In the United States, The Federal Trade Commission (FTC) and Department of Justice (DOJ) faced new issues this quarter with the unprecedented challenges brought about by the COVID-19 global pandemic. In March, the agencies made certain changes to the merger review process to accommodate businesses and counsel working remotely. However, merger reviews, challenges, trials and
Amid the economic shocks caused by the Coronavirus (COVID-19) crisis, many industries are facing reduced demand for their products and services. Other industries—notably healthcare and food—are adjusting rapidly to expanding demand requirements and changing consumption patterns due to large-scale population confinement in several countries. Significant over- or under-capacity can create incentives, or even the necessity, to collaborate in ways that may push the limits of antitrust and competition rules.
On 23 March 2020, the European Competition Network (ECN) took unprecedented action. ECN, the network of competition enforcement authorities in the European Union, issued a joint statement announcing that its members will not actively intervene against “necessary and temporary” measures, including cooperation among competitors, in order to avoid a “shortage of supply.” At the same time, the ECN cautioned that its members would actively intervene against any measures taken by companies to limit the supply or charge excessive prices for critical products, such as masks or hand sanitising gel. This joint statement followed steps taken by several competition authorities in Europe to signal relaxed antitrust treatment of certain types of collaboration.
This article provides an overview of how companies can navigate these rapidly evolving developments in line with EU competition law. In brief, competition rules still apply, but are sufficiently flexible to allow critical industry adjustments during economic shocks that cannot be addressed in the short term by market forces, which are currently in turmoil.
The European Commission has reiterated its position that if a business allows for the non-exclusive licensing of its products in the EEA, such licensor can no longer control where, to whom, and in what manner (online/off-line) the products can be sold within the EEA.
On 30 January 2020, the Commission fined NBCUniversal Media, LLC, and other Comcast Group companies (collectively, NBCUniversal) EUR 14.327 million for restricting licensees from selling licensed products across customer groups and across countries within the European Economic Area (EEA). This is the third time in one year that the Commission has fined a brand owner for such restrictions, following Nike and Sanrio.
Although agreements restricting out-of-territory sales (i.e., market partitioning by territory) have long been prohibited under Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), the Commission’s increased enforcement activity on vertical restraints is remarkable.
McDermott’s Annual European Competition Review summarizes key developments in European competition rules. During the previous year, several new regulations, notices and guidelines were issued by the European Commission. There were also many interesting cases decided by the General Court and the Court of Justice of the European Union. All these new rules and judicial decisions…