Coronavirus and Competition Law
There are now several excellent posts and articles about the legal aspects of the novel coronavirus epidemic (or, to be precise, the epidemic of the COVID-19 disease stemming from the SARS-CoV-2 virus), including employment law, insurance law, civil law and data protection law perspectives. I felt compelled to ask: is my own area of expertise, competition law, relevant at all to this subject?

The answer is (obviously…) in the affirmative and not only due to the recent decisions of the world’s most famous cartel…in fact, there are (at least!) three points immediately worth mentioning.

First, the epidemic could have a relevance from the perspective of the abuse of dominance. The epidemic already produced visible shortages of certain products, which – in the competition lawyer’s mind – immediately pops up the notions of refusal to supply and unfairly high prices: both of which are prohibited practices for a dominant undertaking. Is it possible that a certain product is not available in stores due to the fact that the only producer of that product is not willing to put some of its stock onto the market? Is it possible that there is no real justification for another product’s tenfold price hike in the local village store (which product could only be purchased otherwise at the hypermarket at the faraway regional capital)? And finally: is it possible that the license agreement for a drug does not allow for its novel use, which could be vital to combat the epidemic or its side-effects? In this respect, it is important to bear in mind that –- although all of these scenarios raise important questions - an infringement from a competition law perspective could only be established if two conditions are met under European competition law (and under most national laws):


  1. a dominant position can be established on the relevant market (e.g. if the given supplier is indeed such a “competition law elephant” that is capable of acting appreciably independently from the other market players, suppliers and consumers), and


  1. there is no objective justification for the given conduct (e.g. if the local village store was not compelled to raise its price due to the recent price increase by the supplier).


Second, any joint action taken by market players as a result of the epidemic would also be very closely scrutinised by competition authorities. Clearly, any agreement between competitors –– aimed at avoiding price reductions to ensure the "well-being" of market players at the time of crisis would surely be regarded as illegal under the prohibition of anti-competitive agreements. The same would apply to an arrangement ensuring a joint and coordinated reduction of capacities or the keeping of the status quo in terms of geographic areas. These so-called “crisis cartels” - regardless of the seemingly good or even naïve intentions of the participants - have generally not been well accepted by antitrust authorities as they would destroy the very essence of competition for consumers, which is even more essential in such turbulent times. Importantly, even a unilateral call for such anti-competitive measures by a large market player could be an issue, if it could be established that there was then a "meeting of minds" between this market player and others.


Finally, various competition authorities (such as the German, the Dutch or the Hungarian authority) have a competence to enforce consumer protection laws such as those against the misleading of consumers. Now any communication by a company about its products or services that are in high demand during the epidemic needs to be crafted extremely carefully: for example, a promise of an effect to cure illnesses (despite the fact that the product in question not a registered medicine) or a statement on the protective effect of an equipment (which, in fact, does not produce such effects) could both be regarded as unfair commercial practices. It does not matter from this perspective, whether the statement was made by a small pharmacy, a regional webshop or a large retail chain.


In light of all this, competition authorities around the world will be in a rather difficult situation when they would have to assess and evaluate epidemic-related conduct based on the various complaints or public comments they receive.

  • Especially in cases concerning abuse of dominance there are sometimes extremely complex competition-economics issues to decide on, for example, the establishment of the relevant market for a given product. Although in this respect, some say that the question whether one product is interchangeable with another could be easily answered by simply observing the consumers stockpiling in supermarkets: if shelves for canned product X are emptied, would shoppers turn to canned product Y immediately or would they go to another store to look for product X?
  • At the same time, the public will likely expect swift decisions to be taken, quicker than the “usual” pace of events. A possible solution could be the use of interim injunctions: although these are indeed exceptional measures, there is some fresh experience in this respect, for example, at the European Commission itself (although certainly not yet related to the epidemic).
  • Finally, we have already seen express calls by market players to temporarily “suspend” the application of competition laws in certain areas (e.g. to enable the coordination of shopping deliveries): this is indeed a highly sensitive question and it remains to be seen if such calls are indeed warranted and if EU or national legislators decide to take any action based on them.



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