Antitrust: Commission provides guidance on allowing limited cooperation among businesses, especially for critical hospital medicines during the #Coronavirus outbreak

The European Commission has published a Temporary Framework Communication to provide antitrust guidance to companies co-operating in response to urgent situations related to the current coronavirus outbreak.

The coronavirus outbreak has given rise to a general supply shock resulting from the disruption of supply chains and a demand surge caused mainly by a steep rise in demand for certain products and services, notably in the health sector. These circumstances risk leading to shortages in critical medical goods, which may worsen as the pandemic evolves.

The Temporary Framework is meant to provide antitrust guidance to companies willing to temporarily cooperate and coordinate their activities in order to increase production in the most effective way and optimize supply of, in particular, urgently needed hospital medicines. In most situations, the oral guidance that the Commission has been giving to companies is sufficient.

However, the Commission is also ready to exceptionally provide companies with written comfort concerning specific cooperation projects that need to be swiftly implemented in order to effectively tackle the coronavirus outbreak. The Commission is also using today this procedure for the first time and is providing a comfort letter to Medicines for Europe.

In the current circumstances, the temporary co-operation appears justifiable under EU antitrust law. Executive Vice President Margrethe Vestager (pictured) in charge of competition policy said: “We need to make sure that there is sufficient supply of the critical hospital medicines used to treat coronavirus patients. To avoid the risk of shortages of essential and scarce products and services because of the unprecedented surge in demand due to the pandemic, we need businesses to cooperate and do it in line with European Competition rules. So to ensure supply we will urgently provide businesses with sufficient guidance and comfort to facilitate cooperation initiatives boosting the production of products in high demand. The temporary framework adopted today explains when and how firms can obtain guidance or written comfort in line with our competition rules.”

The full press release is available online.

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