The Ukrainian Competition Authority issues recommendations to pharmacies and retailers against excessive prices for masks, examines price hikes for airline tickets and monitors prices for disinfectants and consumption basket products

As with other competition authorities, the Antimonopoly Committee of Ukraine (the "AMC") is responding promptly during the coronavirus outbreak. On 13 March 2020, the AMC announced that it would investigate any unjustified price hikes for medicines, face masks and other personal health protection items, the creation of artificial product shortages, and other abuses that generate profits from coronavirus fears.

On 15 March 2020, the AMC’s Kyiv Regional Office announced that it will examine the recent price hikes for airline tickets by Ukraine International Airlines ("UIA") [1] regarding the recent price hikes for airline tickets. The investigation is based on consumers’ complaints that UIA raised sharply the prices for tickets during the days before suspension of air travel to and from Ukraine. According to consumers, on 15 March the price of an economy flight from London to Kyiv was UAH 24,000 (approx. EUR 830), although previously it was less than UAH 10,000 (approx. EUR 345).

Excessive pricing and parallel price increases

At the end of February 2020, the AMC’s Kyiv Regional Office issued recommendations to 34 pharmacies to refrain from economically unjustified price hikes for face masks. Seven pharmacies have already reported their fulfilment of the recommendations. Information requests were also sent by the AMC to more than 50 pharmacies to provide the data on purchasing and resale prices for anti-virals, painkillers, anti-fever drugs and face masks. The AMC is also monitoring pricing for face masks by manufacturers and wholesalers.

On 13 March 2020, ten product retail chains in Kyiv and Kyiv Region received the AMC’s recommendations to refrain from unreasonable price hikes for face masks, disinfectants and long-term storage food. In its statement the AMC reminded the retailers about a special provision of the Ukrainian competition laws according to which a simultaneous price increase for certain products may constitute anti-competitive concerted practices if (і) several undertakings simultaneously raise prices for certain products which may lead to prevention, elimination or restriction of competition, and (ii) analysis of the situation in the market shows that there are no objective reasons for such similar conduct (so called "anti-competitive parallel behaviour"). The AMC traditionally applies such approach to the retail markets for fuel and liquefied petroleum gas when parallel price increases by petrol stations are observed allegedly without objective reasons for pricing similarities.

The AMC also conducts regular price monitoring of products in everyday consumption and requests retail chains to provide information on purchasing prices and resale prices for bread, grains, sugar, flower, most popular types of meat, and vegetables. The recent analysis shows that in certain regions the price hikes have been seen in buckwheat (50%), potatoes (60%), and onions and carrots (100%).

In 2009, during the swine flu pandemic, the AMC also thoroughly monitored prices for medicines and products in everyday consumption. The AMC reported that as a result of the investigations in 2009 the prices for face masks were lowered by certain pharmacies twice; the AMC also imposed fines on certain market players for excessive pricing.

Misleading claims about fake coronavirus treatments

With public anxiety increasing, the first television commercials claiming that a drug "has an effect on all complex viruses, including coronaviruses" have already appeared on Ukrainian television, while the World Health Organization has yet to confirm the existence of any drugs that cure against COVID-19.

In Ukraine, unproven claims of certain effects of drugs constitute violations of the Law on Protection from Unfair Competition by spreading misleading information that may induce consumers to buy the product. Such actions may cost the violator a fine of an amount up to 5% of the turnover of the undertaking for the previous financial year. Furthermore, it does not matter where such information is displayed – on packaging, in advertising materials, on the website, in the media or via social networks. The AMC currently conducts day-to-day monitoring of the information and advertisements on TV, in the press and social media to prevent spreading misleading claims of fake coronavirus treatments or vaccines.

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Anastasia Usova, The Ukrainian Competition Authority issues recommendations to pharmacies and retailers against excessive prices for masks, examines price hikes for airline tickets and monitors prices for disinfectants and consumption basket products, 13 March 2020, e-Competitions Competition Law & Covid-19, Art. N° 93914

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