Competition Council Raises Concerns Over Potential Price Alignment in New Consumer Protection Regulation

The Romanian Competition Council has officially expressed its concerns to the National Authority for Consumer Protection (ANPC) regarding a new regulation that could have significant effects on pricing transparency and market dynamics. The Council’s concerns were raised in response to a draft ordinance that was released for public consultation on March 18, which proposes that businesses, including importers, be required to display their commercial markups for each product both in physical stores and online.

According to Bogdan Chirițoiu, President of the Competition Council, the main concern is the potential for upward price alignment. “Our fear is that when you make markups transparent, everyone might raise their prices to the maximum allowable markup,” Chirițoiu explained on Tuesday in a competition-related event held at ASE. The Competition Council is particularly worried that this could lead to a situation where prices across the market become uniformly higher, as businesses may feel pressure to match the highest prices rather than compete on price.

In addition to concerns about price increases, the Competition Council also warned that the new regulation could increase the pressure large retailers exert on smaller suppliers. “If I am a large chain and see that a smaller supplier is selling at a lower price to my competitor, I might go to that supplier and demand the same price, even though it is cheaper than what I am willing to pay,” Chirițoiu added. This type of behavior could potentially undermine the competitive position of smaller suppliers, forcing them to either raise prices or accept unfavorable terms.

The Competition Council emphasized the need for careful consideration of the potential negative effects of this regulation. While it acknowledges the importance of price transparency, the Council is cautious about unintended consequences, particularly for small and medium-sized enterprises (SMEs) that could face increased pressure from larger players in the market.

As the draft ordinance is still under public consultation, the Competition Council is working with the ANPC to ensure that the final version of the regulation avoids these potential pitfalls. The outcome of this consultation will be closely monitored, as it could significantly impact market dynamics and the ability of smaller suppliers to compete fairly in the Romanian marketplace.

The initiator, the ANPC chief, Cristian Popescu Piedone said thought that the project is still in the works. “It is with the European Commission, we expect a response in 60 days. During this time we are negotiating legal terms with those involved, plus the two ministries.”

On the other side of the fence, the project is being harshly criticized by retailers.

Iulian Stanciu, executive chairman of eMag.ro declared at the same competition event alongside Bogdan Chiritoiu that the ANPC project regarding the display of the commercial mark-up on the shelf “is an aberration and should be withdrawn”. “It starts from the premise that entrepreneurs and retailers are speculators, who should be judged. Such proposals seriously harm entrepreneurs”, he said in a conference organized by the Competition Council.