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The Bundeskartellamt in times of COVID-19: adaption of workflows and implications for our enforcement practice

The Bundeskartellamt in times of COVID-19: adaption of workflows and implications for our... The consequences of the COVID-19 crisis affect us all. The necessary countermeasures adopted around the globe have a huge impact on people’s personal life, the economy, and public authorities alike. As in most European countries, the German government imposed a number of precautionary measures to reduce the spread of the coronavirus SARS-CoV-2. These measures include the closure of leisure facilities like hotels and restaurants as wells as retail shops (except for supermarkets, drugstores, and pharmacies). They restrict cross-border travels and encourage ‘social distancing’, for example, by forbidding gatherings of more than two people in public spaces. I. ADAPTION OF WORKFLOWS IN THE TIMES OF CRISIS Needless to say that these measures not only have a significant impact on the economy but also on our work. However, the Bundeskartellamt has maintained its availability from the beginning of the crisis and remains ready to cope with the daily workload. In order to comply with the precautionary measures, our staff can work from home office but may also come to their offices at the Bundeskartellamt’s premises in Bonn, where we have made sure to avoid any personal contacts. We have ensured the decision divisions’ availability by setting up additional, functional mailboxes, which every member of the corresponding department can access (the contact addresses are available on our website). Even though meetings in person at the Bundeskartellamt will not be possible until further notice, we are happy to arrange telephone conferences in order to discuss with external parties. II. IMPLICATIONS FOR OUR ENFORCEMENT PRACTICE Over the last weeks, the Bundeskartellamt has received a large number of requests for informal guidance for COVID-19-related co-ordination between competitors or within the supply chain. Once again, competition law tools have shown to be flexible enough to take into account these extraordinary circumstances: most of the co-ordinations that are necessary to cope with the current crisis do not constitute a competition law problem. It may well be that they do not amount to a restriction of competition in the first place; otherwise, many of them are likely to generate efficiencies that would outweigh any such restriction. We also acknowledge that companies are struggling to cope with the COVID-19 crisis and, therefore, require a high level of legal certainty—often on short notice—in order to facilitate their self-assessment. In cases of doubt, we encourage companies to contact the competent decision division for informal guidance at any time. We have already issued several comfort letters (‘Vorsitzendenschreiben’) declaring that we will not intervene against concrete co-ordination initiatives. In the current circumstances, the Bundeskartellamt will not actively intervene against co-ordinations put in place in order to cope with the COVID-19 crisis under the following conditions: (i) they do not go beyond what is necessary to generate efficiencies, (ii) the undertakings concerned keep the Bundeskartellamt informed about the further development of the co-ordination, and (iii) the co-ordination has to end without due delay after the end of the COVID-19 crisis. Considering the global scale of the COVID-19 crisis, the Bundeskartellamt is in close contact with other competition authorities across the world so that we can co-ordinate our actions. For example, the members of the European Competition Network (ECN), that is, the European Commission, the national competition authorities of the European Union 27 States and the European Free Trade Assosciation States, published a joint statement on the application of competition law during the corona crisis on 23 March (accessible on the Bundeskartellamt’s website). On a global level, the International Competition Network (ICN) Steering Group also published a joint statement regarding ‘Competition during and after the COVID-19 Pandemic’ on 9 April (available on the ICN’s website). We are also aware of the risk that companies might take advantage of the crisis by cartelizing or abusing their dominant position. To avoid any misunderstandings: not every co-ordination merely serves to create efficiencies to cope with the crisis. Some co-ordination initiatives rather seem to be cartels aiming at passing on the financial or economic burden of the crisis to suppliers or buyers. Such initiatives do usually not fall under the general regime described above. The risk allocation for force majeure is a question of contract law and not of economic efficiencies. We are also closely monitoring complaints regarding abuses of dominance, for example, by excessive pricing (eg for facial masks, hand sanitizers, or freight fares) or other practices put in place under the pretext of dealing with the crisis. We will not hesitate to call out such anticompetitive behaviour and to take action against it. In practice, however, not all cases of seemingly COVID-19-related price increases constitute an abuse of dominance. As an economic rule, the shift in demand typically leads to higher prices. Furthermore, the undertaking has to be in a dominant position. As regards merger review, our usual work continues under the current, sometimes difficult circumstances. The number of notifications has not significantly changed although we asked undertakings and their representatives in March to consider in each individual case whether, in view of the current situation, they could possibly also be notified later. Market investigations, however, sometimes prove difficult, as companies are struggling to answer in time. In some sectors, businesses have temporarily shut down. In others, the workload has increased and resources are lacking. Especially in hospital merger cases, the medical staff will—very understandably—hardly find the time to respond to requests for information in these times. In conclusion, I am confident to say that we will continue safeguarding competition despite these eventful times. We are open to adopting the most flexible approach possible to help undertakings to cope with the challenges of the current crisis. On the other hand, once the partial shutdown ends, effective competition will be more important than ever to make sure that the economy as a whole recovers as quickly as possible. © The Author(s) 2020. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model) http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Antitrust Enforcement Oxford University Press

The Bundeskartellamt in times of COVID-19: adaption of workflows and implications for our enforcement practice

