There have been several excellent assessments of the various legal aspects of the novel coronavirus epidemic (or, to be precise, the epidemic of the COVID-19 disease stemming from the SARS-CoV-2 virus), including the employment law, the insurance law, the civil law and data protection law perspectives. I felt compelled to ask: is my own area of expertise, competition law, relevant at all to this subject?
The answer is (obviously…) in the affirmative and not only due to the recent decisions of the world’s most famous cartel…in fact, even at the very preliminary level, there are at least three points worth mentioning.
First, the epidemic could have a relevance from the perspective of the abuse of dominance. The epidemic already produced visible shortages of certain products, which – in the competition lawyer’s mind – immediately pops up the notions of refusal to supply and unfairly high prices: both of which are prohibited practices for a dominant undertaking. Is it possible that a certain product is not available in stores due to the fact that the only producer of that product is not willing to put its stocks onto the market? Is it possible that there is not real justification for another product’s tenfold price hike in the local village store (which could only be purchased otherwise at the hypermarket located at the faraway regional capital)? And finally: is it possible that the license agreement for a drug does not allow for its novel use, which use could be vital to combat the epidemic or its side-effects? In this respect, it is important to bear in mind that –- although all of these scenarios raise important questions, an infringement from a competition law perspective could only be established if two conditions are met under European competition law (and under most national laws):
Second, any joint action taken by market players as a result of the epidemic would also be very closely scrutinised by competition authorities. Clearly, any agreement between competitors –– aimed at avoiding price reductions to ensure the well-being of market players at the time of crisis would surely be regarded as illegal under the prohibition of anti-competitive agreements. The same would apply to an arrangement ensuring a joint and coordinated reduction of capacities or the keeping of the status quo in terms of geographic areas. These so-called “crisis cartels” - regardless of the seemingly good or even naïve intentions of the participants - have generally not been well accepted by antitrust authorities as they would destroy the very essence of competition for consumers, which is even more important in such turbulent times. Additionally, even a call for such anti-competitive measures by a large market player could be an issue, if it could be established that there was a meeting of minds between this market player and others.
Finally, various competition authorities (such as the German, the Dutch or the Hungarian authority) have a competence to enforce consumer protection laws such as those against the misleading of consumers. Now any communication by a company about its products or services that are in high demand during the epidemic needs to be crafted extremely carefully: for example, a promise of an effect to cure illnesses (despite the fact that the product in question not a registered medicine) or a . These could all be regarded as unfair commercial practices, regardless of whether the statement was made by a small pharmacy, a regional webshop or a large retail chain.
Competition authorities would thus be in a rather difficult situation when they will have to assess and evaluate epidemic-related conduct based on the various complaints or public comments they receive.