Suspension-Continuation Dichotomy: An Analysis of Antitrust Laws Amid COVID-19

The present-day outbreak of COVID-19 has disrupted the Antitrust Law regime. The crisis has not only confronted the markets to bloat but also led to demand-supply forces to fluctuate. The economic crisis amid coronavirus has led to a decreased demand for products and services of many industries. Contrastingly, the healthcare and food industries are adjusting with enormous demand requirements in this dynamic market structure. As the major chunk of the population contrives to respond to the effects of the pandemic, they must become receptive of the opportunities and challenges that the competition law throws on them.

Considering the novel coronavirus, many jurisdictions have taken significant steps in the management of the competition. The competition authorities have commonly decided that such practices that are anti-competitive in the daily regime of competition law could be allowed temporarily. In this Contempo, the Norwegian Government has granted a 3-month exemption to the transportation sector as a special measure due to COVID – 19. Similarly, statements from regulators in Germany, the UK, and the Netherlands stressed upon relaxing or suspending the competition rules and underline that enforcement action would not be taken against operators who cooperate to prevent a shortage of supply. In Ireland, the Competition and Consumer Protection Commission (CCPC) has posted on its website a statement by the European Competition Network (ECN) statingwill not actively intervene against necessary and temporary measures put in place to avoid a shortage of supply.” It seems that in such footing, tailoring and softening of antitrust principles is an easier way to respond to the crisis, adopted by most of the countries.

In India, though the Competition Commission of India (CCI), the governing body of competition law, has closed its office in threat of coronavirus, it has acknowledged the repercussions of COVID-19 and has taken prompt measures to continue its working during this period of the pandemic. The CCI issued an advisory to businesses in this time of the pandemic. In this extraordinary situation, the Commission has taken due regard to factors like accrual of benefits to consumers, improvement in production or distribution of goods or provision of services and promotion of technical, scientific and economic development by means of production or distribution of goods. The Commission further warned businesses not to take advantage of COVID-19 to contravene any of the provisions of the Competition Act. In the latest public notice issued on 20 April 2020, the CCI allowed information concerning the provisions of Section 3 and 4 and combinations notices to be filed electronically. Further, the CCI also made pre-filing consultation (PFC) through video conference.

Considering the current scenario, maintaining and protecting the long-lived principles of antitrust law can be favourable. The government and competition authorities must balance the duelling objectives of ensuring such quick and efficient responses to the crisis, thereby, maintaining the antitrust foundation. Interestingly, the ECN takes a flip-side approach stating that “measures to ensure the supply and fair distribution of scarce products to all consumers” are “unlikely to be problematic since they would either not amount to a restriction of competition under Article 101 TFEU/53 EEA or generate efficiencies that would most likely outweigh any such restriction.” As follows, the German Federal Cartel Office averred that there was no reason for emergency legislation, since “competition law permits extensive cooperation between companies if there are good reasons for this – which is the case in the current situation.” In the same vein, the U.S. Department of Justice made public its intention to hold culpable anyone who violates the antitrust laws of the United States relating to the manufacturing, distribution or sale of public health products such as face masks, respirators and diagnostics. Similarly, the Italian Competition Authority and the Polish Office for Competition and Consumer Protection initiated investigations against platforms for misleading consumers regarding the effectiveness of products. Further, the UK Competition and Markets Authority have set up a COVID-19 taskforce to deal, among other things, with the exorbitant prices being charged online for sanitizer sprays and face masks.

Interestingly, the pandemic is advancing dubious nature to the classic antitrust topics. The dichotomy of suspension or continuance of competition laws in this pendulous nature of competition law is equivocal. However, it is important to bear in mind that any form of cooperation or corroboration among competitors will attract anti-competitive agreement under the competition law unless otherwise exempted. The contemporaneous crisis and the threat of coronavirus will not waive off the competition fundamentals. The suspension of any law, specifically, the competition law during a pandemic is not a good option for any country. Antitrust law always applies, even in time of crisis, because competition can never be finished in the market. Suspension of competition law, for the time being, or a longer period, should never be done because it shambles the rudimentary premises of the antitrust law principles.

Assumingly, if the competition law principles are suspended, there will be no hold of the anti-competitive practices in the country. Moreover, in the situation of a pandemic, specific legislation like antitrust regulations tighten the market discourse by its binding nature. The dichotomy often impels the competition authorities to use ‘competition’ as a yardstick for measuring the legality and smooth functioning of the market. The competition authorities’ postulates ‘competition’ as a base model and as a ground for determining the legality of an agreement. If suspended, the effective and efficient running of the market and its players will be hampered. The softening and tightening of competition model are the cornerstone of a competitive market. Competition, an indispensable part of human life and trade, if suspended, will have a malignant effect on the market and will lose its benign use.

Notably, the joint statement released by the ECN on the application of competition law during the crisis rules out that competition law applies similarly in the time of crisis as it applies in the times of growth and prosperity. Businesses that are incurring losses in these tough times, may look out for corroboration with their counterparts (competitors). On the other hand, businesses that are selling their products (essential/scare goods) may take advantage of the situation or try bundling non-essential commodities with essential ones. Whilst the competition among competitors, practices like unfair/discriminatory pricing, cartel formation seems to be an alternative in the present scenario. Thus, there is no doubt that competition laws are flexible with time, they can be relaxed at most but cannot be suspended outrightly.


ABOUT THE AUTHORS

Ayushi Dubey

Ayushi Dubey

Ayushi Dubey is a fourth-year student of Institute of Law, Nirma University, Ahmedabad. She has a keen interest in Competition and Intellectual Property Laws.

Yash Jain

Yash Jain

Yash Jain is a fourth-year student of Institute of Law, Nirma University, Ahmedabad. He has a keen interest in Competition and Commercial Laws.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s