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Law360 (April 9, 2020, 9:04 PM EDT) -- Antitrust watchdogs around the world are making it clear that they're OK with a limited amount of cooperation between companies in order to get much-needed products where they need to go amid the coronavirus pandemic.
The International Competition Network, a loosely organized group of competition enforcers, said Thursday that the pandemic has posed "unprecedented health, social, and economic challenges" for antitrust enforcers, but also for businesses, which may need to coordinate their operations to a certain extent for the good of the public overall.
"This extraordinary situation may trigger the need for competitors to cooperate temporarily in order to ensure the supply and distribution of scarce products and services that protect the health and safety of all consumers," the network said in a statement. "Such joint efforts ... may be a necessary response to protect consumers and provide products or services that might not be available otherwise."
In such cases, the network said that "it can be appropriate for competition agencies to accommodate collaboration between competitors necessary to address the circumstances of the crisis to the extent that their laws permit."
The network's statement came the day that the number of confirmed cases of COVID-19, the disease caused by the novel coronavirus, reached 1.5 million worldwide. More than 90,000 people have died of the disease, according to data collected by Johns Hopkins University.
As countries scramble to stop the spread of the virus, people around the world have descended on supermarkets and pharmacies to stock up — first on masks, hand sanitizer and other disinfectants in the hopes of avoiding the disease and then on groceries and other household products as they prepare for what may become months in near isolation.
The result has been bare shelves in many stores around the world, with companies struggling to keep up with demand on a supply chain that was built for a general public that shops weekly and not monthly.
In the wake of the network's new guidance, some of its about 130 members made it clear to businesses operating in their countries that they would not heavily scrutinize collaboration that appeared to be for the benefit of the public during the pandemic.
Canada's Competition Bureau said Thursday that it would "generally refrain from exercising scrutiny" of business collaborations as long as there was a "clear imperative" that the companies were working together for the public good, recognizing the need for the "rapid establishment" of such partnerships to meet demand for the time being.
"At the same time, the bureau wishes to underline that it has zero tolerance for any attempts to abuse this flexibility or the guidance offered herein as cover for unnecessary conduct that would violate the Competition Act," the agency said in a statement.
The head of Germany's Bundeskartellamt similarly recognized the "the need to be vigilant and at the same time act with a sense of proportion."
The sentiment of vigilance paired with flexibility has already been agreed upon in Europe, where the continent's antitrust enforcers agreed in late March to grant a certain amount to leeway to companies working to keep supplies flowing during the pandemic.
The European Competition Network, composed of competition authorities from the 27 member states of the European Union and the head of competition for the bloc's own European Commission, said that it would not "actively intervene" against any cooperation aimed at avoiding supply shortages.
When the European network issued that guidance 17 days ago, the continent had roughly 170,000 confirmed cases of the virus, with the much-afflicted Italy suffering the brunt of the virus' impact with more than 6,000 deaths.
As of Thursday afternoon, nearly 750,000 people across Europe were confirmed to be suffering with the disease. Italy's death toll has since tripled and currently rests at just over 18,000, though it appears to have crested the apex of the pandemic and its daily number of deaths and new infections have begun receding.
--Editing by Peter Rozovsky.
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