Overview
Perhaps the first authority to warn about the perceived risks, the UK's CMA issued a warning on 6rh March 2020 to traders about taking advantage of the COVID-19 pandemic. CMA chief executive Andrea Coscelli said: “We urge retailers to behave responsibly throughout the coronavirus outbreak and not to make misleading claims or charge vastly inflated prices. We also remind members of the public that these obligations may apply to them too if they resell goods, for example on online marketplaces.” This warning was triggered by the rising cost of hand sanitisers. The CMA went on to warn that it would take enforcement action against those suspected of such conduct and, if necessary, would also consider requesting the Government to introduce price controls. It has created a taskforce to monitor market behaviour during the crisis. Details about the Taskforce, its mandate and how to lodge complaints can be found here.
Under 'normal' competition laws, charging excessive prices is behaviour associated with a dominant market position and difficult and time-consuming to prosecute. Some competition authorities, including the CMA, combine antitrust powers with consumer protection powers. The CMA intends to use its consumer protection powers and if necessary to request that the Government introduce emergency time-limited powers of enforcement in relation to conduct which would not rise to level of abuse of dominance. By way of example, Amazon earlier in March took steps to ban over 1 million products which claimed to provide a cure for the COVID-19 virus.
Other Member States, including Italy and Poland, have also taken action to intervene in the pharma sector (e.g. healthcare products, excessive prices for personal protective equipment supplies to hospitals).
Some practical steps you as a business can take include:
- Monitoring the prices of inputs you face;
- Monitor claims by rivals to see if they are misleading;
- Monitor your own sales and marketing activities to ensure appropriate behaviour;
- Document concerns and report them promptly to authorities such as the CMA or other national authorities who can take enforcement action.
