COVID-19: ECN joint statement on applying competition rules during the crisis | Practical Law

COVID-19: ECN joint statement on applying competition rules during the crisis | Practical Law

On 23 March 2020, the European Commission announced that all competition authorities in the European Competition Network (ECN) (the Commission, the European Surveillance Authority, and the national competition authorities of the EU/EEA) are issuing a joint statement on how to apply the European competition rules during the crisis resulting from the 2019 novel coronavirus disease outbreak (COVID-19).

COVID-19: ECN joint statement on applying competition rules during the crisis

Practical Law UK Legal Update w-024-5961 (Approx. 3 pages)

COVID-19: ECN joint statement on applying competition rules during the crisis

by Practical Law Competition
Published on 23 Mar 2020 • European Union
On 23 March 2020, the European Commission announced that all competition authorities in the European Competition Network (ECN) (the Commission, the European Surveillance Authority, and the national competition authorities of the EU/EEA) are issuing a joint statement on how to apply the European competition rules during the crisis resulting from the 2019 novel coronavirus disease outbreak (COVID-19).
On 23 March 2020, the European Commission announced that all competition authorities in the European Competition Network (ECN) (the Commission, the European Surveillance Authority, and the national competition authorities of the EU/EEA) are issuing a joint statement on how to apply the European competition rules during the crisis resulting from the 2019 novel coronavirus disease outbreak (COVID-19) (Commission Midday News MEX/20/512).
The joint statement underlines that the competition rules are flexible enough to take into account changes in market circumstances such as these. It states that:
  • The ECN it is fully aware of the social and economic consequences triggered by the 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 ECN understands that this extraordinary situation may trigger the need for companies to cooperate to ensure the supply and fair distribution of scarce products to all consumers. In the current circumstances, the ECN will not actively intervene against necessary and temporary measures put in place 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 of the TFEU/ Article 53 of the EEA Agreement 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 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 (such as face masks and sanitising gel) remain available at competitive prices. The ECN will therefore not hesitate to take action against companies taking advantage of the current situation by cartelising or abusing their dominant position.
  • In this context, the ECN points out that the existing rules allow manufacturers to set maximum prices for their products. This could prove useful to limit unjustified price increase at the distribution level.