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CMA approach to business cooperation in response to COVID-19

26 March

The Competition and Markets Authority has released a statement to reassure businesses that no action will be taken against coordination between businesses to assist with the response to the COVID-19 pandemic.

In usual circumstances, competition law prohibits agreements and arrangements between businesses that restrict competition.

As a result of the current pandemic, many businesses are working tirelessly in assisting efforts to provide essential goods and services to consumers and ensuring that key workers are able to carry out essential roles.

Assisting with these efforts may require coordination between competing businesses and therefore the CMA have announced that no action will be taken against any coordination which is undertaken solely to address concerns arising from the current crisis, however this coordination must not go beyond or last longer than is necessary.

In order to ensure that essential products and services can continue to be supplied and distributed during this period, the CMA has confirmed that it will not take action where the coordination between businesses:

  1. is appropriate and necessary in order to avoid a shortage, or ensure security, of supply;
  2. is clearly in the public interest;
  3. contributes to the benefit or wellbeing of consumers;
  4. deals with critical issues that arise as a result of the COVID-19 pandemic, and;
  5. lasts no longer than is necessary to deal with these critical issues.

Any coordination between businesses which does not fall within the above criteria will result in action being taken by the CMA.

The CMA will provide a further update withdrawing this guidance when it considers it no longer to be necessary.

The CMA’s approach to business cooperation in response to COVID-19 can be found here.

For further information contact Backhouse Jones on 01254 828 300.

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