Agenda

COVID-19 RELATED ANTITRUST PRACTICES

03/04/2020

 

Antitrust authorities and related public agencies all over the world have taken multiple measures addressing extraordinary market conditions emerged during Covid-19 crisis, as follows:

TURKEY

  • Turkish Competition Authority (TCA) initiated an examination over food price increases in the COVID-19 period based on the observations that food prices and fresh fruit and vegetable prices in particular are rising excessively. The Authority announced that the highest possible available in the legislation will be applied to individuals and institutions engaged in anti-competitive actions in this period. (23.03.2020)
  • TCA President Birol Küle, made a press statement that the people and institutions that caused the increase of prices and supply shortages, especially in the food market, during this harsh period will be punished severely under the law No. 4054.  (25.03.2020)
  • The Ministry of Commerce in Turkey initiated audits on food products and healthcare equipments. The Ministry announced that 13 companies were taken under control regarding the price increase in face masks and that nine of these companies were fined.
  • The oral hearings to be held on in April 2020 are postponed. (26.03.2020)

 

EUROPEAN COMMISSION

  • European Commission, the EFTA Surveillance Authority and the National Competition Authorities issued a joint statement on the application of the antitrust rules during COVID-19 crisis. Accordingly;

 

  • The Authorities will not actively intervene against necessary and temporary measures where companies need to cooperate in order to ensure the supply and fair distribution of scarce products  to all consumers and and such cooperations will not amount to a restriction of competition under Article 101 TFEU/53 EEA or generate efficiencies that would most likely outweigh any such restriction,
  • The Authorities will severely intervene if companies take advantage of the current situation by cartelising or abusing their dominant position especially for products considered essential to protect the health of consumers in the current situation (e.g. face masks and sanitising gel)
  • Manufacturers should be aware that the existing antitrust rules allow manufacturers to set maximum prices for their products, to limit unjustified price increase at the distribution level.  

 

  • European Commission has sent to Member States for consultation, a draft proposal to extend the State Aid Temporary Framework adopted on 19 March 2020 to support the economy in the context of the coronavirus pandemic. The draft includes more support for coronavirus related research and developments, the construction and upgrading of testing facilities, the production of products relevant to tackle to coronavirus pandemic and targeted support in the form of deferral of tax payments and/or suspensions of employers' social security contributions.
  • The Commission released the following state aid decisions:

 

  • The Commission decided to remove temporarily all countries from the list of “marketable risk" countries under the short-term export-credit insurance Communication. This will make public short-term export credit insurance more widely available in light of the current crisis linked to the coronavirus pandemic.
  • The Commission approved the aid package that allows Luxembourg to provide loans under favorable terms to help businesses meet their urgent capital and investment needs.
  • The Commission approved the Estonia’s € 1.75 billion support package to provide public guarantees for existing or new loans or to provide loans under favorable terms to help businesses meet their urgent capital or investment needs.
  • The Commission approved the France's €1.2 billion scheme to support small and micro-enterprises as well as self-employed people affected by the economic repercussions of the Covid-19 pandemic. The beneficiaries are companies with a maximum of 10 employees and a yearly turnover not exceeding 1 million Euro. In addition, Comission approved the French package, which postponed the payment by airlines with certain taxes to reduce the economic impact of the coronavirus outbreak.
  • The Commission approved the approximately 130 million Euro Danish liquidity guarantee scheme for small and medium-sized Undertakings (SMUs) affected by the coronavirus outbreak to support SMUs. The package includes measures to ensure that minimum wages and protections are effectively directed to needy beneficiaries by banks or other financial institutions.
  • The Commission approved 200 million Euro Irish scheme to support the economy in the current coronavirus pandemic. The support will be accessible to companies that experience or expect to experience a decline in turnover of at least 15% compared to their revenue before the coronavirus outbreak in Ireland. The scheme applies to undertakings in Ireland employing 10 or more full time employees in certain manufacturing sectors and/or internationally traded sectors.

 

UK

  • The UK competition authority Competition & Markets Authority (CMA) has taken under scrutiny, the market failures that may occur in the COVID-19 period. CMA will intervene in cases of violation of competition and consumer protection rules, such as excessive pricing practices and misinformation about health equipment protection. In addition, CMA has announced that the Authority is considering to propose price regulation for healthcare products. (05.03.2020)
  • CMA relaxed competition law enforcement against the cooperation agreements between the suppliers of essential goods and services in order to ensure supply security of these products. Accordingly, CMA announced not to take any action against cooperation practices for supplying and rationing essential products between businesses such as supermarkets. These practices in particular may include pooling resources and data, sharing distribution depots and delivery vans and sharing and discussing information about stock levels. CMA highlighted that it would not tolerate exploitation of the crisis for non-essential collusions and exchanging information on longer-term pricing or business strategies and abusing this relaxation policy. The Authority also stated that this assurance cannot protect businesses against private enforcement of competition rules. (19.03.2020)

 

US – DOJ/FTC

  • The US Department of Justice (DOJ); announced that sanctions will be imposed in case of violation of competition rules regarding products that concern public health. In this context, the individuals and companies that engaged in price fixing, customer sharing and bid rigging in public health equipment such as gloves, face masks are under scrutiny.
  • DOJ has announced that it will make a series of temporary changes regarding mergers / acquisitions, in order to carry out its mission by protecting the health and safety of department employees and the American people. Accordingly;

 

  • For mergers currently pending or that may be proposed, the Antitrust Division is requested from merging parties an additional 30 days to timing agreements to complete its review of transactions after the parties have complied with document requests.  If circumstances require, the Division may revisit its timing agreements with merging parties in light of further developments.
  • The Antitrust Division will allow electronic filing of submissions.
  • The Antitrust Division will conduct all meetings by phone or video conference. (If its possible)
  • All scheduled depositions temporarily will be postponed and will be rescheduled using secure videoconferencing capabilities.

