Euro Competition Network Competition law in the context of the war in Ukraine

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PREVIEW

On 21 March 2022, the European Competition Network (ECN), the network of authorities composed of the European Commission, the EFTA Surveillance Authority and the national competition authorities of all EU Member States (NCAs ), issued a joint statement on the application of competition law in the context of the war in Ukraine (the joint statement).

IN DEPTH

The joint statement begins with a reference to the European Council statement of 24 February 2022 and condemns “In the strongest possible terms» Russia’s unprecedented military aggression against Ukraine.

She then explains, as she did earlier in her joint statement on the application of competition law during the COVID-19 crisis, that the various EU/EEA competition instruments have mechanisms in place to take into account, where applicable and necessary, market and economic developments.

The joint statement goes on to reiterate that the objective of competition rules is to ensure a level playing field between businesses and states that “[t]its objective remains relevant also in a period when companies and the economy as a whole are suffering from crisis conditions.”

That said, the ECN recognizes that the current extraordinary situation may cause businesses to face serious disruptions caused by the impact of war and/or sanctions on the internal market, for example by cooperating to:

  • ensure the purchase, supply and equitable distribution of rare products and inputs; or

  • mitigate serious economic consequences, including those arising from compliance with EU sanctions.

The REC considers that, given the current circumstances, such cooperation would probably not constitute a restriction of competition within the meaning of Art. 101 TFEU / art. 53 EEA, or would generate efficiencies that would most likely outweigh such a restriction.

The Joint Statement explicitly states that “in the current circumstances, the REC will not actively intervene against strictly necessary and temporary measures aimed specifically at avoiding the aforementioned serious disruptions caused by the impact of war and/or sanctions on the internal market.”

However, the joint statement also warns that the current crisis should not be used to undermine a level playing field between businesses and that the REC will not hesitate to take action against businesses that take advantage of the current situation by taking action. engaging in cartels or abusing their dominant market position. It explicitly refers to the importance of ensuring that essential products (eg energy, food, raw materials) remain available at competitive prices.

The joint statement ends with an invitation to companies to contact the EC, the NCAs or the EFTA Surveillance Authority if, following their self-assessment, they still have doubts about the compatibility of their cooperation initiatives with EU/EEA competition law.

As you may recall, following the COVID-19 crisis, the REC’s joint statement was followed by a communication from the European Commission establishing a “temporary framework for the assessment of antitrust issues related to business cooperation in response to emergency situations resulting from the current COVID-19 outbreak”. It remains to be seen whether this will also be the case this time around. The State aid Temporary Framework to support the EU economy following Russia’s invasion of Ukraine is in any case forthcoming (see here for more information) .

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