The ongoing Corona crisis poses a number of problems – including legal ones – for businesses in all countries. The new market challenges may require cooperation between companies or taking unilateral actions that are particularly sensitive from the antitrust perspective. The antitrust rules do not cease to apply during the crises, but the authorities can be more flexible. Thus, companies must ask themselves what freedoms the current rules give them to take actions that would improve their situation.
The competition authorities have already confirmed in public statements that they are willing to accept certain justifications to overcome or reduce the negative impact of the crisis. In a joint statement dated 23 March 2020, the European Competition Network (“ECN”) - which encompasses the national competition authorities in the EU member states and the European Commission - acknowledged “that this extraordinary situation may trigger the need for companies to cooperate in order to ensure the supply and fair distribution of scarce products to all consumers.” Some countries (e.g. Norway, in the case of the entire transport sector) have also applied a temporary exemption from the ban on cartels.
The current crisis leaves room for specific actions by the competition authorities at national level. Thus, it is important to look at the current state of play on antitrust rules in various jurisdictions. Here below we have summarised the opportunities and risks under competition law arising from the crisis in Bulgaria.
On 25 March 2020, the Bulgarian Competition Protection Commission (the “CPC”) announced that it has partaken in the joint statement of the ECN on the application of competition law in the face of the current crisis.
The CPC is of the view that it is important the State to ensure that certain necessity goods such as essential food products will remain available. The CPC understands that the emergency situation due to the coronavirus may create the need for companies to cooperate to guarantee the delivery and fair distribution of scarce products to all consumers. In the current circumstances, the CPC will not actively intervene against necessary and temporary measures put in place in order to avoid a shortage of supply.
If businesses have concerns regarding the compatibility of their cooperation initiatives with Bulgarian and EU competition law, they can ask the CPC at any time for unofficial guidance.
Nevertheless, the CPC will not hesitate to take action against companies that are using the current situation to cartelise the market for products, which are essential for the protection of the health of consumers, such as face masks and sanitising gel, or that otherwise infringe the rules of the fair competition.
3. Abuse of market power
As noted, it is of the utmost importance to ensure that products considered essential to protect the health of consumers in the current situation remain available at competitive prices. The CPC will therefore not hesitate to take action against companies which are taking advantage of the current situation by abusing their dominant position. The CPC will closely monitor particularly the pharmaceutical market and the food industry.
The CPC is of the opinion that setting maximum prices for products may be useful in the current climate to limit unjustified price hikes by distributors. However, such practices should not amount to retail price maintenance.
The CPC asks for proactive behaviour by Bulgarian society, by reporting suspicious increases of the prices of essential products, or in case of shortages of such products or other practices of retailers during the crisis that could have a negative effect on their competitors or consumers. Reports can be submitted on: [email protected].
4. Merger control
For the time being, the notification requirements and the timeframe for reviewing mergers in Bulgaria remain unchanged.
However, delays can be expected. The CPC has announced that it will accept documents only if submitted by post or e-mail, and that it will not hold closed or open hearings under pending proceedings until 13 April 2020.