Competition Law Enforcement and the COVID-19 Crisis: Business As (Un)usual ?

Abstract

The unexpected shock provoked by the COVID-19 crisis and the measures taken to limit the spread of the pandemic have affected the functioning of many markets. Throughout the world, competition authorities which, in the last decade, had been enforcing their laws in the context of steady economic growth have had to adjust their enforcement practices not only to the difficulties of running their operations created by lockdowns but more importantly to collapsing markets or markets for essential goods characterized by severe shortages, in a context of deep economic depression with many firms facing severe liquidity constraints or even the threat of bankruptcy. Competition authorities have responded to these extraordinarily brutal circumstances by adjusting their enforcement priorities, exempting certain forms of cooperation, relaxing their standards for efficiency defence, adopting emergency procedures, allowing certain forms of state aids, accepting mergers because the target suddenly was a failing firm etc…. while at the same time insisting that these changes did not mean a weakening or an alteration of the competition law principles that they previously followed. This article describes in detail the responses of a number of competition authorities, analyzes the differences in the responses to the COVID-19 crisis of various governments and competition authorities and discusses whether these responses imply a departure from the traditionally accepted goals and enforcement principles of competition.

Keywords: competition law, COVID-19, excessive prices, horizontal agreements, public interest, efficiencies

JEL Classification: D41, D42, D62, H84, K21, L51