Immediately after the outbreak of the corona crisis, the Commission encouraged Member States to make every effort needed to financially support ailing sectors such as tourism, transport and retail. The Commission promised that the state aid rules would be relaxed and that scope would be created for various types of state aid. Member States are allowed, for instance, to offer companies maximum support of €800,000 (normally €200,000), favourable government loans may be granted to companies and extra financial measures may be taken (such as government guarantees) to ensure that banks continue to finance companies. The Commission has also promised to efficiently handle applications for state aid for specific companies. It decided within 24 hours, for instance, to approve €12 million in state aid granted to event organisers by the Danish government. The Commission stated that the approval was granted because the corona crisis is an extraordinary circumstance.
Pragmatic
At a national level, the competition rules will also be pragmatically applied. The ACM (Netherlands Authority for Consumers Markets) has stated that, due to the exceptional circumstances resulting from the coronavirus, the cartel prohibition will be less strictly enforced. Supermarkets, for instance, are allowed to inform each other about their stocks. Logistics service providers are allowed to work together with a view to the efficient distribution of groceries. Sectors may make agreements with each other on a flexible approach to debtors. And medicine wholesalers may share information on the number of medicines that they sell. Similar developments are taking place in other Member States. In Norway, for instance, approval was given for cooperation between two airlines, to safeguard the transport of passengers and goods. ACM has furthermore announced that in the event of financial need it will take a lenient approach to requests for exemption from the standstill period in mergers and acquisitions. ACM’s approval therefore need not be awaited.
Warning
However, ACM has warned that companies may not exceed the limits of what is necessary to control the crisis. Companies may not abuse uncertainty and scarcity. Dominant companies may therefore still not charge excessive prices. Making agreements to increase prices is also still prohibited; the same applies to misleading consumers. Sellers may therefore not make unjustified claims. Companies must continue to provide correct and realistic information if products cannot be delivered in time or at all, for instance due to the closure of factories. ACM has rightly promised to take strict action if companies suddenly charge exorbitant prices or mislead consumers.
This blog was also published on Mr-online.
