At the EU level, Commission staff have adapted to working from home but are aware of the challenges in dealing with tight timeframes presented by merger notifications (including securing meaningful input from industry participants which may be affected by a transaction). The Commission has therefore issued an appeal to request parties to delay merger filings as much as possible. Other authorities have indicated that review timeframes may be extended.
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Changes to State Aid Rules
In these extraordinary times, economies around the World including Member States are pumping money into their economies. Businesses and whole sectors are crying out for special support. State support in the EEA above a low de minimis threshold is subject to strict state aid rules which requires pre-clearance by the European Commission under strict conditions.
Collaboration Between Competitors in Times of Crisis
It is important to remember that as businesses struggle in these times to cope with issues like distribution, sourcing ingredients, components and other resources, they may look to collaborate with rivals. In fact, many businesses have been doing exactly that. Collaboration between competitors can be perfectly benign and may no anti-competitive effects (for example, in setting standards, lobbying efforts). However, competition rules do apply and coordination of prices, market sharing, cost allocation, coordinated output reductions or sharing competitive sensitive information, would be prohibited. Some restrictions are regarded as ‘hard core’ and rarely worthy of exemption (price fixing, customer and market allocations and quantity restrictions). Penalties for infringement could lead to significant fines and possible private damages litigation.
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Measures to Protect Against Predatory Conduct
Perhaps the first authority to warn about the perceived risks, the UK’s CMA issued a warning on 6rh March 2020 to traders about taking advantage of the COVID-19 pandemic. CMA chief executive Andrea Coscelli said: “We urge retailers to behave responsibly throughout the coronavirus outbreak and not to make misleading claims or charge vastly inflated prices. We also remind members of the public that these obligations may apply to them too if they resell goods, for example on online marketplaces.” This warning was triggered by the rising cost of hand sanitisers. The CMA went on to warn that it would take enforcement action against those suspected of such conduct and, if necessary, would also consider requesting the Government to introduce price controls. It has created a taskforce to monitor market behaviour during the crisis. Details about the Taskforce, its mandate and how to lodge complaints can be found here.
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Brexit – A Long Goodbye
On January 31, the UK exited the EU, after more than three years of constitutional turmoil. The UK now embarks on a year of transition and negotiations as it heads out into a world of new trade relations, with opportunities and challenges in equal measure. This is a watershed moment for all companies who trade in or out of the UK or the EU. Whether trading in goods or services, companies face strategic re-assessments not just of where they trade, but how they organize their trading activities: upstream for inputs and downstream to their customers and markets. How will they be affected – from a regulatory, trade, customs, commercial, investment and disputes perspective?
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UK Competition Law Enforcement Post-Brexit: Choppy Waters Ahead
CMA Brexit Draft Guidance
On 28 January 2019 the UK Competition and Markets Authority (‘CMA’) issued draft guidance on the effects of any no-deal Brexit on the CMA’s functions and its enforcement approach. This guidance has been made more urgent by the continuing UK political divisions that have plagued the Brexit process and which could see the UK crash out of the EU without any deal in place on 29 March 2019.
House of Lords Report on Brexit and Competition: What Does it Mean for Businesses?
Following an inquiry in July 2017, the House of Lords’ European Union Committee published on February 2, 2018, a report titled – ‘Brexit: competition and State aid’ – on the future of the UK’s competition law regime after Brexit.
The House of Lords report provides a detailed account of the most pressing issues that the UK’s competition law regime is facing ahead of Brexit. It also shows the high levels of uncertainty that businesses operating between the EU and the UK face.
This uncertainty suggests that businesses should – at least for now – adopt a cautious approach, for example, when formulating their distribution and acquisition strategies in the UK.
Whatever the statutory changes to the UK’s competition law regime after Brexit are, EU law will still remain an important factor to consider when taking business decisions, especially because of the geographical proximity and close trading relationships between the UK and the EU. This means that going forward businesses need to have guidance.
Steptoe has years of experience in successfully advising businesses on their strategic decisions in the EU and the UK. Our experienced lawyers can help your business to successfully navigate the demands and potential opportunities of Brexit.
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Join our Webinar on Criminal Enforcement Against Employee No-Poaching Agreements
Please join Steptoe’s Antitrust Team on Wednesday, November 1, for an in depth discussion of criminal antitrust enforcement against employee no-poaching agreements. As detailed in our earlier blog post, on September 12, two high-level officials of the US Department of Justice (DOJ), Antitrust Division confirmed the Trump Administration’s continued enforcement efforts against agreements
Steptoe’s Antitrust News & Briefs
Find more interesting content in our Antitrust News & Briefs on the Steptoe website, where we provide you with more in-depth analyses on current antitrust & competition developments in the EU, UK, and the US. See below for some of our most recent publications.
Intel: ‘A Whole New World’
The European Court of Justice just
Finally Solved: Non Full-Function Joint Ventures Are not Subject to EU Merger Control
Do you need to notify a change from sole to joint control over an existing undertaking when the newly created joint venture is not full-function?
This question has been the subject of much debate with the European Commission’s case teams and has poisoned the life of companies and merger control practitioners for over a decade.