Do national and EU rules on competition law remain in force, during the period of crisis caused by the COVID-19 outbreak?

As a general rule, competition law rules remain in force, but the enforcement of such rules shall be adjusted in order to accommodate the exceptional current situation.

The European Commission has adopted a Temporary Framework for the review of antitrust practices in cooperation between undertakings in response to emergency situations arising from the current outbreak of COVID-19 (Temporary Antitrust Framework). This Framework allows for forms of cooperation between undertakings aimed at ensuring the supply and distribution of essential products and services of scarce availability. Within this context, an exception is made to the rule of self-assessment of agreements by undertakings, creating a temporary process in which the Commission reviews such collaborative projects and sends comfort letters regarding their compliance with the competition rules.

The European Competition Network - ECN has issued a Joint Statement, signed by the Competition Authority (PCA), in which a similar approach is announced.

It should also be noted the approval at EU level of temporary derogations from the competition rules for the milk, flowers and potato sectors. Such derogations are in force for a 6-month period and allow operators to cooperate with each other and implement measures which would be prohibited in normal situations. In particular, to stabilise the market, collective planning of production (milk sector) and the withdrawal of products from the market (flowers and potato sectors) will be allowed, for example. The Commission shall be alert to consumer price fluctuations and any possible segmentation of the internal market in order to avoid negative impacts.

 

Are there any temporary measures applicable to prices or other sales conditions?

It is currently in force, in the terms of Decision no. 3803-A/2021 adopted under Law no. 1-A/2020, a limitation on profit margins, to a maximum of 15%, with regards topersonal protective equipment, alcohol, and COVID-19 tests, namely in the commercialization of medical devices and personal protective equipment, ethyl alcohol and alcohol-based skin disinfectant gel, and rapid tests for SARS-CoV-2 for the layman (self-tests), CE marked or subject to exceptional authorization by INFARMED.

With the term of the emergency state, the limitations on the fees and commissions that may be charged to restaurants or similar establishments by the intermediary platforms, as well as the maximum price regime for bottled liquefied petroleum gas (LPG), have ceased to be in force.

 

What were the instructions of the competition Authorities of the EU State Members on their activities during this crisis?

Further to joining the ECN Statement, some national competition authorities have already issued statements or information with connection to their activities and merger control, in particular:

  • The European Commission encourages the parties to discuss the timing for the submission of a notification for merger when possible, giving preference to the submission by electronic means;

  • The Autoridade da Concorrência (AdC) (Competition Authority) invites all interested parties to resort to the available electronic channels, such as Portal de Denúncias, Sistema de Notificação Eletrónica (SNEOC), among others available on AdC website, stating that the managerial staff is working remotely. AdC has published here the new proceedings for the electronic communication with AdC, which remain unaltered. 

 

Are there already ongoing investigations on restrictive practices in this context?

The  Portuguese Competition Authority issued guidelines, in May 2020, tothree business associations in the pharmaceutical and financial sectors, stressing the need to comply with competition rules in the context of the Covid-19 pandemic. These informal guidelines aim to encourage these companies to adopt practices that benefit both the consumers and the economy. As for credit institutions, the guidelines clarified that the possible implementation of a private moratorium regime should not prevent each institution from creating more beneficial conditions for consumers. Regarding the pharmaceutical sector, the Authority issued a guideline regarding the maximum margin to be applied in the sale of individual protection products against the pandemic (object of subsequent legislative intervention).

The Authority also imposed, in May 2020, an injunction on the Portuguese Football League to suspend a resolution preventing the hiring of football players who unilaterally terminate their employment contract, on account of the Covid-19 pandemic.

The Authority has also stated that it will continue to closely monitor the behaviour of the various economic agents in order to avoid the adoption of opportunistic behaviours for consumer exploitation, in the context of the Covid-19 crisis, as well as the occurrence of any other practices restricting the rules on competition.

Likewise, competition authorities in other jurisdictions have also been watchful of possible anti-competitive practices in the context of the COVID-19 pandemic scenario. In particular (among others):

  • The Italian competition Authority launched two investigations against Amazon and Ebay related to practices in the marketing of personal protection products, in particular with regard to the misleading references to the protection against or cure of COVID-19 and price increases. The Italian authority has also ordered the shutdown of some online platforms for the sale of medicines and other products, due to the misleading offer of products for the treatment and prevention of coronavirus.
  • The Spanish Authority (CNMC) has been publishing regularly a review of complaints and procedures concerning restrictive practices within the context of the COVID-19 outbreak.
  • In the United Kingdom, the Competition and Markets Authority (CMA) thasestablished a dedicated COVID-19 taskforce, which has been assessing, specifically, practices in relation to cancellation and refunds relating to air travel, events and accommodation, having launched an investigation on Expedia and Booking.com regarding a possible abuse of a dominant position in relation to the conditions for changing bookings due to the COVID-19 pandemic. CMA has also reported about 277 contacts with companies due to complaints of excessive prices for personal hygiene and food products during the outbreak, and  launched investigations on pharmacies and convenience stores, on suspicion of infringement of competition rules by charging excessive prices for sanitizing products during the pandemic.
  • The French Competition Authority (FCA) has launched an investigation into exclusive import practices by the Fisher and Paykel Healthcare Group, whose activity focuses on supplying hospitals with breathing systems and products for patients suffering from respiratory diseases, particularly Covid-19 patients. The FCA closed the investigation after clarification by the Groups concerned that their medical product distribution practices were aimed at preventing the disruption of medical product supplies to the French outermost territories.
  • In Greece, the national Authority launched an investigation into the medical equipment market, following numerous consumer complaints about price increases for medical products and defective products. The Authority sent several information requests to companies operating on the market in order to find out the origin of such deviations.

 

 

 

__________________________

This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.