COVID-19 Coronavirus – Hit Pause to Competition Law?

This blog post is being published for The Trade Practitioner as part of a content partnership with our Competition – Antitrust Practice. Please contact Nicola Elam and Dickie Chan with any questions.

Beyond relaxing night-time delivery restrictions on supermarkets to keep up with the surge in demand for basic grocery items, it has been reported by Sky News that the UK Secretary of State for Environment, Food and Rural Affairs, George Eustice, was engaged in conversation with plans to temporarily waive competition rules prohibiting industry collaboration during the coronavirus outbreak.

The ”Big Four” retailers held a call with Eustice yesterday afternoon asking for a temporary exemption from competition rules if the coronavirus outbreak leads to a pandemic. This would allow collaboration on deliveries between retailers in remote areas if shops are forced to close down due to the virus.

It is not the first time that the idea of suspending competition law has been broached. In an earlier post, it was discussed that the possibility of a no-deal Brexit would led to calls for the UK government to provide “cast-iron guarantees” that businesses in the food supply chain will be permitted to work together to discuss and tackle shortages, in order to decide where to prioritise shipments, in a way that may give rise to questions of compliance with competition law.

A decision to temporarily waive competition law would be the first time that such a measure would be implemented in decades.  But it would be likely to be limited in scope and tightly controlled.  The UK Competition and Markets Authority (CMA) is already keeping a close eye on how the market is responding to the coronavirus impact.  Last week, the CMA announced that it would assess whether to advise the UK government to take action to regulate prices, which was reported in our post, “Saved by the Gel?”

It is likely that the UK government will consult with the CMA for any temporary suspension of competition restrictions, and the CMA would be in the lead in ensuring that any relaxation was not abused. Only time will tell what actions will be taken amid the growing concerns over the coronavirus.  The pressure is already on the government to show that it can take the right decisions, both to minimise the direct health impact of the virus, but also to minimise the damage it does to the economy.