 

  • The Federal Trade Commission (FTC) and the U.S. Department of Justice Antitrust Division (DOJ) issued joint statement detailing an expedited antitrust procedure and providing guidance for collaborations of businesses working to protect the health and safety of Americans during the COVID-19 pandemic. Statement also includes guiding businesses to address concerns about the legality of their behavior. In this procedure, it is stated that businesses may need to work together in providing resources and services to assist patients, consumers and communities affected by pandemic disease, and various cooperation activities that can be allowed to be consistent with antitrust laws are listed. At the same time, the authorities announced that institutions and individuals trying to use the pandemic by doing antitrust violations would be punished. (24.03.2020)
  • FTC announced that it has extended 60 days upon the incoming requests to accept views on Endorsement Guides and the Funeral Rule due to Covid-19 pandemic. (27.03.2020 – 30.03.2020)
  • On March 13, as part of the Bureau of Competition and in partnership with the US Department of Justice Antitrust Division, the FTC announced that the Bureau's Premerger Notification Office will accept a temporary e-filing program for notifications. This transition includes temporarily suspending the Bureau’s processing of requests to grant early termination of the Act’s waiting periods. (27.03.2020)
  • The FTC has sent letters to nine voice over Internet Protocol service providers and other companies that it is against the law to facilitating or assisting illegal telemarketing or Robocalls related to the Covid-19 pandemic. (27.03.2020)
  • Regarding the FTC investigation against three California-based student loan debt deferral companies, the US District Court postponed the deadline for make a decision for 60 days due to Covid-19 pandemic. (30.03.2020)
  • FTC announced that consumer complaints have jumped during the Covid-19 pandemic in recent weeks. FTC stated that the top categories of coronavirus-related fraud complaints include travel and vacation related reports about cancellations and refunds, reports about problems with online shopping, mobile texting scams, and government and business imposter scams. (31.03.2020)

 

RUSSIA

  • One of the first interventions related to the Covid-19 outbreak came from the Russian competition authority FAS. FAS started an investigation on the joint prices increases of medical face masks supplied to local pharmacies by the producers (St. Petersburg Medicine Ltd, NPKF Ltd, Eklif Ltd, Profitmed SPb Ltd, Novamed SPb Ltd). FAS will examine manufacturer-distributor-retail chain and wholesale prices the medical face mask.
  • FAS has announced that they will tighten price control over socially important food products. Within this framework, it was announced that the FAS Regional Offices will monitor prices for the above products such as bread and bakery goods, cereals, meat, eggs, butter and some fruits and vegetables on a daily basis, including weekends, by day-to-day. (24.03.2020)
  • An investigation was initiated by FAS on the undertakings operating in the Udmurtia region in the medical face mask market, suspected of fixing their mask prices to 22 Rubles, the maximum price in the region. (20.03.2020)
  • FAS has announced that the COVID-19 pandemic is a force majeure event, which must be taken into account analyzing complaints with regard to public procurement and procurement by  state-run competition, investigating cases on administrative violations, considering petitions for including in the Register of Unfair Suppliers, and carrying out investigations.

FRANCE

  • Following the adoption of the law of 23 March 2020 on the state of health emergency and the ordinance of 25 March 2020, French competition authority Autorité de la Concurrence announced that the they had made arrangements for deadlines and procedures regarding merger cases, establishment of regulated legal professions, filing of observations and briefs, leniency applications, transmission of procedural documents, prescription, appeals and execution of commitments and injunctions. (27.03.2020)
  • Autorité de la concurrence posted a message prepared by the European Commission and the European Competition Network to support all economic players and answer questions about how companies can deal with the Covid-19 crisis without violating the competition law, as consumers and businesses face significant challenges in the face of the Covid-19 outbreak. The message includes explanations that companies will not interfere in collaboration to ensure the supply and fair distribution of products to all consumers, and that companies can contact the authority to guide them when they have doubts about the compatibility of such cooperation initiatives with EU competition law.

(Autorité de la Concurrence – 23.03.2020)

 

GREECE

  • The Greece competition authority Hellenic Competition Commission (HCC), announced that they will be more careful about possible violations of competition in order to protect consumer interests and economic growth and prevent deterioration of the current competitive situation during the Covid-19 outbreak. (07.03.2020)
  • HCC published a short information note on vertical agreements in order to draw attention to the competition rules during the Covid-19 pandemic, which was going through an economically and socially difficult period. The HCC announced it would continue to intervene every market where competition rules are breached in these days when the country is affected by the Covid-19 pandemic. (16.03.2020)
  • HCC sent a letter regarding information requests, as part of the investigation of price increases in products such as medical face mask, disposable gloves, and anti-bacterial solution to a large number of companies operating in the production, import and marketing of these products. (21.03.2020)