jurisdiction
1. Introduction
What significance does the Corona crisis have for antitrust law? We summarize the most important opportunities and risks.
The Corona crisis is hampering business activities in all sectors and it comes as no surprise that companies are starting to discuss ideas of aligned cooperation to reduce costs and improve their services.
Since coordinated actions among companies could lead to doubts regarding competition law rules, the EU competition authorities linked in the European Competition Network (ECN) issued a joint statement, which has been published by the Croatian Competition Agency (AZTN) as well. The statement acknowledges the need for cooperation to ensure the supply and fair distribution of products to all consumers, but also notes that the authorities will not hesitate to take action against companies taking advantage of the current situation by cartelising or abusing their dominant position.
2. Antitrust
Possible exemptions from the ban on cartels
Behaviour that would in normal circumstances be subject to stricter supervision could be justified in the current situation where the main goal is to enable availability of products at competitive prices. Therefore, the ECN has explicitly stated that it will not actively intervene against necessary and temporary measures implemented to avoid a shortage of supply.
However, this does not mean that the competition authorities will remain inactive. On the contrary, they will monitor such cooperation to avoid any abuse.
This crisis situation is not an excuse for taking clearly anticompetitive action. The classic restrictions of competition, such as price fixing, territorial and customer allocation remain prohibited.
3. Abuse of market power
Abuse of market power still not permitted
While noting that necessary cooperation initiatives are unlikely to be problematic, the ECN emphasized at the same time, that it is of utmost importance to ensure that products considered essential to protect the health of consumers in the current situation (e.g. face masks and sanitising gel) remain available at competitive prices.
In order to avoid excessive prices of products which are considered material in this situation, the Croatian Government adopted a decision which sets the maximum price for certain products – being the price applied on 30 January 2020. This decision entered into force on 16 March 2020 and the State Inspectorate is requested to regularly report to the Ministry of Commerce on implementation of these measures. The decision covers medicines and medicinal products and a variety of protective medical equipment and hygiene products such as protective googles, clothes and gloves, sanitising gels and face masks. Setting a higher price (than the one applied on 30 January 2020) is possible only exceptionally (when the change occurred exclusively due to the increase of the product supply price that is irrespective of the trader’s will). By amendment of the decision of 30 July, various food products have been excluded from the scope of the decision.
Although the Government’s decision affects the traders in the first place, other actors in the supply chain should be cautious as well. Given the above, in addition to the supervision by the Ministry of Commerce, it is expected that AZTN will closely monitor the healthcare sector and other key industries to avoid anticompetitive practices, especially the ones related to abuse of dominant position.
4. Merger control
No changes in Croatia so far
For the time being, the notification obligations and the deadline regime of merger control in Croatia remain unchanged.
AZTN is continuing with its activities. From 4 June, AZTN re-established regular working hours and access to its premises with prior announcement.
Nevertheless, because of the situation, non-statutory deadlines might be prolonged, which should be taken into consideration when planning transactions, including in the relevant merger control clauses.
To enable business to organize around on-going competition matters we have prepared a quick overview of working regimes of AZTN and other national competition authorities available here.
