In the last few months, the Commission for Protection of Competition of the Republic of North Macedonia (the “Commission”) has stepped up its enforcement efforts of antitrust rules and food supply chain practices in the country. Following lengthy investigations, the Commission has cracked down on a number of cartels and initiated misdemeanour procedures against multiple companies, signalling the start of a far stricter oversight of the market. The investigations could result in significant sanctions for the infringing companies, including a fine of up to 10% of the total turnover generated by the companies during the previous business year, as well as a temporary ban on performing a specific business activity for a period of 3 to 30 days.
Focus on retail – cartel investigation
In February, the Commission announced that it had conducted a dawn raid at four retail chains and in the chambers of commerce in which these retail chains were associated. The Commission carried out an inspection based on suspicions that several supermarket chains involved in the retail trade of food and non-food products may have violated the Competition Law, which prohibits cartels – specifically, agreements and coordinated behaviour between two or more companies aimed at distorting competition. During the inspection of the companies’ business premises, official documents and electronic communication between the involved companies were inspected, uncovering evidence of an illegal agreement to coordinate their actions and refrain from purchasing goods from suppliers who introduced a new price list for their products. They also publicly announced such a decision through the media. Based on these findings, a formal misdemeanour procedure was initiated and is currently ongoing.
Insurance sector under scrutiny – another cartel investigation
On 4 March, the Commission announced that it had detected another cartel – this time in the insurance sector. Acting upon a request from the Ministry of Finance, the Commission has initiated proceedings against 10 insurance companies in North Macedonia, based on suspicions that they may have formed a cartel, which is directly detrimental to consumers and businesses in the country. The 10 insurance companies are suspected of engaging in coordinated behaviour in April 2024, replacing effective cooperation with the risks of unhindered competition in the relevant market. Their behaviour is believed to have been aimed at distorting competition by increasing the sale price of the premiums/commission for performing insurance activities (administrative surcharge). This surcharge is part of the insurance premium for motor vehicle owners, covering liability for damages caused to third parties, and its payment is mandatory during motor vehicle registration.
The Commission has informed that it conducted a series of inspections at the business premises of the insurance companies, during which evidence was found showing that the decision to increase the auto liability premium prices was made as a result of coordinated behaviour, constituting a cartel. Based on these findings, a formal investigation was launched and is currently ongoing.
Unfair trade practices – also under the radar
The Commission has also started to actively enforce the new Law on Prohibition of Unfair Trading Practices in the Supply Chain of Agricultural and Food Products. Recently, it initiated misdemeanour proceedings against two companies active in the trade of agricultural and food products through their retail networks in North Macedonia, due to their non-compliance with the provisions of this Law. Potential fines for infringements of this Law may reach up to EUR 20,000.
Conclusion
These latest developments are expected to signal to the market that the Commission intends to take a far more proactive and aggressive approach to enforcement in the coming period. It is left to be seen whether such a policy change would contribute to ensuring effective competition on the market and curtail inflation that has significantly impacted citizens and businesses over the past few years.
The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.
