By Marc Picat
Undertakings are facing exceptional challenges due to the COVID-19 crisis. In this respect, the European Commission issued on 8 April a Temporary Framework indicating that in the health sector certain type of cooperation through trade associations would not be problematic to the extent that relevant safeguards against anticompetitive exchanges of information are put in place.
The purpose of this Temporary Framework concerns “possible forms of cooperation between undertakings in order to ensure the supply and adequate distribution of essential scarce products and services during the COVID-19 outbreak and thus address the shortages of such essential products and services resulting first and foremost from the rapid and exponential growth of demand. This includes notably medicines and medical equipment that are used to test and treat COVID-19 patients or are necessary to mitigate and possibly overcome the outbreak. Such cooperation could take place among undertakings active within the relevant sector to overcome this shortage”.
Theses exceptional circumstances may trigger the need for undertakings to cooperate temporally with each other in order to overcome or at least to mitigate the effects of this crisis.
Undertakings thus might need to adopt different forms of cooperation, including cooperation that require exchange of information that would normally be problematic from a competition point of view. In other words, the European Commission, like the other national competition authorities, will continue to apply competition antitrust rules but not actively intervene against these necessary and temporary measures in order to avoid a shortage of supply of medicinal products.
Accordingly, this 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 optimise supply of, in particular, urgently needed hospital medicines.
However, the concerned undertakings are required to document and keep all exchanges and agreements whatsoever between them and available upon request from the European Commission.
Furthermore, where such cooperation is required by public authorities and/or governments, it would not in any event constitute an antitrust infringement.
In addition, the European Commission would be exceptionally available to provide prior guidance to undertakings via comfort letter to assist them in assessing the legality of their cooperation projects that need to be implemented, especially where there is still uncertainty about whether such initiatives are compatible with EU competition law.
This statement is somewhat ambiguous and might leave undertakings puzzled with regard to the scope of the possible cooperation between them. In this context, pharumlegal would be keen to highlight these new exceptional type of cooperation, assess the possibilities currently proposed by the European Commission and provide a legal assistance to concerned undertakings while anticipating the end of the lockdown.