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Europe Loosens Antitrust Reins But Warns Against Price-Gouging

March 23, 2020, 1:24 PM

European competition watchdogs gave businesses the go-ahead to team-up with rivals to maintain supplies of vital goods amid the coronavirus pandemic -- but warned firms that price-gouging of products such as hand-sanitizer gel and face masks won’t be tolerated.

In a joint statement on Monday, a panel of antitrust agencies said they won’t “actively intervene” when companies must cooperate to supply scarce products as the Covid-19 outbreak disrupts normal supply chains.

“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,” the European Competition Network, which represents national regulators from the 27 EU states, said in a website statement on Monday.

Companies usually risk hefty fines for swapping information on their stocks, prices and sales under rules that target illegal cartels. However the agencies said steps required to keep supplies running during the virus crisis “are unlikely to be problematic” as they wouldn’t restrict competition or would prove so useful they would justify any restrictions.

Firms concerned about potentially breaking the rules can reach out for guidance to national regulators, the European Commission or the European Free Trade Association’s competition agency, they said.

Europe’s Retailers Grapple With Biggest Disruption in Decades

The European agencies also echoed warnings in the U.S., where complaints have poured in to authorities in the past month, with outrage at everything from $80 hand sanitizer to a 50% hike in rice prices.

The ECN will “not hesitate to take action against companies taking advantage of the current situation by cartelizing or abusing their dominant position,” the regulators said.

Manufacturers can set maximum prices for their products which “could prove useful to limit unjustified price increase” by retailers, they added.

Italy’s antitrust and consumer authority is looking into practices of EBay Inc. and Amazon.com Inc. concerning sales of items such as hand-washing products, masks, and breathing equipment.

To contact the reporter on this story:
Aoife White in Brussels at awhite62@bloomberg.net

To contact the editors responsible for this story:
Anthony Aarons at aaarons@bloomberg.net

Peter Chapman

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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