Swiss Antitrust Watchdog Says Cartel Law Applies Amid Crisis

Law360, London (March 26, 2020, 5:26 PM GMT) -- Switzerland's antitrust enforcer issued a warning Thursday that it would not tolerate companies taking advantage of the coronavirus pandemic to restrict competition.

The Swiss Competition Commission, known as COMCO, said it understands that responding to the country's needs during the pandemic may involve coordination between competing businesses, but it reminded companies that it will continue to police the market to prevent cartel-like behavior.

“Such circumstances do not constitute a reason or justification for a violation of cartel law,” the regulator said. “The general economic situation should not be taken advantage of to create cartels and agree on prices.”

The announcement comes after European competition authorities gave the green light on Monday for suppliers to coordinate distribution of scarce products without being brought up on cartel charges. The European Competition Network said it would not "actively intervene" against any cooperation aimed at avoiding supply shortages but warned against price gouging — particularly when it comes to scarce items like hand sanitizer and masks.

The impact of the coronavirus pandemic may trigger the need for companies to cooperate in order to ensure the supply and fair distribution of scarce products to all consumers, COMCO said, but private companies must still respect competition law.

COMCO said it has received various inquiries concerning companies trying to maximize profits from sought-after products such as face masks and disinfection products.

“The possibilities for intervention based on cartel law only exist when illegal price agreements are concluded or a company abuses its dominant position,” the regulator said.

Meanwhile, the U.K.'s competition authority said Wednesday that enforcers are not looking to penalize companies for coordinating to help the country respond to the coronavirus outbreak, but warned there's "no free pass" for collusion that's not essential.

Companies will not be targeted as long as the coordination is directly aimed at responding to the outbreak, is appropriate and necessary to avoid shortages and is clearly in the public interest. The measures also must be temporary and not be in place longer than necessary, the Competition and Markets Authority said.

In the U.S., the Department of Justice and Federal Trade Commission said Tuesday that they will offer an expedited process for companies seeking assurances that activities related to combating the spread of the coronavirus don't violate antitrust law.

--Additional reporting by Matthew Perlman. Editing by Alyssa Miller.

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