Council of Competition in the News

The Council of Competition, through its chairman, Bogdan Chiritoiu, announced it would reward by 1% of the value of fines, but no more than 100,000 Euro, entities and persons who bring to its attention relevant cases. He explained that there is a possibility of anonymous notifications to the institution. He also mentioned that the competition authority started, before 1 October 2015, 10 investigations as opposed to 9 in the same period in 2014, and has closed 11 investigations as opposed to 9 last year. Fines this year amount to 3 million euros. At the same time, the Competition Council has been running 61 investigations as opposed to 67 in 2014.

By the end of this year, the competition authority will put together a price monitoring tool, a website with prices applied by the main retailers for basic products. After the June 1st drop in VAT for foodstuffs from 24 to 9%, the Competition Council monitored prices in around 600 regular stores and 6 supermarket chains to see the effects of the drop. Here is the chairman of the institution, Bogdan Chiritoiu:

“There are good signs, it seems that competition has been working, companies have transferred the drop in VAT to shelf prices. We would like to make sure that the market continues to function properly, and we would like to expand this monitoring process, to create an on-line platform for consumers to be able to compare prices in their region for products that interest them. Very importantly, we would like to see more cooperation from store chains, to have information straight from them. We will be providing the platform, the website, but we need the cooperation of the store chains, in order to have information from them. We are at the stage where there is agreement in principle from the chains for this cooperation, so over the next few months we should see how things unfold from a technical point of view. Our target is to get the project going by the end of this year.”

A lot of consumers in Romania have criticized the fact that, in spite of the drop in crude oil prices worldwide, the price at the pump has not reflected this downward trend. Here is Bogdan Chiritoiu again:

“As opposed to the food market, where competition is very strong, with lots of store chains present in Romania for which competition has an effect in terms of prices, the competition on the oil market is less strong. There are a few companies present, but the market is dominated by a very large entity which sets the tone, and we would like to see more competition on the fuel market, and to facilitate the creation of new points of sale, new pumps and new gas stations. This is a project for the medium term, it might yield results in a few months at best. The international market is very dynamic right now. From our figures, Romania had among the biggest, if not the biggest, drop in fuel prices before tax. If we remove the impact of the government, and look only at the prices demanded by the oil companies, compared to last year we have a drop of 20 to 24% in the prices of diesel and gasoline before tax. If we factor in taxes, then the price at the pump have a smaller drop, which is within the European trend in any case, so we don’t have lower drops than in the other states of the Union. Therefore we will be monitoring for a few more weeks, and I hope things will settle down, and then we will be able to draw a conclusion, to see if the drop in prices over here are significant enough, similar to other states of the EU.”

Recently, the Competition Council fined 10 natural gas companies for a total of almost 210,000 Euro for unfair practices, with an aim to set a single price for standard use installations. Four companies have owned up to unfair practices, thus getting the benefit of a 20% reduction in the fines. The Competition Council has underlined the fact that it encourages the companies engaged in unfair practices to contact the authority, admitting to their violations and providing proof of collusion. In this way, those companies would get significant reductions in their fines, depending on when they contact the authority and the value of the information they provide.