Journal of Antitrust Enforcement , Volume 8 (2) – Jul 1, 2020

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Publisher
Oxford University Press
Copyright
© The Author(s) 2020. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com
ISSN
2050-0688
eISSN
2050-0696
DOI
10.1093/jaenfo/jnaa014
Publisher site
See Article on Publisher Site

Abstract

The consequences of the COVID-19 crisis affect us all. The necessary countermeasures adopted around the globe have a huge impact on people’s personal life, the economy, and public authorities alike. As in most European countries, the German government imposed a number of precautionary measures to reduce the spread of the coronavirus SARS-CoV-2. These measures include the closure of leisure facilities like hotels and restaurants as wells as retail shops (except for supermarkets, drugstores, and pharmacies). They restrict cross-border travels and encourage ‘social distancing’, for example, by forbidding gatherings of more than two people in public spaces. I. ADAPTION OF WORKFLOWS IN THE TIMES OF CRISIS Needless to say that these measures not only have a significant impact on the economy but also on our work. However, the Bundeskartellamt has maintained its availability from the beginning of the crisis and remains ready to cope with the daily workload. In order to comply with the precautionary measures, our staff can work from home office but may also come to their offices at the Bundeskartellamt’s premises in Bonn, where we have made sure to avoid any personal contacts. We have ensured the decision divisions’ availability by setting up additional, functional mailboxes, which every member of the corresponding department can access (the contact addresses are available on our website). Even though meetings in person at the Bundeskartellamt will not be possible until further notice, we are happy to arrange telephone conferences in order to discuss with external parties. II. IMPLICATIONS FOR OUR ENFORCEMENT PRACTICE Over the last weeks, the Bundeskartellamt has received a large number of requests for informal guidance for COVID-19-related co-ordination between competitors or within the supply chain. Once again, competition law tools have shown to be flexible enough to take into account these extraordinary circumstances: most of the co-ordinations that are necessary to cope with the current crisis do not constitute a competition law problem. It may well be that they do not amount to a restriction of competition in the first place; otherwise, many of them are likely to generate efficiencies that would outweigh any such restriction. We also acknowledge that companies are struggling to cope with the COVID-19 crisis and, therefore, require a high level of legal certainty—often on short notice—in order to facilitate their self-assessment. In cases of doubt, we encourage companies to contact the competent decision division for informal guidance at any time. We have already issued several comfort letters (‘Vorsitzendenschreiben’) declaring that we will not intervene against concrete co-ordination initiatives. In the current circumstances, the Bundeskartellamt will not actively intervene against co-ordinations put in place in order to cope with the COVID-19 crisis under the following conditions: (i) they do not go beyond what is necessary to generate efficiencies, (ii) the undertakings concerned keep the Bundeskartellamt informed about the further development of the co-ordination, and (iii) the co-ordination has to end without due delay after the end of the COVID-19 crisis. Considering the global scale of the COVID-19 crisis, the Bundeskartellamt is in close contact with other competition authorities across the world so that we can co-ordinate our actions. For example, the members of the European Competition Network (ECN), that is, the European Commission, the national competition authorities of the European Union 27 States and the European Free Trade Assosciation States, published a joint statement on the application of competition law during the corona crisis on 23 March (accessible on the Bundeskartellamt’s website). On a global level, the International Competition Network (ICN) Steering Group also published a joint statement regarding ‘Competition during and after the COVID-19 Pandemic’ on 9 April (available on the ICN’s website). We are also aware of the risk that companies might take advantage of the crisis by cartelizing or abusing their dominant position. To avoid any misunderstandings: not every co-ordination merely serves to create efficiencies to cope with the crisis. Some co-ordination initiatives rather seem to be cartels aiming at passing on the financial or economic burden of the crisis to suppliers or buyers. Such initiatives do usually not fall under the general regime described above. The risk allocation for force majeure is a question of contract law and not of economic efficiencies. We are also closely monitoring complaints regarding abuses of dominance, for example, by excessive pricing (eg for facial masks, hand sanitizers, or freight fares) or other practices put in place under the pretext of dealing with the crisis. We will not hesitate to call out such anticompetitive behaviour and to take action against it. In practice, however, not all cases of seemingly COVID-19-related price increases constitute an abuse of dominance. As an economic rule, the shift in demand typically leads to higher prices. Furthermore, the undertaking has to be in a dominant position. As regards merger review, our usual work continues under the current, sometimes difficult circumstances. The number of notifications has not significantly changed although we asked undertakings and their representatives in March to consider in each individual case whether, in view of the current situation, they could possibly also be notified later. Market investigations, however, sometimes prove difficult, as companies are struggling to answer in time. In some sectors, businesses have temporarily shut down. In others, the workload has increased and resources are lacking. Especially in hospital merger cases, the medical staff will—very understandably—hardly find the time to respond to requests for information in these times. In conclusion, I am confident to say that we will continue safeguarding competition despite these eventful times. We are open to adopting the most flexible approach possible to help undertakings to cope with the challenges of the current crisis. On the other hand, once the partial shutdown ends, effective competition will be more important than ever to make sure that the economy as a whole recovers as quickly as possible. © The Author(s) 2020. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oup.com This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model)

Journal

Journal of Antitrust EnforcementOxford University Press

Published: Jul 1, 2020

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