Cooperation between competitors during the crisis | In Principle

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Cooperation between competitors during the crisis

One method companies have of dealing with the crisis is to cooperate with their rivals. But before entering into such cooperation, it is worth examining whether it constitutes a conspiracy subject to sanctions from the national competition authority, the European Commission or other antitrust bodies.

The antitrust case law has taken the position that an economic crisis is not in itself a circumstance justifying restriction of competition between market rivals (Court of Justice of the European Union in C-209/07, Beef Industry Development Society). But the courts have not said whether a health crisis threatening millions of people might be such a circumstance. It might be expected that in making such an assessment, courts and antitrust authorities would look beyond the purely economic factors they have considered in the past to reflect other, non-economic values.

But this approach might require a change in the regulations, or at least development of guidelines by national competition authorities. For example, in the UK solutions are soon to be introduced loosening antitrust prohibitions for retail chains. Similarly, within the European Competition Network, a platform for cooperation between national antitrust authorities, it has been agreed that they will not pursue antitrust interventions against essential temporary cooperation between competitors ensuring consumers’ access to products in short supply.

Nonetheless, undoubtedly the great majority of arrangements between competitors will continue to viewed harshly as prohibited conspiracies. This will apply in particular to arrangements unfairly improving the situation of the conspiring firms at the cost of their customers. Examples could include:

  • Agreements on a common interpretation of force majeure
  • Agreements on shared standards for actions taken with respect to certain customers or suppliers (one-sidedly advantageous to the undertakings imposing such standards)
  • Agreements on use of production capacity (such as OPEC’s unsuccessful attempt to drastically reduce oil production)
  • Agreements setting minimum or fixed prices for sale or resale
  • Exchange of information on competitors’ plans for price increases or decreases
  • Agreements to pass on certain costs (e.g. for increases in exchange rates) to customers.

Dr Antoni Bolecki, attorney-at-law, Competition and Consumer Protection practice, Wardyński & Partners