GERMAN COMPETITION AUTHORITY ASSESSED THE COVID-19 MEASURES TAKEN FOR AUTOMOTIVE INDUSTRY
22/06/2020
German Competition Authority Bundeskartellamt, has announced that it supports the measures to be taken by the German Association of the Automotive Industry (VDA) aiming to minimize the economic damage caused by the Covid-19 pandemic in the automotive industry. Authority stated that a coordination between companies may be necessary to overcome such problems. The measures presented by the VDA contain framework conditions for restarting automotive production and a model for restructuring suppliers.
Bundeskartellamt, along with VDA, has taken the following measures to ensure compliance with competition law requirements:
- The relevant suppliers in the automotive industry remain free to choose when and in what way they would like to restart their activities and whether they would like to publicly announce this restart. In particular, they are not obliged to restart their production at a specified point in time.
- The VDA best practice guide will not contain any company-specific information relating, for example, to amounts of goods or contracts. Existing contractual obligations remain unaffected. Suppliers are not obliged to adhere to specific supply volume requirements.
- The proposed Corona restructuring process concerns companies, which in their own assessment are undergoing an economic crisis due to the Covid-19 pandemic and would like to resort to the restructuring process. This covers companies domiciled in Germany and companies outside Germany whose subsidiaries or establishments located in Germany are in crisis.
- The Corona restructuring process is limited in time. It is available to companies, which set the date for the first stakeholder meeting to take place before 31 December 2020, at the latest, and send out invitations to this meeting before the end of the year.
- The scope of the information exchanged between the parties to the Corona restructuring process is limited to data, which are indispensable for restructuring.
- Data exchange is subject to specific confidentiality rules and limited to a specified group of persons within the companies who are subject to confidentiality obligations and who, for a specific period of time, may not participate in purchasing negotiations with the relevant supplier.
- Data have to be exchanged in aggregate form. This applies in particular where information about the number of units or unit prices is shared. Companies will thus not receive any data specific to their competitors, but only overall figures of the relevant supplier.
- The Corona restructuring process will end upon conclusion of a framework agreement describing the stakeholders’ contributions in a general way. The individual services relating to each contractual partner are negotiated exclusively on a bilateral basis between the sub-supplier and the relevant stakeholder.
- Each stakeholder is free to choose not to participate in the restructuring negotiations or to reject the result of the negotiations. The parties to the framework agreement may not agree to disadvantage stakeholders that are not a party to the agreement.
(Bundeskartellamt - 09.06.2020)
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