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Competition Law in Luxembourg

Competition Law in Luxembourg

The Competition Act is one of the most important laws Luxembourg companies must respect when it comes to their operations, as it covers aspects like commercial contracts, mergers and acquisitions, and price rules. For this purpose, they can have their own lawyers to ensure they remain within the boundaries of the law.

Below, our competition lawyers in Luxembourg explain the main aspects to consider as a company from this point of view and the services we can provide for them with respect to this law.

Services offered by our competition lawyers in Luxembourg

If you have a business and need assistance in understanding the main requirements of the new legislation, you can rely on our Luxembourg lawyers. Our specialists can also help with the following:

  • revision of contracts that must comply with the Competition Act;
  • offer support in mergers and acquisitions that need to respect specific conditions;
  • price regulations so that your company does not form a cartel with other businesses, as such a behaviour is punishable by law;
  • offer assistance in regulations related to competition matters applicable at EU level, in case your business also provides services or sells good within the EU.

You should also note that starting with 2023, the Luxembourg Competition Authority has been invested with additional powers.

If you need information on any change you consider might affect your business, feel free to address our law firm in Luxembourg

Types of businesses that can benefit from our services 

Our Luxembourg competition lawyers address all types of companies, however, we would want to point out that under the current legislation, some entities need to pay more attention to their activities. This is the case of businesses operating in the agricultural supply chain and enterprises selling goods online. Our specialists can bring the management of such companies up to date with the regulations they need to comply with.

Our Luxembourg law firm is also at the disposal of foreign companies with operations in the Grand Duchy.

Commercial contracts under the Luxembourg Competition Act

The competition legislation’s main purpose is to offer uniformity on the local market by not allowing Luxembourg companies to establish certain prices or conditions on the sale of products or services. This is why, the Competition Act refers to:

  • the conclusion of unlawful commercial agreements;
  • unlawful practices, which may obstruct or limit fair competition on the market.

These practices consist in fixing prices, setting different conditions for business partners or including contractual clauses unconnected to the agreement itself which would create unevenness on the market and would prevent other companies in Luxembourg to sell their products or services.

Our Luxembourg lawyers can assist you in drafting contracts while respecting the content of the Competition Act.

Dominant position under the Competition Law in Luxembourg

One of the most important parts of the Competition Act, Article 5, refers to companies in Luxembourg which could adopt a dominant position on the market through the same practices mentioned above. Dominant position implies a company can take advantage of a stronger position on the market and profit from it by imposing its own regulations to other competitors.

However, the Competition Law in the Grand Duchy is enforced by the Competition Inspectorate which cooperates with the administrative courts in Luxembourg. These courts can offer monetary or moral remedies when an unfair competition case is brought before them.

Highlights of the new Competition Law in Luxembourg

At the beginning of the year 2000 European countries, including Luxembourg, had no specific authority regulating competition. Luxembourg, however, was the only European country to have a law regulating lawful practices between companies. This law was called The Restrictive Business Practices Act and was enabled in 1970. The law was modernized in the early 2000’s when it also received a new name: The Competition Law, which was enforced in 2004. At the beginning of 2023, Luxembourg amended its Competition Law by transposing EU Directive 2019/1 in its national legal framework.

One of the most important changes in the legislation covers a more thorough framework for the filing and processing of complaints. Article 22 offers a comprehensive list of details that must be included in a complaint. Furthermore, if a complaint is denied, the Authority is now required to provide explanations for its decision, which it may base on any one of the 5 grounds specified in in the same article.

If you need support in filing such a complaint, you can rely on our competition lawyers in Luxembourg. We can also assist with appeals in such cases.

The Competition Authority in the Grand Duchy

The Competition Authority is a separate administrative body with administrative, financial, and legal independence. The new Competition Authority’s objectives are as follows:

  • investigating into and punishing infractions of the Treaty on the Functioning of the European Union (TFEU) and Articles 4 and 5 of the Competition Act;
  • conducting research according to industry or type of agreement;
  • providing comments on any proposed legislation, regulation, or other action pertaining to competition issues;
  • creating a report on its activities every year;
  • establishing and imposing temporary remedies, penalties, and recurring fines.

If you fall under any of these rules that have to do with the Authority, you should note that you have the right to a competition lawyer in Luxembourg to represent you.

Competition Law matters in numbers

Here are the main aspects to consider when it comes to the new Luxembourg Competition Law:

  • the maximum limitation under which a complaint can be filed with the Competition Authority is 5 years;
  • in case of irregularities, the Competition Authority can impose a fine of up to 5% of the daily turnover for the past financial year, unless the problem is resolved;
  • such a fine can be reduced by 30% under Article 52 which provides for a settlement procedure.

Our lawyers in Luxembourg can offer more information on the competition legislation and litigation cases related to it. You can also contact us if you want to open a company in Luxembourg. You can also rely on our lawyers for support in immigration to Luxembourg.