Ceilings on energy prices, RCA tariffs and the commercial surcharge on basic foodstuffs, maintained in the 2024 election year

The ceilings on the price of energy, RCA policies and the commercial addition to basic foods will continue this year, due to the four rounds of elections - European, local, parliamentary and presidential, but the competition authority will ensure that those measures do not distort the market , said yesterday, Bogdan Chiriţoiu, the president of the Competition Council, during the annual press conference in which he presented the activity report of the public institution for 2023 and the priorities for 2024.

Bogdan Chiriţoiu stated: "Our duty is to be in dialogue with the Government, to support it in dimensioning these interventions in a way that is appropriate, not excessive. This is what we will do in the coming months: we will discuss with the Ministry of Agriculture to see - let them decide in the end, but also with our support - if the current ceiling is still necessary or, as the Prime Minister said, we can move towards a voluntary mechanism. At RCA we have to discuss to see if these ceilings should be extended and what are the definitive solutions and what can be improved in that market. The ceiling is not enough in this area, but somewhere you have to go to the substance. Regarding energy, which I admit is a very complicated subject because it affects a lot of people, I think that measures must already be prepared for what we will do when we get out of this capping mechanism. (...) It is hard for me to believe that this year will not be marked by the fact that we have five rows of elections, combined or not. Let's be serious! It is not credible that so many elections do not have an impact on economic and social activity. But we have to make sure that the damage is as small as possible".

Regarding the price of basic foods, the head of the Competition Council specified that the public institution will adjust the online platform Monitorul Prezireulir, so that all basic products appear in one place, in a special section, so that customers can see the differences in prices between stores.

Regarding the rates of RCA policies, rates that are now capped, Mr. Chiriţoiu said that the institution he leads must make sure if the insurance market is functional through the lens of extending the capping and believes that the capping every 3 months should be replaced by a measure in the longer term or by leaving the market open.

The President of the Competition Council showed that a viable measure for RCA would be the existence of a cost reference for the repair of vehicles damaged in traffic accidents: "We know how much RCA should cost, there is a reference regarding the commission of brokers and other costs, but we do not have a reference regarding the cost of repairs. A mechanism should be found to establish a regional reference of these costs, because the insurance companies claim that the RCA tariff does not cover the cost of the work performed in the services. And this is demonstrated by what we found in the market, namely that many companies prefer to exit the RCA market, and new companies entering the insurance market offer other types of insurance, less RCA, which shows that the respective activity is not it is profitable, attractive for market players".

Regarding the capping of energy prices, Mr. Chiriţoiu showed that the tariffs have largely returned to normal values, they have decreased in the market, being below the capped level, and the Government must see if it still makes sense to support this expenditure, especially in the conditions in which our country is the only member state of the European Union that is in the excessive deficit procedure.

The head of the Competition Council said: "Now we have an incident of the law that established that energy prices are capped until March 31, 2025, but during the current year the next steps regarding the exit from this capping mechanism should be prepared and found together with ANRE the solutions for the energy market to function well and with reasonable prices for end customers".

• The investigation into collusion between banks regarding the manipulation of ROBOR is nearing completion

Mr. Bogdan Chiriţoiu also mentioned the priorities of the institution he leads for the year 2024, these referring to the analysis of economic concentrations, the granting of state aid, as well as the completion of some investigations started a few years ago.

His lordship specified: "We want to finish the investigations on the banks that started two years ago and one year ago, we have to complete an investigation in the construction materials sector - more precisely in the cement producers - and an investigation in the companies producing chicken meat. At the banks, we have not yet finished processing all the collected data. There are two investigations. In one we look at the possible manipulation of the ROBOR index. The second investigation looks at how banks change customer history data and whether this mechanism of de-scoring a customer who goes to more than one bank has the effect of preventing the customer from moving from one bank to another. (...) There are hundreds of emails. Terrabits of data have been collected. We cloned the information from the PCs and read mail by mail in the presence of the lawyers of the concerned banks. At the end of the analysis the report that will be drawn up will be discussed with the legal department because he has to stand in court. If we issue sanctions, they will be large, tens or hundreds of millions of euros. The intention is to have a decision this year."

Regarding mergers, the head of the Competition Council believes that in 2024 there will be a record number of mergers, among them the takeover of Telekom by another telecommunications operator, the consolidation of the positions of some banks in our country through the takeover of banking institutions smaller, but also the completion of the transaction regarding the takeover of the Profi store chain by Mega Image, a takeover that will have an impact in several localities in the country.

• Positive balance for 2023

Regarding the activity carried out last year by the Competition Council, from the report presented yesterday by the president Bogdan Chiriţoiu, it appears that 24 investigations were launched into possible violations of the Competition Law, the most in the last 12 years, in areas such as electricity distribution, the market for banking credit services for natural persons, the production and/or marketing of sunflower oil, sugar and butter, the market for car parts or the market for the maintenance of national roads and highways. The quoted document states that of the total number of investigations launched in 2023, more than 56% represent cartel agreements.

Also last year, the competition authority completed 14 investigations regarding the violation of the Competition Law, imposing fines totaling 160 million lei (32.1 million euros), of which 77% represent sanctions applied for agreements between companies. Among the most important fines are:

- 123 million lei (25 million euros) for SEROM, Dante International S.A., Altex Romania S.R.L. and Flanco Retail S.A., for participating in an anti-competitive agreement on the television and mobile phone sales market

- 20.5 million lei (approximately 4.1 million euros) for the companies Dataware Consulting, Kontron Services Romania and Tema Energy, for participating with rigged bids in the tender organized by the Ministry of Internal Affairs (MAI) for the creation of the center for providing electronic services

- 14.3 million lei (about 2.9 million euros) for the companies Albalact, Covalact and Dorna Lactate, part of the French group Lactalis, because they refused to provide access to some information during the unannounced inspections carried out as part of the investigation into possible deals of setting prices on the butter production and marketing market.

At the end of 2023, the Competition Council had 54 ongoing investigations regarding the possible violation of the Competition Law, of which 44% concern cartel agreements.

Regarding state aid, last year the Competition Council was involved in the development of support measures for the economic environment, involving European (including PNRR) and national funds in the amount of 42.3 million lei. Among the support measures in which the competition authority was involved are those aimed at: investments in the production of electricity from renewable sources for companies in the agricultural and food sector; the national program for the development and support of the food industry - Investalim; the national program for the development of domestic production of construction products and materials - Constructplus; the analysis of projects of normative acts aimed at the realization of hydropower facilities, wind farms and photovoltaic parks, with European funding, through RePowerEU and the development of investments in the field of offshore wind energy in the Black Sea; supporting the film industry.

The cited report states that, in the cases where the companies attacked the decisions of the Competition Council, at the end of 2023, out of the 220 cases regarding competition, in 89% the decisions of the High Court of Cassation and Justice were favorable to the institution led by Bogdan Chiriţoiu, who lost in the last three years only one case.