Toughest quarter in regulatory oversight of competition

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The last quarter of the year means that companies should be getting ready for more intensive supervision by the Competition Council (CC). Our analysis of the CC’s decision-making dynamics over the last five years (a total of 51 decisions) reveals an interesting tendency: 40% of all penal decisions for breaches of competition law have been made in the last three months of the calendar year.
 
This peak season is followed by an off season, with a mere 16% of such decisions made over the period from January to March.
 
More information requests
 
The increased oversight intensity in the last quarter suggests that the CC is more likely to make demands on companies at this time of year than any other. We can now expect the CC to set shorter time limits and make additional information requests. On the other hand, companies having cases brought against them or operating in any of the CC’s oversight priority markets (household refuse management, retail, pharmacy, financial services, or transport services) should plan for protecting their interests well in advance. Otherwise the outcome might fall short of your expectations.
 
Steps to take
 
To be better prepared for this season, companies should take a number of steps:
  1. Be clear about the CC’s key findings likely to result from an investigation;
  2. Make sure that comprehensive information has been gathered as part of the investigation;
  3. Make sure the company has set out the objective reasons for its actions not only in practical terms, but also with legal and economic considerations.

These recommendations are useful to the CC as well as companies when it comes to drawing valid conclusions.

Implications for stakeholders
 
The CC’s tendency to make most of its decisions in the last quarter could adversely affect the interests of the government as well as private persons. Lack of comprehensive information or failure to make sure that the information received is consistent with the facts poses the risk of disputes and litigation, which means consumption of additional resources for all the parties involved: the CC, companies, and the courts. Companies can avoid this risk by communicating with the CC in a timely, reasonable and cooperative manner.
 
Performance results
 
This year the CC’s performance results might – probably for the first time – be considerably lower than expected, with only three decisions made in cases of alleged breaches. The Ministry of Economics has approved a target of 34 measures, which certainly includes some market research and prevention measures, yet complete information about any of those is not available. So the five-year statistics suggest that the last quarter is likely to bring a number of decisions, in particular those imposing penalties.
 
If you have any questions, please feel free to contact Maris Butans, a senior associate at PricewaterhouseCoopers Legal leading its EU and competition law practice (phone 26578281, maris.butans@lv.pwclegal.com).

 

 
Contacts
Maris Butans
maris.butans@lv.pwclegal.com
Tel: +371 26578281
Tel: +371 67094400
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