ANTITRUST LAW IN THE CORONA CRISIS (4): MARKET POWER

Antitrust law also applies in times of crisis. Antitrust law imposes a special responsibility on companies with market power. In times of crisis, their market behaviour and commercial practices can quickly come into the focus of the antitrust authorities.

The closing of national borders for the movement of goods can narrow the relevant markets under competition law and thus create market dominance, which did not exist when borders where still open. A company's market position can also be strengthened by the crisis as a result of competitors no longer being able to maintain their production or withdrawing from the market altogether. In addition, dependence due to scarcity, e.g. on one supplier, may lead to special responsibilities under the German rules for companies with so-called relative market power even where they lack market dominance.

Anyone with such market power must not abuse it. –If, despite this, a company still e.g. charges excessive prices, it risks an intervention by the antitrust authorities. Many antitrust authorities have already announced that they will critically examine price increases as a result of the crisis, in particular, for scarce goods, health care services and basic supplies. However, even in times of crisis not every price increase is an abuse of market power: Increased production costs, particularly as a result of the crisis, can legitimise corresponding price increases even by a company with market power.

Other prominent examples of abusing market power are refusals to supply and discriminations against suppliers or customers. However, crisis-related bottleneck problems can be an objective reason to justify a partial or complete refusal to supply or unequal treatment of business partners under antitrust law. This applies, for instance, to a preferential supply of regular customers compared to new customers. However, a dominant supplier of goods or services that are in short supply as a result of the crisis may still be obliged under antitrust law to scale selling, i.e. to supplying its customers according to their importance (e.g. according to the volume purchased in the last financial year). A preference for regular customers remains possible in this context, too.

Since the corona crisis does not suspend any obligations under antitrust law, the following applies in particular to crisis-related measures taken by companies with a strong market position in relation to suppliers and distributors: Review and document the admissibility of such measures under antitrust law in a self-assessment!

BEITEN BURKHARDT's antitrust lawyers also provide support for your company in the corona crisis. Please contact Dr Christian Heinichen or Christoph Heinrich.

Further support is available here in the "Corona Informationscenter" of BEITEN BURKHARDT.