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COVID-19 and EU Competition Proceedings: Extraordinary Times Call for Extraordinary Measures

By Jacques Buhart, Wilko van Weert, Andrea Hamilton, David Henry & Philip Bentley on March 23, 2020
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In the midst of the ongoing global effort to mitigate the effects of COVID-19, the Directorate-General for Competition (DG Competition) of the European Commission (EC) and the EU courts are taking measures to prevent the spread of the virus among individuals whilst at the same time seeking to ensure that the EU economy remains as stable as possible. The situation remains highly fluid for the foreseeable future. Companies are therefore urged to stay abreast of the continually changing measures being taken.

WHAT HAPPENED

EC Staff working on “non-essential” projects are working remotely from home. However, officials who hold “critical” functions, such as the Commissioner, the Director-General and Heads of Unit, will generally be present at DG Competition, although working on a shift basis. In-person meetings will be replaced by video conferences going forward. DG Competition staff who are dealing with the provision of State aid exemptions during the crisis are being considered “critical”.

Merger Control

  • High-level meetings with executives and state-of-play meetings will likely be affected by the switch from in-person to video meetings.
  • A postponement of merger notifications, where possible, is encouraged. The rationale behind such measure is that the EC will clearly have difficulties within the statutory deadlines imposed by the EU Merger Regulation to elicit relevant information from third parties, such as customers, competitors and suppliers. In addition, the EC will likely face limitations in accessing information on a remote basis.
  • In terms of the practicalities pertaining to the filing/review procedure:
    • Hand deliveries at the Merger Registry are possible, but are currently discouraged.
    • DG Competition will temporarily accept submissions that are made only in digital format, either electronically by email to the Merger Registry or through the eTrustEx system with the delivery of paper originals to be arranged at a later stage.
    • Phase II Hearings will likely take place in person (although it is difficult to see how this can be reconciled with the ongoing measures to mitigate health and safety concerns)

State Aid

  • Measures designed to bail out companies that are heavily impacted by COVID-19 will likely receive swift State aid approval given the “exceptional circumstances” surrounding the grant of such aid. In particular, airlines, banks, companies active in the tourism industry and event organisers have been singled out as appropriate candidates for the expedient receipt of public support. The recent 24-hour EC approval of aid to Danish event organisers bears testimony to this possibility.
  • A dedicated hotline has been set up by DG Competition to efficiently deal with meeting the new swift State aid approval procedure
  • Where appropriate, DG Comp will make exceptions to the “one time last time” principle, pursuant to which a company cannot be a repeat beneficiary of aid within 10 years.

Court of Justice Judgments

  • Court of Justice of the EU (ECJ) hearings have been postponed. In particular, all ECJ hearings that were scheduled between 16 and 27 March are postponed, while all hearings in the General Court (GC) until 4 April are postponed.
  • The ECJ will still hand down the judgments scheduled for this week and next, on Thursday 19 March and Thursday 26 March. All scheduled GC judgments will be delivered on 26 March and 2 April.

 

WHAT THIS MEANS

  • Companies currently finalising negotiations on transactions are urged to bear in mind that the EC is currently strongly encouraging merger filings to be put on the back burner for the time being.
  • If a merger control filing is made, it cannot be ruled out that the EC will not be as swift as usual in giving its approval—although, of course, it will have to decide within the statutory deadlines imposed by the EU Merger Regulation. It is noted, however, that the EC may make increased use of the “stop-the-clock” mechanism to push back these deadlines. Corporate documentation imposing deadlines for completion may therefore have to be amended.
  • Companies severely impacted by COVID-19 are encouraged to contact legal counsel with a view to assessing whether they can benefit from a swift financial bailout. This applies particularly to airlines, banks, hotels, etc., and event organisers affected by unforeseen cancellations.
  • Companies eagerly awaiting judgment in cases in which they are involved will have to sit tight. These include appeals regarding antitrust fines imposed by the EC, as well as challenges by third parties against EC merger approval decisions.
  • With non-essential travel discouraged, it remains to be seen what impact the new EC measures will have on cartel dawn-raids.
Photo of Jacques Buhart Jacques Buhart

Jacques Buhart focuses his practice on cross-border mergers and acquisitions and EU/French competition investigations and litigation out of Brussels and Paris. Jacques has also developed substantial knowledge of various industries, including nuclear, telecommunications, pharmaceutical, paper and energy. He is head of the Firm’s…

Jacques Buhart focuses his practice on cross-border mergers and acquisitions and EU/French competition investigations and litigation out of Brussels and Paris. Jacques has also developed substantial knowledge of various industries, including nuclear, telecommunications, pharmaceutical, paper and energy. He is head of the Firm’s Paris and Brussels offices. Read Jacques Buhart’s full bio.

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Photo of Wilko van Weert Wilko van Weert

Wilko van Weert focuses his practice on EU competition law. He has provided first-class advocacy to corporate clients involved in high-profile international cartel investigations. He has delivered convincing cartel defense analysis and persuasive and vigorous representation of clients’ interests before the European Union’s…

Wilko van Weert focuses his practice on EU competition law. He has provided first-class advocacy to corporate clients involved in high-profile international cartel investigations. He has delivered convincing cartel defense analysis and persuasive and vigorous representation of clients’ interests before the European Union’s enforcement agencies and judiciary. Read Wilko van Weert’s full bio.

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Photo of Andrea Hamilton Andrea Hamilton

Andrea L. Hamilton draws on experience from both sides of the Atlantic and focuses her practice on EU and international merger control investigations as well as non-merger conduct investigations and antitrust litigation. She regularly represents clients before the European Commission, European courts and…

Andrea L. Hamilton draws on experience from both sides of the Atlantic and focuses her practice on EU and international merger control investigations as well as non-merger conduct investigations and antitrust litigation. She regularly represents clients before the European Commission, European courts and national competition authorities and also coordinates global investigations. Read Andrea Hamilton’s full bio.

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Photo of David Henry David Henry

David Henry is a practising UK barrister, whose practice focuses on European competition law, including merger control, cartels and abuse of dominance, and the interaction between antitrust and intellectual property. He represents companies and trade associations in the aluminium, air transport, car parts…

David Henry is a practising UK barrister, whose practice focuses on European competition law, including merger control, cartels and abuse of dominance, and the interaction between antitrust and intellectual property. He represents companies and trade associations in the aluminium, air transport, car parts, chemicals, electronics, medical devices, pharmaceuticals, power generation, food retailing and financial services and payment systems sectors. He also advises clients in proceedings before the European courts and national competition authorities. David also has considerable experience in export control matters, dispute resolution and white-collar crime. Read David Henry’s full bio.

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Photo of Philip Bentley Philip Bentley

Philip Bentley focuses his practice principally on EU antitrust and EU anti-dumping, and also extends to related matters such as state aid, subsidies, customs, marketing authorizations (notably for genetically modified organisms (GMOs)) and judicial review litigation before the EU General Court and Court…

Philip Bentley focuses his practice principally on EU antitrust and EU anti-dumping, and also extends to related matters such as state aid, subsidies, customs, marketing authorizations (notably for genetically modified organisms (GMOs)) and judicial review litigation before the EU General Court and Court of Justice. Read Philip Bentley, QC’s full bio.

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  • Posted in:
    Corporate & Commercial
  • Blog:
    Antitrust Alert
  • Organization:
    McDermott Will & Emery
  • Article: View Original Source

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