Covid-19 poll out on Competition Law

/ / Legal x-rays

At a time when the economy is hit hard, competition rules increasingly play a central role in guaranteeing a level playing field between businesses.
In view of developments on national level and following EU practices in cooperation with the European Competition Network (ECN), the Hellenic Competition Commission issued a Press Release on March 7th 2020, indicating that it will consider as an immediate priority any relevant to the pandemic cases that come to her attention. Such cases can be either trust-building (either horizontal or vertical) between companies or even the abusive behavior of companies with a dominant position in the market. It should be noted that competition law requires companies to confront and cope with the social and economic conditions by pursuing an autonomous trade policy via measures that neither distort free competition and without excluding their competitors from the market nor exploit the consumers, e.g. with overpriced products. Indicatively, we mention some business practices, which can potentially alter the conditions of competition, such as setting the purchase or sale prices or setting the resale price,
• the restriction or control of the production and distribution of health products or even items for immediate consumption,
• the separation of markets between competing companies,
• the dependence of an agreement to accepting additional benefits (tied sale of two different products), which by their nature or in accordance with commercial ethics are not related to the subject matter of these agreements.
The ECN acknowledged that this emergency situation could potentially encourage companies to work together in order to ensure the supply and the proper distribution of products. Given the fact that these are unprecedented times, the competition authorities (ECN members) will not intervene regarding such necessary and provisional measures to avoid disruptions in the supply chain. Some indicative examples may be the following:
• The manufacturer of personal hygiene products may set the maximum retail prices of his products by the retailers to the buyers/customers.
• In a food distribution network, the producer may set recommended resale prices for these products.
• In case of import of a new product, even the imposition of a resale price may be justified for short periods of time (e.g. promotions/campaigns of 2 to 6 weeks).
• A main internet platform can set a price limit for the products available through it.
Recently and following numerous consumer complaints, significant price reductions on sanitary products (e.g. antiseptics) were observed at various retail outlets. Also, many of these products were also found deficient similarly observing. This may be due to business practices in the distribution chain that fall under the provisions of Law 3959/2011. The Competition Commission reports an investigation through which it submitted supply requests to a large number of businesses active in the production, import and marketing of medical supplies as well as specific surgical masks and disposable gloves, as well as other products such as antiseptic wipes and antiseptic solutions.
At the same time, on March 27th 2020, it established an Impact Team against Covid-19 anti-competitive practices. The task of this group is to inform businesses and consumers about the application of competition law in bulletin and Q&A format, in order to inform the public about EU investigations and procedural issues. The aim is here to present the actions of all the national competition authorities and the European Competition Commission in this neuralgic time.
In conclusion, for measures which do not appear to be troubling from the competition point of view, since either they do not constitute a restriction of competition under Article 101 TFEU (and Article 1 of Law 3959/2011) or contribute to improving the production or distribution of products that are likely to offset such limitations, they are permitted in order to ensure that essential products continue to be sold at competitive prices. And that the legal structure of the competition landscape will remain “healthy”.
Our Comment
During this transition to digital sales, artificial intelligence-enhanced software platforms and tools can be enlisted to automatically monitor prices, predict them or even manipulate them, resulting in competition distortion beyond the reach of current authorities.