European competition authorities and oversight during the Coronavirus crisis
The joint European competition authorities have released a statement on how they will deal with far-reaching collaborations that companies wish to launch in order to combat the Coronavirus (COVID-19) crisis. The Netherlands Authority for Consumers and Markets (ACM) endorses this statement. On March 18, we published a similar statement, and we have since helped draft a European statement in order to make sure that the same approach is taken in each member state.
The statement of the European Competition Network
The European association of competition authorities (European Competition Network, ECN) is fully aware of the social and economic consequences triggered by the novel coronavirus (COVID-19) outbreak in the EU/EEA.
The different EU/EEA competition instruments have mechanisms to take into account, where appropriate and necessary, market and economic developments. Competition rules ensure a level playing field between companies. This objective remains relevant also in a period when companies and the economy as a whole suffer from crisis conditions.
The European competition authorities understand that this extraordinary situation may trigger the need for companies to cooperate in order to ensure the supply and fair distribution of scarce products to all consumers. In the current circumstances, the European competition authorities will not actively intervene against necessary and temporary measures put in place in order to avoid a shortage of supply.
Considering the current circumstances, such measures are unlikely to be problematic, since they would either not amount to a restriction of competition under Article 101 TFEU or 53 EEA (or Section 6 of the Dutch Competition Act) or generate efficiencies that would most likely outweigh any such restriction. If companies have doubts about the compatibility of such cooperation initiatives with EU/EEA competition law, they can reach out to the Commission, the EFTA Surveillance Authority or the national competition authority concerned (in the Netherlands: ACM) any time for informal guidance.
At the same time, it is of utmost importance to ensure that products considered essential to protect the health of consumers in the current situation (e.g. face masks and sanitizing gel) remain available at competitive prices. The European competition authorities will therefore not hesitate to take action against companies taking advantage of the current situation by cartelizing or abusing their dominant position.
In this context, the European competition authorities would like to point out that the existing rules allow manufacturers to set maximum prices for their products. The latter could prove useful to limit unjustified price increase at the distribution level.