EU Competition Rules: Covid-19 Crisis Response

EU Competition Rules: Covid-19 Crisis Response

Businesses can play a crucial role to overcome the impact of the Covid-19 pandemic, in particular by ensuring the supply and distribution of essential products and services.  To do so, some forms of cooperation might be required between competitors or between companies usually present in different sectors. In this context commentators and lobbyists have called for the ‘suspension’ of EU competition law and national Member State competition laws.

On 30 March 2020 the European Commission issued a communication in relation to the antitrust rules in the context of the Covid-19 crises.  As we expected the European Commission is adamant that antitrust rules remain applicable in this time of crisis. The European Commission and the Member States’ Competition Authorities will continue to monitor closely and actively compliance with competition law during the crisis.

In order to help companies deal with this crisis, the European Competition Network – which represents the national competition authorities of the EU Member states – publicly stated, on 23 March 2020, that they ‘will not actively intervene against necessary and temporary measures put in place to avoid a shortage of supply’.

The European Commission encourages the uses of its Guidelines on Horizontal and Vertical cooperation agreements. Specific outside-the-box cooperation practices needs to be limited to what is strictly necessary and proportionate to provide benefits to respond the Covid-19 crisis.

For cooperation with an EU dimension, informal guidance can be sought from the European Commission via a dedicated mailbox setup on 30 March to limit the risks of exposure to antitrust violations. Submissions will be treated under the EU confidentiality policies but can be shared with competent National Competition Authorities. Local or national cooperation should be referred to the competent National Competition Authorities.

This is a very welcome initiative by the European Commission.  Businesses, however, are advised to engage with specialist competition law counsel, rather than directly contacting the European Commission.  There may be no issues to address or none that would warrant engaging the European Commission.  Moreover, businesses can usually benefit from legal privilege if they use specialist competition counsel from EU Member States – often a necessary element to defend a business’ interests from a regulator or third-party litigants.

The European Commission indicates that companies that take advantages of the Covid-19 crisis to breach EU antitrust rules, via a cartel or abuse of dominant position will be particularly scrutinized. Formal investigations might not start immediately but any problematic conduct is susceptible to lead to future sanctions.

The European Commission calls any company or consumer to continue reporting on cartel or abuses of dominant position, with a formal complaint or anonymously through the usual communication channel. The Commission’s leniency programme remains also fully applicable to any companies wishing to report a cartel they are involved in.

For any other issues arising in the area of unfair commercial practices or consumer protection, the relevant competent authorities are still available. The European Small Claims Procedure, the Online Dispute Resolution platform, the European Consumer Centers Network, the national out-of-courts resolution bodies continue to carry out their responsibilities during the Covid-19 crisis.

The Commission has been very helpful in providing a single contact point for COVID-19 competition law issues, but businesses are advised to use specialist external counsel.

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