F1  Allianz – Țiriac Asigurări SA (‘Allianz’), Asigurarea Românească — Asirom Vienna Insurance Group SA (‘Asirom’), Societatea de Asigurare-Reasigurare Astra Asigurări SA (‘Astra’), Carpatica Asig SA (‘Carpatica’), Euroins România Asigurare-Reasigurare SA (‘Euroins’), Generali România Asigurare Reasigurare SA (Generali), Groupama Asigurări SA (‘Groupama’), Omniasig Vienna Insurance Group SA (‘Omniasig’), and Uniqa Asigurări SA (‘Uniqa’) (together ‘insurance companies’) were members of the insurance professional association Uniunea Națională a Societăților de Asigurare și Reasigurare din România ‘(UNSAR’). [paragraph 107]

F2  According to the applicable regulations, the insurance companies were allowed to establish insurance premiums according to risk categories and policies. The conclusion of motor liability insurance policies was mandatory for car owners. Some insurance companies had a ‘low appetite for risk’, applying high insurance premiums—Allianz and Generali—and others had a ‘high appetite for risk’ and were ‘fighting for market shares’ and hence applied low insurance premiums—Euroins, Astra, Carpatica, and City Insurance. [paragraphs 36–39]

F3  The high level of claims in this market, as well as the insurance companies having a recourse action, required contact between competitors. [paragraph 127]

F4  The products on offer were homogenous and the only competitive element was the price. [paragraphs 67–69]

F5  During the investigated period of 2012–2016 there was an extensive exchange of information facilitated by UNSAR between the insurance companies, all of them UNSAR members, thereby engaging in concerted practices on motor liability insurance. [paragraphs 33, 106–7]

F6  Evidence collected (i) from an insurance company director and (ii) in the leniency procedure revealed that the discussions pertained also to debt collected between the insurance companies for motor liability in recourse actions. [paragraphs 121–2]

F7  The main bad debtors were Carpatica, Euroins, and Astra, which practiced dumping prices. Their creditors threated them with actions in court during some of the UNSAR meetings. In response to the argument that the cash-in did not cover the debts, the competitors/creditors suggested an increase in tariffs. The creditors pushed for a change in the business model practiced by the dumping tariff companies that had huge debts in recourse actions. During said meetings, the creditors also proposed a change in the norms applied by the regulator—some of them later implemented in legislation. One of the creditors said that they were not willing to sponsor the dumping prices of the bad debtors with their own money. [paragraph 124]

F8  A dawn raid at UNSAR revealed evidence including delegate lists and minutes from the meetings, and emails confirming the discussions between members on the need to increase tariffs. The talks on the increase of tariffs were confirmed by the Generali press release in 2013 announcing the increase in tariffs and the Allianz press release in February 2016 announcing increase in tariffs by 5–10% in March of that same year. [paragraph 112]

F9  Between 2011 and 2016, the medial premium increased for all categories of motor liability insurance. [467]

F10  In 2015, the Financial Supervisory Authority (‘ASF’), the national regulator of the domestic motor insurance markets, initiated talks to resolve the market problems which caused frequent interactions between competitors, in order to monitor the situations where some companies were not compliant. ASF took several measures in 2015 aimed at reducing the crisis induced by the insolvency of two operators and the withdrawal of the third one. Tariffs were increased by the rest of the operators in the market against the background of unpredictability of the damage claims. [paragraphs 49, 431–34]

F11  From 2015, the insurance premiums would remain the same, regardless of the distribution channel, so the broker could not direct a customer towards a certain insurance provider, by cutting from its own commission. Consequently, the customer would receive the same premium regardless of the offer, different brokers, or even the insurance operator itself. This limited competition between brokers and increased transparency. [paragraphs 59–60]

F12  In November 2016 the Romanian government enacted a limitation to the tariffs for motor liability insurance, applicable for six months, after which the premiums remained in place, even though they were freely established by the insurance companies. [paragraphs 471–75]

F13  Most of the policies were concluded by insurance brokers who compared offers from various operators using intranet platforms communicating with insurance providers via securitized communications protocols. These communication protocols were used by the insurance providers to obtain information from all of their competitors, by using their own resources, brokers, and external market research operators. [paragraphs 56–58]

