Last week we shared with you information on the main antitrust risks arising out of the COVID-19 crisis and practical tips on how to achieve compliance (please see here: COVID-19 and Antitrust Law: Avoiding Legal Risks in a Time of Uncertainty.)

Since then we have all been bombarded with developments in this space from around the world. This Global Update consolidates and analyzes the most important antitrust legal developments, enforcement practices and operational capabilities of antitrust authorities and courts around the world in one easy, digestible format.

With the COVID-19 pandemic and the economic impact of shutdowns evolving on a daily basis, we hope this and future updates will help you keep abreast of these changes, so your business is able to quickly adapt to the changing regulatory climate.

Key Takeaways

  • Some antitrust agencies have already demonstrated an unprecedented degree of flexibility during the COVID-19 outbreak, granting temporary exemptions from antitrust laws to allow certain industry sectors to operate more effectively and better serve consumers.
  • Such exemptions have so far been sector or scheme-specific and apply only in very limited circumstances- and have often been accompanied by severe warnings against unscrupulous business practices.

  • Companies should seek to engage with competition authorities if they feel the need to operate in a way that could be perceived as anti-competitive. Many authorities are encouraging such approaches, including the US agencies, offering an antitrust review procedure for collaborations on an expedited basis of only seven calendar days- a reflection of the urgency with which antitrust regulators are responding to the crisis.

  • Whilst live investigations and inquiries from antitrust authorities related to the COVID-19 outbreak are currently focused on the healthcare sector and alleged excessive pricing practices, we fully expect enforcement action to increase over the coming weeks and months, both in relation to pricing practices and suspected "crisis cartel" activity.

  • Merger control faces significant operational challenges globally and there are no signs this will ease in the short term. Where SPAs have not been signed, parties should carefully consider the appropriate longstop date. For signed deals, waivers from or amendments to longstop dates may be necessary and should be considered without delay.

  • Several EU Member States have already received approvals from the European Commission for assistance granted to companies dealing with the economic effects of the pandemic, under a Temporary Framework for State aid. However, not all forms of support are covered by the Temporary Framework. Therefore due care should be taken in structuring these interventions and early engagement with the Commission is warranted to avoid drawing complaints of competitors.

 

Antitrust Enforcement

 

Several national authorities and governments have demonstrated an unprecedented degree of flexibility during the COVID-19 outbreak, granting temporary exemptions from antitrust laws to allow certain industry sectors (such as transportation, supermarkets and healthcare) to operate more effectively and better serve consumers. However, such exemptions have so far been sector or scheme-specific and apply only in very limited circumstances. Rather than assuming a "carte blanche" for anti-competitive conduct, companies in sectors benefitting from a temporary relaxation of antitrust laws should openly engage with authorities before taking any concrete steps to depart from established compliance standards. Likewise, companies should seek to engage with competition authorities if they feel the need to operate in a way that could be perceived as anti-competitive.

Whilst live investigations and inquiries from antitrust authorities related to the COVID-19 outbreak are currently focused on the healthcare sector and alleged excessive pricing practices, we fully expect enforcement action to increase over the coming weeks and months, both in relation to pricing practices and suspected "crisis cartel" activity. The plethora of warnings issued worldwide shows that antitrust agencies are actively monitoring how companies choose to adapt to the crisis and stand ready to intervene where the conduct goes beyond the scope of a temporary exemption or is merely a cover for serious infringements of competition (such as price-fixing arrangements or unnecessary exchanges of competitively sensitive information).

 

Impact on Antitrust Agency Operations and Court Procedures

Merger control faces significant operational challenges globally due to the ongoing COVID outbreak and there are no signs this will ease in the short term. Most competition authorities worldwide have endeavored to continue assessing cases and accept new notifications, but many have also warned merging parties to expect disruptions to timelines and/or new filings being accepted, as authorities experience staffing shortages and practical difficulties caused by remote working and business shutdowns. Where SPAs have not been signed, parties should carefully consider the appropriate longstop date. For signed deals, waivers from or amendments to longstop dates may be necessary and should be considered without delay.

Public health concerns around in-person meetings will also affect the timeline of ongoing antitrust investigations and litigation, which are often reliant on in-person hearings. Court hearings in a number of countries have also been suspended.

 

EU State Aid

The European Commission is delivering on its promise to quickly approve State aid support targeted at assisting companies to deal with the economic fall out of the COVID-19 outbreak. EU Member States notified several support schemes providing State guarantees or public loans at subsidized interests rates under the Temporary Framework adopted on 19 March 2020, which were approved within days by the Commission. In addition, EU Member States have adopted a myriad of measures applicable to all companies (e.g. deferment of tax and social contribution payments).

However, it is unlikely that these measures will be sufficient to support the most affected businesses (e.g., airlines) and it is expected that equity support and some bailouts will be needed. These kinds of measures will need individual notification to and approval by the European Commission if not conducted at market terms and are not covered by the Temporary Framework. Therefore, due care should be taken in structuring these interventions and early engagement with the Commission is warranted to avoid drawing complaints of competitors.

 

More information?

We appreciate that not every development will be relevant to every company. Please refer to the annexes below for more details on individual developments:

 

 

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