DG Comp offers “informal” coronavirus guidance

Ciaran Willis

31 March 2020

Credit: Shutterstock/symbiot

The European Commission is “ready to guide” companies and lawyers on acceptable cooperation agreements during the coronavirus pandemic.  

The Directorate-General for Competition yesterday established a new webpage entitled “antitrust rules and coronavirus”, which outlines policies and antitrust measures in the wake of the coronavirus outbreak. 

The aim is to help businesses design temporary cooperation arrangements in a pro-competitive way to help Europe overcome the coronavirus crisis in a united manner, the commission said. 

DG Comp also created an email address where companies and lawyers can ask for “informal guidance” on specific cases. The commission received questions regarding the coronavirus crisis from stakeholders before it set up the mailbox. 

The authority is “ready to guide companies, associations and their legal advisors” if there is “uncertainty” about whether certain conduct is compatible with competition law, DG Comp said on its webpage.

This applies for cooperation that needs to be “swiftly” implemented to tackle the coronavirus pandemic, it said.  

The “exceptional circumstances” mean companies may need to cooperate with each other to overcome the crisis, the commission said, for instance to ensure that there is an available supply and fair distribution of essential scarce products and services for consumers.

It added that it is “more important than ever that businesses and consumers receive protection under competition law”. The authority will continue to monitor relevant market developments to detect companies that take advantage of the pandemic to breach EU antitrust law, it said.

Last week, the European Competition Network – which includes the European Commission and national competition authorities in EU member states – said that it would not intervene in necessary and temporary cooperation between companies to deal with the coronavirus pandemic.

Richard Pepper, a counsel at Cleary Gottlieb Steen & Hamilton, said that so far the European guidance has been rather “light-touch”, as it largely replicates the pre-existing framework for assessing cooperation.

“A lot of practitioners are now anticipating a broader discussion on whether those principles are fit for purpose… or whether the commission will explicitly broaden its tolerance levels in the short term”, he said.

He added he hopes the commission’s antitrust staff will be able to process requests as quickly as their state aid colleagues have dealt with the “flurry of applications”.

State aid

The European Commission also plans to extend its temporary state aid framework to include more measures to support the creation of testing facilities for vaccines and products that protect against the coronavirus.

The authority announced in a press release last Friday that it had sent a draft proposal to member states and aims to have the measure in place this week.

Member states adopted the temporary framework on 19 March to help support EU economies, by giving aid directly to businesses, giving guarantees on bank loans and safeguarding bank loans. The commission has so far made at least 14 state aid decisions based on this temporary framework and approved 22 national measures, the authority said. 

The new measures include more support for coronavirus-related research and development; more support for building and upgrading testing facilities used to make vaccines, medical equipment and protective materials; and more general support to create vaccines, medical-related products and hand sanitiser. 

Under the extended rules, member states would also be able to grant ‘no-loss guarantees’ to companies’ investing in these medical facilities. 

The commission has also asked for support for employees – which would defer tax payments, or provide wage subsidies – to stop redundancies in areas and sectors the disease has affected the most. 

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