EU antitrust authorities ally to combat shocks arising from the war in Ukraine

 

Antitrust authorities in Europe are investigating increasing prices arising out of Russia’s invasion of Ukraine.  The European Competition Network (ECN) has pledged that it will not enforce the EU competition rules against collaboration between competitors which seeks to combat severe supply chain disruptions caused by the war.

On 21 March the European Commission and the antitrust authorities of the member states issued a joint memorandum condemning what was described as Russia’s “unprecedented military aggression”.  The statement recognised that companies may need to cooperate to ensure supply chain continuity or to mitigate the shocks of EU sanctions.

The authorities in Austria, Italy, Germany, Ireland and Albania are investigating or monitoring national fuel markets but said that they would not intervene in the face of temporary measures that were “strictly necessary” to address the severe perturbations in the supply chains.

The coordinated response of the authorities reflects a similar approach to the temporary relaxation of antitrust laws during the height of the coronavirus pandemic.  This is the third asymmetric shock that has been experienced in 15 years.  Its effects will be felt disproportionately and unequally across the bloc depending on the exposure of the various states to Russian supply chains and their economic health before the war broke out.

However, some authorities have expressed caution that the situation is not a free pass to breach competition law.  This again echoes the approach during the 2008 economic crisis that although it was not ‘business as usual’ from an antitrust perspective, this did not mean that distortions of competition would go unchecked.

Italy’s Competition Authority has sent requests for information to the main national oil companies following a few days of “extraordinary” prices increases in diesel and gasoline.

Ireland’s Competition and Consumer Protection Commission has sent a letter to an undisclosed trade association warning of potential antitrust violations that could arise from statements about future fuel price hikes.

Meanwhile the European Commission has an open antitrust investigation against Gazprom and is consulting on a new temporary crisis framework under the state aid regime.

https://www.bwb.gv.at/fileadmin/user_upload/PDFs/202203_joint-statement_ecn_ukraine-war.pdf