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FCO guidance on cooperation between competitors during COVID-19 crisis

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Germany

The antitrust authorities have signalled their approval for cooperation between competitors during the ongoing COVID-19 crisis. According to the European Commission, in times of crisis there might be a need for competitors to "coordinate on production stock management and potentially distribution". President of the Federal Cartel Office (FCO) Andreas Mundt and EU Commissioner Margrethe Vestager emphasise that the authorities are open to direct communication.

According to Mundt, even after the crisis, cooperation might be necessary to overcome economic difficulties. However, he also issued a warning: "if companies try to exploit this emergency situation, for example by price fixing to the detriment of consumers or by abusing their dominant position we will act vigilant."

Cooperation in times of crisis
On 8 April 2020 the European Commission published "Framework Communication addressing the antitrust issues related to cooperation between competitors in COVID-19 related urgency situations". The commission acknowledged that companies and competitors might have to cooperate to safeguard the shortened supply of goods. Special consideration is attributed, but not limited, to the health sector and medicine.

For example, the European Commission proposes that a trade association can be entrusted to:

  • coordinate joint transport for input materials;
  • contribute to identifying those essential medicines for which, in view of forecasted
  • production, there are shortage risks;
  • aggregate production and capacity information, without exchanging individual company
  • information;
  • predict demand on a national level; and
  • share aggregate supply gap information and which undertakings are able to fill the supply gap (without information exchange between competitors).

Activities regarding the production, stock and distribution of goods may require exchanges of commercially sensitive information and a certain level of coordination. Such activities will not violate competition law if they are temporary and do not exceed what is strictly necessary.

On 15 April 2020 Mundt reiterated that joint action might be necessary after the crisis to overcome economic difficulties: "To the extent that such activities are necessary due to the current crisis, they are – for an unlimited time – also not problematic from a competition law point of view."

Risk minimisation
Mundt emphasised that, since the outbreak of the COVID-19 pandemic, the FCO has held several talks with many undertakings regarding the exemption of cooperation between competitors. These requests concerned, in particular, cooperation in storage and redistribution between undertakings special cooperation due to the COVID-19 crisis, the FCO can be contacted – Mundt acknowledges an exchange of experiences might be helpful for companies – especially during the COVID-19

For further information on this topic please contact Sascha Dethof at Fieldfisher (Germany) LLP by telephone (+49 211 950 749 0) or email (sascha.dethof@fieldfisher.com).

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Areas of Expertise

Antitrust