Antitrust law and legislation in Romania during Covid-19

The ongoing Corona crisis poses several 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 an antitrust perspective. The antitrust rules do not simply cease to apply during the crisis, but 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 Romania.

The Romanian Competition Council (RCC) has partaken in the joint statement of the European antitrust authorities and the European Commission (under the ECN) on the application of competition law in the face of the current crisis.

According to this statement, the RCC – similarly to the European Commission and antitrust authorities of other Member States – will not actively intervene against necessary and temporary measures put in place in order to avoid a shortage of supply, since they would either not amount to a restriction of competition or would generate efficiencies that would most likely outweigh any such restriction.

An example of such a measure is that companies can act in a coordinated manner to avoid shortages of essential products and ensure their balanced distribution. For example, retailers can coordinate freight (to ensure supplies of basic products in all areas) and home deliveries (for individuals unable to leave home). Nonetheless, these types of coordination cannot be unduly extended and must be strictly proportionate to the envisaged scope, i.e. ensuring availability of essential products for consumers at fair prices.

Further to the above and the temporary framework of the European Commission for applying competition law provisions in the COVID-19 pandemic, the RCC officially announced that it would align to the aforementioned policy. In this respect, in the general crisis generated by the pandemic, pharma companies may need to cooperate with respect to the production, stock management and, potentially, the distribution of medicines in such a way that they would reduce competition on certain products in order not to neglect the production of other medicines. Additional information on the RCC communication can be found here.

Moreover, companies must ensure that their products are available at competitive prices. To this end, managers of online platforms can impose measures to limit abusive price increases for basic products and services. The RCC reminds companies that the applicable competition law allows producers to set maximum prices for their products, which could prove useful in limiting an unjustified increase in prices at the distribution level.

At the same time, the RCC (and other antitrust authorities) declared that they would take all possible actions against businesses which are taking advantage of the current situation by cartelising or abusing their dominant position. The aim of these actions is to ensure that products considered essential to protect the health of consumers in the current situation (e.g. face masks and sanitisers) remain available at competitive prices.

The RCC warns that the current crisis must not be used as an excuse for anti-competitive behaviour, including:

•  increasing prices without an objective justification;
• exchanging sensitive information (prices, commercial policy, etc.);
• excluding competitors from the market;
• abusing a dominant market position; and
• concluding anti-competitive agreements with competitors to eliminate the sale of a particular product or service, fix prices or allocate customers or territories between competitors.

The statement of the RCC is - by its very nature - very generic. Importantly, the antitrust authorities declared the possibility of consultation in case of doubt as to the legitimacy of the planned cooperation. It also cannot be excluded that the RCC (independently or under ECN) will prepare and publish more detailed guidelines regarding its permissible forms and the principles on which it could be carried out.

There was no separate communication from the RCC concerning special rules for dominant companies during the crisis. However – similarly to the cooperative measures referred to above - the RCC will not actively intervene against necessary and temporary unilateral actions put in place in order to avoid a shortage of supply taken by the dominant companies.

However, the RCC emphasises it is closely monitoring the behaviour of companies and warns that it will not hesitate to act if market players engage in abusive practices (e.g. excessive pricing). In this respect, given the increases in demand triggered by COVID-19 for hospital and industrial supplies, the RCC is already investigating certain businesses for fixing exorbitant prices for protective medical and labour equipment.

Like other businesses and offices, the RCC is not able to interact with the general public and participate in the exchange of physical documents until 16 April 2020. To protect citizens' rights, however, the RCC will continue to receive notices regarding potential violations of competition law via the post, e-mail or through the following platforms:

• Notices and petitions: https://portal.consiliulconcurentei.ro/solicitari/login
• Competition whistle-blowing: https://report.whistleb.com/ro/consiliulconcurentei

For the time being the notification requirements and the deadlines for reviewing mergers in Romania remain unchanged. There has been no communication (yet) from the RCC regarding expected delays in reviewing notifications and issuing merger decisions.

However, warnings regarding expected delays were issued by the competition authorities of other countries. Thus, the risk of such delays should be considered when planning transactions, including in the merger control clauses of the transactional agreements.

Mergers saving failed firms can be cleared under less strict conditions and, subject to the approval of the RCC, could be implemented before the issuance of the merger clearance decision.

For more information on competition law issues in Romania, contact your regular CMS advisor or local CMS experts Horea Popescu, Cristina Popescu and Claudia Nagy.