F14  During the price war, motor liability premiums plunged, affecting profitability; hence the UNSAR members sought methods to improve financial situations. During UNSAR meetings some of the participants requested Euroins and Carpatica, the largest default debtors of recourse actions, to increase their tariffs. Euroins promised an increase of capital and/or increase in tariffs. New increases of 10–15% in tariffs were announced by UNSAR in 2013 and 2014. Generali also announced an increase in tariffs of 15–16%. Groupama announced during a UNSAR meeting that it reported to the regulator an increase of tariffs of 50%. An article in an online magazine revealed that Allianz prepared the increase by 5–10% of tariffs. City Insurance, which was not a member of UNSAR, was the first to increase the tariffs for motor liability insurance; the other insurance companies, members of UNSAR, followed with various increases in tariffs. The increase in tariffs was different by operator, ‘according to the appetite for risk of each, companies such as Euroins, Astra Carpatica and Asirom wanted a large percentage of policies in their portfolio, and practiced lower tariffs than Generali, Uniqa, Allianz, Groupama and Omniasig.’ [paragraphs 108, 112, 132, 146, 151, 153–54, 173]

A1  Decision 63/2018 (‘Decision’) raised the following issues:

1. (i)  the conditions applicable to the contact between competitors in order to engage in concerted practices;

2. (ii)  the role of a professional association, UNSAR, as facilitator of an infringement where communications between members are abundant due to the nature of the market; and

3. (iii)  the differentiated behaviour of the undertakings involved in concerted practices and whether it precludes collusion.

A2  The Decision held that the infringement was based on the discussions that took place during UNSAR meetings; it omitted however to explain the nature of the discussions. The motor liability insurance market, in stark contrast with other insurance markets, generates legal relationships between competitors. In case of damage caused by the owner of an insured vehicle, the victim may file for claims directly with their own insurance company, hence transferring the recourse action against the motor liability insurer. The high level of claims in the market was noted in the Decision, but not fully discussed from the perspective of the implications and the tensions generated. The direct relationship between the competitors ought to be analysed in-depth in order to discern the unavoidable communications from the unnecessary illicit ones. The Decision failed to ascertain that a discussion between a creditor and a default debtor may be inevitable, instead concentrating on the illicit nature of the discussion on prices between competitors.

A3  The Decision held that UNSAR acted as a facilitator of the concerted practices by means of enabling circulation of information between its members during the meetings. Despite the fact that it acknowledged the abundant communications between competitors that was encouraged by the national market regulator ASF, the Decision overlooked the consequence of such encouragement and the difficulty of preserving the discussions within allowed parameters of information when tensions are generated by market circumstances.

A4  Moreover, the transparent nature of the market, enhanced by several measures taken by the national regulator ASF and the Romanian government, was not interpreted correctly in the Decision. In a transparent market, due to the abundant availability of information on prices from various sources—as noticed in the Decision—collusion is rendered unnecessary in order for the undertakings to adjust their price policy according to competition.

A5  The Decision was the epitome of erroneous application of competition rules, when oriented exclusively on the strict interpretation of the law and when completely detached from the economic context. The domestic motor insurance liability market was long divided into two categories: one category involved insurance companies that practiced dumping tariffs and failed to meet claims in case of insurance events; the other involved insurance companies that applied tariffs based on prudency rules and paid the claims. The data presented in the Decision revealed that Euroins, Carpatica, and Astra reached collectively 55% of the market during 2012–2015. Instead of being investigated for dumping practices, the three companies were qualified in the Decision as having ‘a high appetite for risk’ and ‘fighting for market shares’.

A6  The dumping practices and the constant failure in meeting the claims of the three insurance operators were notorious and caused the tensions in the market—also referred to as a price war—which intensified in 2015–2016 when two of them—Carpatica and Astra—eventually filed for bankruptcy and exited the market. The Romanian Competition Council (‘RCC’), instead of investigating the dumping practices earlier and accordingly sanctioning the insurance operators that increased their market share by infringing competition rules, ignored the real causes of the situation and applied Article 101 of the TFEU to all of the operators, including the ones that were compelled to increase tariffs, in order to compensate the losses from the failed claims against the bad debtors. The RCC not only intervened too late to remedy the cause, but also created a distortive effect to the market.