents and information,
or prevents entry in the entrepreneurs' buildings, premises and transportation means.
Changes to the Slovak Competition Act
The Act on Protection of the Economic Competition has been in effect for seven years and,
during its implementation, some of its provisions turned out to be inappropriate, because they hadceased corresponding to the actual requirements of the Slovak market, which means that it is not
possible to flexibly react to illegal activities of entities operating in the market and more energetically
supervise economic competition in the Slovak Republic.WT/WGTCP/W/171
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Another major reason for adopting a new Act on Protection of the Economic Competition is
the obligation of the Slovak Republic to react to the development trends that have appeared in the
legislation concerning competition within the European Union, in order to maintain the legal
continuity with our legislation concerning this area.  The Act should thus contribute to the fulfilment
of the Slovak Republic's obligation concerning further approximation of the Slovak legislation to theEU law.
Based on a detailed analysis of the plans contained in the Programme Policy of the
Government of the Slovak Republic, the AMO ela borated a new Act on Protection of the Economic
Competition in order to ensure a complete solution to problematic issues concerning the protection of
economic competition.  This task can be fulfilled especially by strengthening the independence of the
AMO as a body responsible for the area of economic competition.  The independence of the AMO isnecessary especially to ensure the most objective decision-making.  Therefore some changes has been
adopted.  The Chairman shall be appointed and dismissed by the President of the Slovak Republic,
following a proposal from the Government, for a fixed period.
At the same time, independence of the decision-making shall be strengthened by the Council
of the Office as a collective body taking the second instance decisions.  The Council is to consist of
seven members, five of which are experts outside the AMO and the Chairman and vice-Chairman.
3. Implementation of Competition Policy and Advocacy Role of Competition Authority
The competition law itself is not enough to ensure the proper functioning of effective
competition. Implementation of competition law, competition advocacy and setting up the priorities
in relation to pro-active dealing with competition issues are the inevitable elements for the creation
of effective competition and consequently, a competitive economy.
Competition advocacy in Slovakia is realized by the Chairman himself at the level of state
administrative authorities.  The Chairman participates at the meetings of the Government and he is a
member of various ministerial councils.  At these meetings he has the right to express his opinion, to
stress the importance of competition policy and to indicate a possible competition problem stemming
from other policies.
The amount of competition may be reduced by applying other policies.  Therefore, the AMO
participates more actively in the process of formulation and implementation of other policies in the
form of issuing opinions on draft legislation, documents submitted to the Government of the Slovak
Republic, and opinions of privatization projects, in accordance with the laws providing for these
obligations:
Opinions on Draft Legislation
Within the legislative process, the AMO regularl y participates in the inter-ministry comment
procedures and issues opinions on draft legislation submitted to the sessions of the Government of
the Slovak Republic.
Opinions on Privatisation Projects
The relation of the AMO to privatisation arises from Article 19 of the Act on Protection of
the Economic Competition, according to which the AMO is required, within eight working days, tocomment on a draft privatisation project submitted by the founder.WT/WGTCP/W/171
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Opinions according to Act No. 59/1997 Coll. on Protection Against Dumping in the Import of Goods
According to this Act, the Ministry of Finance of the Slovak Republic has a duty to request
the AMO for an opinion on the restriction of competition, when assessing dumping in the import of
goods, and reviewing and evaluating the damages resulting from the dumping.
Opinions according to Act No. 214/1997 Coll. on Protective Measures in Imports
The purpose of the Act on Protective Measures in Imports is to protect local production
sectors against increased quantities of imported goods which may seriously endanger the sector or an
entrepreneur's market position.  The Ministry of Economy of the Slovak Republic also requests a
written statement from the AMO.
Opinions according to Act No. 226/1997 Coll. on Subsidies and Balancing Measures
According to this Act, the Ministry of Economy of the Slovak Republic requests a written
statement from the AMO and another three central bodies of state administration on the import ofgoods that are subsidised in the country of origin, if the local production sector is intentionally
damaged by importing such goods to the Slovak Republic.
4. Future Priorities
As has already been mentioned, an effective competition law is only the beginning of a
well-functioning market economy.  Competition author ities not only deal with real competition cases
but they should be interested in formulating and implementing other policies.  To manage all of their
tasks competition authorities must be able to find internal and external resources.
In Slovakia we linked possible internal and external resources together in one project. It is
the project of Institutional Strengthening of AMO financed by the British Department for
International Development.  The aim of the project is to strengthen the Office and to build up a
capacity for increasing effective competition in Slovakia in line with EU requirements.  Under this
project, our staff will have the opportunity to exchange experiences with British and Dutch experts,
not only on competition issues but also on a possible organizational change in relation to an
increased number of cases  and other relevant issues.  Therefore, international cooperation and an
opportunity to meet at international meetings is of great value for us.
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