07.05.2020

Corona: Competition and Anti-Trust Law

This article is part of our continually updated corona resource center.

Due to the corona virus, companies are currently facing special challenges. Increasingly, supply bottlenecks or even delivery failures are affecting daily business. In order to keep losses as low as possible during this uncertain period and the associated exceptional circumstances, cooperations between companies and, in some cases, competitors are playing an increasingly important role. For example, cooperation may be appropriate to ensure the supply and fair distribution of essential scarce products and services to all consumers.

Joint Statement of the Network of European Competition Authorities (ECN)

In response to this need, the European Commission, the EFTA Surveillance Authority and the national competition authorities, which together form the Network of European Competition Authorities, have issued a joint statement on the application of antitrust rules during the current coronavirus crisis. This statement explains that, for example, no action will be taken against necessary and temporary measures if they were introduced to avoid supply shortages. In any case, the ECN assumes that such practices do not constitute a restriction of competition within the meaning of Article 101 TFEU or offer sufficient efficiency advantages that would ultimately justify a restriction.
In addition to the monitoring of cooperations, the ECN also recognises the need not to neglect the abuse control of dominant companies. Especially with regard to products which are considered essential for the protection of consumer health in the current situation (e.g. face masks and disinfectant gel) there is an increased risk of price abuse. The ECN therefore points out that it will continue to take action against companies that exploit the current situation by forming cartels or abusing their dominant position.

If companies have doubts about the compatibility of their business activities with EU competition law, they can always contact the Commission, the EFTA Surveillance Authority or the relevant national competition authority (in Germany the Bundeskartellamt) for informal advice.

Assistance from the Commission

In this context, the European Commission has set up a separate e-mailbox (COMP-COVID-ANTITRUST@ec.europa.eu) to respond to specific requests as quickly as possible. Inquiries about cooperation should contain as detailed information as possible about the companies concerned, products/services, the scope of the cooperation, as well as the benefits to be achieved through the cooperation.

In addition, the European Commission's Guidelines for the assessment of the compatibility of business agreements with EU competition law can be used as usual (cf. in particular Guidelines on Art.101(3) TFEU, horizontal and vertical block exemption regulation).

Statement of the International Competition Network

The governing body of the most important association of competition authorities in the world, the International Competition Network (ICN), also made a similar statement on 9 April 2020 on the enforcement of competition law during the Corona crisis. The ICN continues to seek to exchange ideas, experience and best practices with national competition authorities in order to ensure effective competition for the benefit of consumers and the economy. In the ICN's view, the promotion and protection of competition is crucial in order to best manage the effects of the crisis and to provide an appropriate basis for economic recovery. In this sense, the ICN warns against anti-competitive cartel agreements and the abuse of dominant market positions.

Merger Control

Merger control proceedings are still conducted by the competent competition authorities. The relevant deadlines and formalities therefore remain unchanged. Nevertheless, both the European Commission and the German Federal Cartel Office recommend refraining from unnecessary notifications at present. It should therefore be examined in each individual case whether a transaction needs to be carried out in the current situation.

However, the German government is currently planning to amend the law to mitigate the consequences of the COVID-19 pandemic in competition law and for the self-governing organisations of the commercial sector. The present draft law of 23 April 2020 intends, among other things, to extend the review periods applicable to merger control proceedings once only to 2 months for phase 1 decisions and to 6 months for phase 2 decisions. The extension will only apply to notifications of concentrations in the period from 1 March 2020 to 31 May 2020. The reason for the extension of the review periods is that due to the current circumstances the Bundeskartellamt is not in a position, or not within the usual time frame, to carry out appropriate investigations and to review the notified concentrations for their legality under competition law.

Fair trading law and consumer protection

The competition authorities are not competent to deal with issues relating to unfair commercial practices and consumer protection. Such inquiries can be sent directly to the appropriate authority:

  • For online purchases: Online Dispute Resolution Platform
  • For cross-border situations: European Consumer Centres Network
  • Other national dispute resolution bodies (in Germany, for example, the consumer protection centre)