Competitors collaborate to take on COVID-19
Antitrust regulators made it easier for companies to work together to battle the pandemic’s effects, potentially paving the way for efforts to fight climate change and other global threats
As COVID-19 disrupted markets and supply chains, regulators recognized the benefits of helping companies that wished to join forces to tackle the crisis, including through forging partnerships that might normally violate competition laws. Antitrust regulators took steps to encourage appropriate collaborations, for example, between personal protective equipment producers, medical suppliers, vaccine developers and supermarkets. Regulators could potentially use similar flexibility to respond to other challenges, including the climate crisis.
Antitrust regulators show flexibility
Around the world, regulators worked to ensure antitrust laws would not thwart COVID-19 recovery efforts. For example, to assess possible cooperation projects, the European Commission published a temporary framework that recognized cooperation between competitors could ease COVID-19-related shortages of products and services. Under the framework, the EU’s Directorate-General for Competition will provide informal “comfort letters” to cooperating businesses that are concerned about compliance.
In the US, antitrust agencies acted to encourage appropriate pandemic-related collaborations. For example, companies that want to work together may request an expedited response to a business review letter. This process allows them to receive an agency response within seven days, as opposed to several months. In addition, the US Secretary of Health and Human Services has been empowered to initiate negotiations among direct competitors to reach agreements to address the pandemic. These agreements will be immune from competitor collaboration rules.
Competitor collaborations post-COVID-19
COVID-19 has shown the benefits of competitor collaborations and a flexible approach by competition regulators when faced with a global threat. Looking beyond COVID-19, competitor collaborations could be one weapon used to tackle other challenges, including climate change and global efforts needed to achieve the United Nations Sustainable Development Goals.
Antitrust regulators may not wish to simply duplicate the methods used to ease competition rules during COVID-19 and apply them to, for example, climate change initiatives. But these solutions offer an example of how a dynamic and practical approach by regulators could potentially facilitate real change.