Many companies are suffering major economic consequences due to the COVID-19 coronavirus crisis. In order to limit the economic damage due to the crisis, the Netherlands Authority for Consumers & Markets (ACM) is relaxing its supervision of compliance with competition rules.
More room for collaboration
ACM is giving companies more room to make collaborative agreements which would not be possible in non-crisis circumstances. It is possible to make such arrangements within the framework of the competition rules if they can be justified by the public interest, as long as they do not go beyond what is necessary in relation to the crisis. Certain considerations for justification may be taken into account which, under normal circumstances, would not be possible. As ACM chairman Martijn Snoep put it in an interview with the Dutch financial newspaper Het Financieele Dagblad: “These times are not normal.”
Snoep goes on to give several examples of agreements which will be considered permissible for the time being. Under this ‘crisis approach’, companies may be permitted to exchange competition-sensitive information the exchange of which is normally prohibited. For example, supermarkets may inform each other of their stocks and medicine wholesalers may keep each other up-to-date regarding the quantities of articles they are selling. Logistics service providers may collaborate in the provision of food to Dutch citizens. Sectors may make arrangements in order to accommodate debtors. ACM is also relaxing enforcement of its regulations in respect of mergers and takeovers. Should companies encounter problems due to falling demand and desire to merge in order to avoid liquidation, ACM will be accommodating in its handling of any applications for exemption from the standstill obligation. This means that ACM approval will not have to be obtained received prior to concentration.
No end to enforcement
However, Snoep calls on companies to limit themselves to what is strictly necessary in order to defuse the crisis. This means that, even in this difficult time, a competition law analysis must be carried out as to whether an arrangement is prohibited, or justified on the basis of considerations of, for example, the public interest. ACM also warns on its website that the COVID-19 crisis does not entitle companies to make abuse of the present insecure situation and of scarcity. Companies are not allowed to raise prices by mutual agreement. Dominant companies will remain prohibited from implementing excessive price increases. It is not allowed to mislead consumers. Sellers shall not make any unjustified claims. Companies must continue to provide correct and realistic information if, due for example to factory closures, products are to be delivered late or cannot be delivered at all. According to Snoep, ACM will “not hesitate to intervene” in such circumstances.
If you have any more questions on this subject, please contact our EU & Competition law team.
