Antitrust & COVID-19

March 20, 2020

The COVID-19 pandemic presents unprecedented issues for businesses and we recognize that antitrust is unlikely to be your most important concern at this time.

However, some forethought may mitigate risk of future exposure, and position your business as well as possible in this dynamic environment.

This memo supplements the materials available on our Resource Center, and provides an initial overview of antitrust-related issues that businesses may confront in the coming days, weeks, and months.  Some are specific to this crisis; others may be more analogous to previous times of economic difficulty.

  • Antitrust.  Dealing with the outbreak could raise various antitrust issues in the near term: short-term shortages of certain products could lead to allegations of price gouging or excessive pricing, or the discriminatory allocation of scarce supplies; rivals may want to cooperate on medical developments or to ensure the ongoing supply of important goods; and companies may attempt to limit supplies between countries, or need to comply with state action requiring them to do so.  Longer term, there may be calls to loosen antitrust rules to allow for behavior that would ordinarily fall foul of competition policy, and various agencies have already issued narrow exemptions dealing with industry-specific issues.
  • Merger control.  It may be more challenging to push through merger review processes as quickly as normal, while some statutory timetables are suspended and in other cases agency staff work from home with imperfect access to IT infrastructure.  Looking further ahead, the economic consequences of the pandemic may result in industrial combinations that raise challenging antitrust issues.
  • State aid.  Most public expenses related to the crisis are likely to be funded by national budgets, so may be subject to the State aid rules of the European Union.  As was the case in the financial crisis, the European Commission has already indicated a willingness to relax these rules, and has moved fast to adopt rules to support the economy.
  • Compliance.  Finally, the economic consequences of the pandemic combined with extensive work-from-home policies may put strain on existing compliance policies, significantly increasing the risk of antitrust violations.

Please click here to read the full alert memorandum.