March 17, 2020
Compliance Week quoted McGuireWoods London partner Matthew Hall in a March 16, 2020, article offering advice for European compliance officers as the world deals with the coronavirus pandemic. In the article, Hall noted three areas of competition law likely to be affected by the coronavirus pandemic — areas that may pose serious concerns for companies.
The first of these, he said, is state aid. He expects European governments will follow Denmark’s example and notify the EU Commission that they will provide funding to companies and industries suffering from the economic fallout of the pandemic. “The key questions are: what sort of amounts will the Commission deem acceptable, what industries can be covered, and what conditions will be put on the funding?” Hall noted.
The second concern, he said, is excessive pricing. “Companies that have a dominant position can be found to be abusing that position if they hike prices as demand spikes,” Hall said. “However, a company that does not have a dominant position can effectively price-gouge all it wants because, in effect, customers are supposed to have enough choice in the market to use another supplier if they want to. It is unclear what action — if any — the [UK Competition and Markets Authority] is considering under competition law against non-dominant companies that carry out such practices.”
Hall cited cooperation between competitors as the third concern. In hard times, competitors may need to work together, potentially blurring the boundaries of fair competition. “[E]ven if EU governments do want to relax the rules to enable closer coordination between competitors, it does not mean that competition law ceases to apply to the arrangements they put in place,” Hall noted. “Companies can still be found to have breached competition law, even if the government has seemingly sanctioned them by allowing closer cooperation.”