Dacia & Renault: Competition Council Fine – No-Poaching Deal

The Competition Council announces that it has fined eight companies, including Automobile Dacia and Renault Technologie Roumanie, for illegal practices on the labor market.

The companies are accused of colluding with each other to divide the labor market, to prevent employees from moving from one firm to another and to keep wages low.

Non-poaching agreements are agreements or understandings between companies whereby they agree not to hire or attempt to poach employees or managers of the other company or a competitor. Basically, companies don’t “steal” each other’s employees.

The European Commission and the EU Court of Justice consider such agreements to cause economic harm, in the same way that wage-fixing agreements would. The reason is that these practices reduce the mobility of employees and prevent competition in the labor market, which can lead to lower wages and less favorable working conditions.

Such practices are considered “restrictive agreements” prohibited by Article 101(1) of the Treaty on the Functioning of the European Union (TFEU).

Sanctions applied by the Competition Council

The Competition Council sanctioned eight companies with fines amounting to approximately 32.15 million euros for participating in an anti-competitive agreement consisting in the division of the labor market in order to limit the mobility of employees and maintain low human resource costs”, the competition authority announces.

Following an investigation, the competition authority found that Alten Si-Techno Romania SRL, Akkodis Romania SRL, Automobile-Dacia SA, Bertrandt Engineering Technologies Romania SRL, Expleo Romania SRL, FEV ECE Automotive SRL, Renault Technologie Roumanie SRL and Segula Technologies Romania SRL decided not to compete for the mutual recruitment and employment of skilled/specialized labor associated with motor vehicle production activities and/or other related activities, including engineering services and technical consulting from Romania. Also, the companies agreed not to recruit human resources from one of the other companies without the latter’s prior consent.

The fines were applied as follows:

► Akkodis Romania SRL: approximately one million euros

► Alten Si-Techno Romania SRL: approximately two million euros

► Automobile-Dacia SA: approximately 16 million euros

► Bertrandt Engineering Technologies Romania SRL: approximately 1.2 million euros

► Expleo Romania SRL: approximately 1.2 million euros

► Fev ECE Automotive SRL: approximately 300,000 euros

► Renault Technologie Roumanie SRL: approximately 9 million euros

► Segula Technologies Romania SRL: approximately 600,000 euros

The “no-poaching” agreements, sanctioned for the first time in Romania

Such behaviors, known as “no-poaching” agreements, are agreements by which companies agree not to hire or make spontaneous offers to the employees of competing companies, thus renouncing the competition for attracting and maintaining the workforce.

“This is the first case in which we sanction such anti-competitive practices, in which companies do not compete to attract specialized labor. Human resources are an essential parameter of competition between companies, considering the share of personnel costs in total expenses, the labor shortage or the mobility of employees/staff. This type of behavior, “no-poaching”, is particularly harmful both for competition, by creating artificial barriers on the market, and and for employees whose mobility opportunities are affected”, said Bogdan Chiriţoiu, the president of the Competition Council.

During the investigation, one of the companies applied to the leniency program, providing documents and information that had a significant contribution to proving the anti-competitive practice and received a significant reduction of the fine, and five other companies admitted their deed and, therefore, benefited from reductions of the sanctions.

The investigation was triggered following a notification received on the Competition Alert Platform.

The competition law prohibits any agreements between companies and concerted practices that prevent, restrict or distort competition on the Romanian market, such as those that divide markets/sources of supply.

The decisions of the Competition Council are enforceable, and the applied fines represent revenues to the state budget. The National Agency for Fiscal Administration (ANAF) implements the sanctioning decision of the competition authority and executes the fines.

The decision of the competition authority will be published on the institution’s website after the removal of confidential information.