The factual background of the case is as follows. The Moldovan market of issuance and trade with “Green Card” insurance of mandatory civil liability for automobiles is divided among a limited number of Moldovan insurance companies. These companies form the National Bureau of Automobile Insurers (BNAA) which in September 2013 has excluded two of its members, namely Moldcargo and GRAWE Carat Asigurari, for alleged breach of their obligations as Green Cards’ issuers. As a result of BNAA decision, the excluded insurance companies where deprived from the right to issue and trade with Green Card insurance in Moldova. GRAWE Carat Asigurari refused to accept the decision of BNAA and initiated legal proceedings in Moldovan courts and file a complaint with the Moldovan Competition Council claiming that its exclusion from Moldovan “Green Card” market was contrary to the competition regulations.
In May 2014, the Competition Council passed its first decision in this case (Decision No SSP-16), which has actually stated that no competition on Moldovan Green Card market exists due to the fact that this market is highly regulated and therefore the Green Card participants “are not able to influence: price, production, product’s quality, variety or innovation, which would lead to the increase of consumers’ welfare”. As such, the Competition Council resolved that there could not have been violation of Competition Law.
Afterwards, in July 2014, the Competition Council has passed a second decision in this case (Decision No SSP-26), which may serve as an evidence that the position of the competition authority has been revised to a certain extent. The Council stated that despite high regulation on Moldovan “Green Card” market, the insurance companies still were able to compete for the resources of the market and therefore needed to comply with fair market practices. The Competition Council found that, when depriving GRAWE Carat Asigurari from the right to issue and trade Green Cards, BNAA have used erroneous information which amounted to unfair competition from the side of BNAA members. As a result, the Competition Council have applied rather moderate fines for unfair competition to certain BNAA members ranging from MDL 69,688 (about EUR 3,700) to MDL 686,728 (about EUR 37,120).
Absent complete information on this case, it would be premature to make a comprehensive legal assessment over the conclusions of the Competition Council. At a first glance, however, one may say that BNAA decision is rather an anticompetitive agreement, than unfair behavior in the form of dissemination of erroneous information. Moreover, in case of anticompetitive agreement, the penalties for BNAA members who voted to exclude their competitors would have been significantly higher.
The final say of the Competition Council in this “Green Card” story reminds of an old saying “Wolves are fed and sheep are save”. Further developments of this case might reveal whether this saying would be true or not.
For additional information on Competition Law regulations in Moldova or legal advice on your business needs, please contact Head of the Competition Service Line of ACI Partners Law Office.