What significance does the coronavirus crisis have for antitrust law? We summarise the most important opportunities and risks.
Update of 3 June 2020
The Draft law to mitigate the consequences of the COVID 19 pandemic in competition law mentioned in the Update of 4 May 2020 below has entered into force on 29 May 2020.
End Update of 3 June 2020
Update of 4 May 2020 - Draft law to mitigate the consequences of the COVID 19 pandemic in competition law
With a law to be passed soon, the Federal Government intends to (i) extend the review periods in merger control and (ii) temporarily suspend the obligation to pay interest in cartel fine law.
- For merger notifications received by the Bundeskartellamt during the acute phase of the corona pandemic (1 March to 31 May 2020) the examination periods for a Phase I clearance are to be extended from one to two months and for a Phase II clearance from four to six months.
- In addition, the obligation to pay interest on fines under cartel law (Section 81 (6) GWB) will be suspended until 30 June 2021 if payment facilities (e.g. deferral) have been granted.
The Act enters into force on the day following its promulgation. We expect promulgation for June 2020.
End Update of 4 May 2020
The coronavirus should not stop antitrust law, but German economic leaders are expressing interest in temporarily relaxing certain regulations in order to encourage companies to work closely together in response to the crisis.
Federal Economics Minister Peter Altmaier wants to discuss cooperation between the food industry and retail trade with cartel authorities, which Andreas Mundt, President of the Federal Cartel Office (Bundeskartellamt), has welcomed by saying that he "is of course available for any discussion with companies, associations and politics."
Germany is not alone in recognising that cooperation between businesses and industries are necessary. The British government has announced comparable flexibility. In Norway, too, a temporary exemption from the ban on cartels has been in force for days throughout the entire transport sector. For more information on cartel law and Germany's response to the crisis, follow this link to the main article.
Competition rules are sufficient to counter the crisis
In contrast, EU competition authorities, which are linked in the European Competition Network (ECN), do not consider changes in the law necessary at this time. European authorities have recognised the social and economic impact of the crisis and stress that competition rules are flexible enough to account for changing market realities such as the coronavirus crisis. According to EU authorities, companies in need of further guidance can turn to competition authorities for assistance.
Accordingly, in a notification dated 17 March 2020, the German Bundeskartellamt emphasised that it is able to cooperate with struggling companies.
Hence, companies affected by the crisis should take up the ball and examine what freedoms competition law leaves them to improve their services and reduce costs.