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?

The Government has established a temporary derogatory regime for commercial practices with price reductions, through Decree-Law no. 20-E/2020, of 12 May, acknowledging that, by virtue of the emergency measures imposed by the Government for the containment of the virus, several business establishments which remained closed or whose activity was suspend, were prevented from clearing their products thus accumulating stockpiles, and are therefore in need of  relaunching their business activity.

In this context, the Government has determined that discount sales taking place in May and June 2020 shall not be considered for the purpose of the maximum limit of 124 days of discount sales per year, provided for in Article 10(1) of the Decree-Law no. 70/2007, of 26 March Decreto-Lei n.º 70/2007. These discount sales shall also be exempt from prior notice to ASAE (Authority for Economic and Food Safety).

 

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 postpone the notification for merger when possible, giving preference to delivery by electronic means;
  • The Autoridade da Concerrência (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

In line with the Joint Statement, some national authorities have noted that they will be particularly alert to practices exploiting the situation of crisis and the consumers.

 

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

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. The latest review, dated 24 April, reported 300 complaints that gave rise to investigations in the financial services, funeral services and personal protective equipment production sectors.

In the United Kingdom, an investigation has been launched regarding Expedia and Booking.com possible abuse of a dominant position in relation to the conditions for changing bookings due to the COVID-19 pandemic applied to hotel and accommodation businesses. The UK Competition Authority has also reported more than 180 contacts with companies due to complaints of excessive prices for personal hygiene and food products during the outbreak.

In the USA were announced investigations related to price increases or other restrictive or unfair practices with regard to products related to COVID-19 outbreak.

 

 

 

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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.