BizCLIR

The goal of Competition Law is to foster a culture of competition that ultimately benefits consumers – in short, more and better goods at the best prices. A comprehensive competition regime typically encompasses a set of laws crafted for the purpose of ensuring open and free markets, preventing conduct that impedes fair competition among businesses, protecting consumers, and stimulating enterprise innovation and efficiency. Competition Law can be quite complex, and, particularly for countries that are desperate for substantial economic growth in a short amount of time, the rules it sets down against collusive activity can seem counter-intuitive.

Is Kosovo ready for a formal Competition Law? In Western democracies, the laws restricting monopolies and other unfair competition resulted from sustained public outcry over the business practices of powerful “robber barons” who monopolized certain markets or conspired to fix prices. Resulting legislation specifically disallowed price-fixing; schemes that constrained access to specific customers or geographic areas; insurmountable barriers to entry; restraints on production or sale, including quotas; and other practices which ultimately discouraged businesses from producing “more and better goods at the best prices.”

In Kosovo, there is not yet a similar demand for a Competition Law. Rather, concerns over anti-competitive practices generally arise from the unfair advantages held by Kosovo’s “gray economy.” Specifically, the fact that many firms in Kosovo operate without registering, paying taxes, or observing labor, environmental or other regulations represents “a significant competitive barrier for firms operating legally.” One other potential source of anti-competitive activity has been addressed through legislative action: the pending UNMIK Regulation on the Chamber of Commerce specifically ends the Chamber’s history of mandatory membership of registered enterprises, thereby facilitating creation of new business associations and, in effect, promoting genuine competition among groups formed for the purpose of supporting businesses.

The impending enactment of a Competition Law in Kosovo will generate new attention to anti-competitive practices. It may be assumed, however, that the Law’s underlying principles and specific restrictions will not be immediately understood. The Law also will create a new administering agency – the Kosovo Competition Board – to be charged with enforcing the new rules. Given Kosovo’s dearth of qualified professionals capable of addressing sophisticated new market-oriented initiatives, the creation of a new enforcement and policy-setting body seems on the verge of self-defeating. Assuming there is no turning back, any program in support of commercial law should anticipate that, immediately following the enactment of a Competition Law, significant training and capacity-building for the KCB and other affected constituencies will be critical.