COVID-19: Competition Law’s response to the pandemic of the century
E.U. & Antitrust Newsletter Portugal
In order to prevent the spread of COVID-19, the guidelines for the entire European Union (“EU”) involve social distancing. This measure, while necessary from a public health perspective, is leaving various sectors of the economy, companies and employees on the brink of collapse. The inability to foresee how long these measures will last means that the true economic impact of this virus will only become known sometime in the future. Within this context, various legislative changes have been seen in both Portugal and the rest of the world. Competition Law has already undergone temporary but truly disruptive changes. Some of these are briefly described in this newsletter.
It should be taken into consideration that any State aid is, in principle, prohibited, unless considered compatible with the internal market by the EC. This prohibition aims to prevent public contributions from selectively benefiting certain companies (whether these are, inter alia, tax-related, subsidies, guarantees or subsidized loans) to the detriment of others, thus distorting healthy competition on the internal market.
According to the instructions of the Competition Authority, any notifications relating to concentrations must be submitted online. This, incidentally, was already the case with most operations reported by lawyers working in this area.
The Competition Authority, similar to other Authorities throughout Europe, guaranteed vigilance in detecting potential abuse or practices restricting competition that attempt to exploit the fragile situation arising from the current crisis.
In a decision taken precisely during the pandemic outbreak, the Competition Authority ruled against Hospital Particular do Algarve, S.A. due gun-jumping
Companies are responsible for reporting concentrations when certain criteria are met relating to the Competition Act. Until the companies obtain a decision of non-opposition from the competent body, these types of operations must be suspended. The implementing of these operations in breach of this obligation is known as gun-jumping and might trigger high fines.