The Italian Competition Authority approves a joint purchasing agreement of surgical masks via pharmacies and drugstores pursuant to its temporary rules on cooperation between companies during the COVID-19 pandemic

On 1 June 2020, the Italian Competition Authority ("ICA") approved a joint purchasing agreement of surgical masks via pharmacies/drugstores and a moratorium scheme on loan repayments agreed within ASSOFIN (the Italian Association of Consumer Credit and Mortgage Lending) pursuant to its temporary rules on cooperation among companies during the COVID-19 outbreak.

WHAT YOU NEED TO KNOW - KEY TAKEAWAYS

  • Companies are encouraged to seek guidance from the ICA in advance if they are considering cooperating with each other due to the impact of the COVID-19 outbreak.
  • Exemptions from the general prohibition on cooperation between competitors will only be approved where cooperation is necessary, temporary and proportionate.
  • The ICA has approved agreements between competitors concerning the supply of surgical masks and loan repayments, in each case after consulting the European Commission.

On 24 April 2020, the ICA adopted a communication on cooperation between competitors during the COVID-19 emergency situation (the "Communication"). The Communication mirrors to a large extent the guidance set out in the European Commission’s communication establishing a temporary framework for assessing antitrust issues related to business cooperation in response to situations of urgency stemming from the current COVID-19 outbreak (see our summary).

In essence, in some sectors cooperation in the supply of goods and services may be necessary during the COVID-19 emergency situation to overcome or mitigate the effects of the crisis. The Communication recognises, therefore, that certain forms of cooperation may be exempted from the general prohibition on anticompetitive agreements between competitors provided that the cooperation is temporary and does not go beyond what is strictly required to facilitate the supply of essential goods and services during the COVID-19 emergency situation.

There are four points to highlight:

  • exchange of commercially sensitive information between competitors remains forbidden;
  • the ICA has indicated that it will consider all queries it receives from companies about potential cooperation with competitors;
  • the ICA may provide further specific guidance in relation to the application of national competition law in comfort letters; and
  • the Communication stresses that it remains important to comply with the antitrust rules during the COVID-19 emergency situation, which the ICA will continue to enforce.

On 27 June, after consulting the European Commission, the ICA took its first two decisions applying the Communication. The first case concerned cooperation between competitors in connection with the distribution of surgical masks via pharmacies and drugstores. The second case concerned a common moratorium scheme for consumer credit reached by ASSOFIN.

The first cooperation scheme concerns the joint purchasing of surgical masks by the two main Italian associations of pharmaceutical distributors and their subsequent distribution among distributors at the unit purchase price negotiated with suppliers. Due to the exceptional health emergency and the limited duration of the agreement (until 30 June 2020), the ICA did not intervene, after concluding that the agreement was designed to manage an effective and homogeneous supply of essential personal protection devices throughout Italy.

In parallel, the ICA approved the common moratorium scheme agreed within ASSOFIN to delay the repayment of loans by consumers and companies that have been impacted by COVID-19 between 21 February and 30 June. The ICA also took into consideration the extraordinary emergency situation and the limited duration of the agreement, while stressing that companies adhering to the moratorium scheme must not directly or indirectly exchange commercially sensitive information. The ICA requested ASSOFIN to keep track of any exchanges of information that are deemed objectively necessary and proportionate to the achievement of the aims of the agreement, in case the ICA should request such information in the future.

As the ICA has made clear, companies should come forward if they are considering cooperating with a view to overcoming or mitigating the effects of the crisis on the supply of products or the provision of services to customers impacted by the pandemic. These first decision demonstrated the ICA’s willingness to approve solutions that are necessary, temporary and proportionate.

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Gabriele Accardo, Denis Fosselard, The Italian Competition Authority approves a joint purchasing agreement of surgical masks via pharmacies and drugstores pursuant to its temporary rules on cooperation between companies during the COVID-19 pandemic, 1 June 2020, e-Competitions Competition Law & Covid-19, Art. N° 96072

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