Joint Statement Issued by ECN On Application of Competition Law in the Context of the War in Ukraine

Overview


On March 21 2022, the European Competition Network (ECN), the network of authorities comprising the European Commission, the EFTA Surveillance Authority and the national competition authorities of all EU Member States (NCAs), issued a joint statement on the application of competition law in the context of the war in Ukraine (the Joint Statement).

In Depth


The Joint Statement starts off with reference to the European Council’s statement of February 24, 2022, and condemns “in the strongest possible terms” the unprecedented military aggression of Russia against Ukraine.

It then explains, as it did previously in its joint statement on the application of competition law during the COVID-19 crisis, that the different EU/EEA competition instruments have mechanisms in place to take into account market and economic developments where appropriate and necessary.

The Joint Statement goes on to reiterate that the objective of competition rules is to ensure a level playing field between companies, and states that “[t]his objective remains relevant also in a period when companies and the economy as a whole suffer from crisis conditions.”

That said, the ECN recognises that the extraordinary situation at hand may trigger the need for companies to address severe disruption caused by the impact of the war and/or sanctions in the Internal Market, by for example cooperating to:

  • ensure the purchase, supply and fair distribution of scarce products and inputs; or
  • mitigate severe economic consequences, including those arising from compliance with sanctions imposed by the European Union.

The ECN considers that, given the current circumstances, such cooperation would likely either not amount to a restriction of competition under Art. 101 TFEU / Art. 53 EEA, or would generate efficiencies that would most likely outweigh any such restriction.

The Joint Statement explicitly stipulates that “in the current circumstances, the ECN will not actively intervene against strictly necessary and temporary measures specifically targeted at avoiding the aforementioned severe disruptions caused by the impact of the war and/or of sanctions in the Internal Market.”

However, the Joint Statement also cautions that the current crisis is not to be used to undermine a competitive level playing field between companies and that the ECN will not hesitate to take action against companies taking advantage of the current situation by entering into cartels or abusing their dominant position in the market. It explicitly refers to the importance of ensuring that essential products (for example energy, food, raw materials) remain available at competitive prices.

The Joint Statement concludes with an invitation for companies to reach out the EC, the NCAs or the EFTA Surveillance Authority if they, following their self-assessment, still have doubts about the compatibility of their cooperation initiatives with EU/EEA competition law.

As you may recall, in the wake of the COVID-19 crisis, the ECN’s joint statement was followed up by a Communication from the European Commission setting out a “Temporary Framework for assessing antitrust issues related to business cooperation in response to situations of urgency stemming from the current COVID-19 outbreak”. It remains to be seen whether that will also be the case this time around. The State aid Temporary Framework to support the EU economy in the wake of Russia’s invasion of Ukraine is in any event forthcoming (see here for more information).

Watch this space.