The COVID-19 outbreak also affects the application of competition legislation. Companies are permitted to make extraordinary co-operative arrangements for the purpose of, for example, safeguarding the supply of personal protective equipment (PPE) and medicines. In addition to this, public buyers may obtain necessary supplies as direct award contracts in emergency situations. The European Commission has also instituted policies in its Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, and provisions on competition neutrality given in the Finnish Competition Act do not apply to this type of aid.
On 8 April 2020, the European Commission announced that competition law does not prevent co-operative arrangements in which, for example, health care companies (e.g. pharmaceutical and PPE manufacturers) work to ensure the adequate availability and effective distribution of supplies, medicines and services. When there is explosive growth in the demand for, among other things, PPE and certain medicines due to the COVID-19 outbreak, co-operative arrangements between competitors may be necessary in order to increase production capacity. The purpose of the Commission’s Framework Communication is to provide companies with guidelines on the assessing co-operative arrangements and clarify the Commission’s enforcement priorities.
The Finnish Competition and Consumer Authority (FCCA) is also applying the Competition Act in accordance with the policies given in the Commission’s Framework Communication. In uncertain situations, companies may also directly contact the FCCA for advice. However, during the pandemic, the FCCA will also harshly deal with any competitor arrangements whose purpose is to raise prices instead of safeguard essential production.
Direct award contracts may also be used for public procurement in emergency situations
With the explosive increase in demand, public buyers may also experience difficulties in obtaining essential supplies, such as PPE. In its Communication aimed at public buyers, the Commission encourages the use of expedited procurement procedures and states that, in cases of extreme urgency, public buyers can also use direct award contracts for certain procurements due to the crisis caused by the COVID-19 outbreak.
According to the Communication, public buyers will be given the necessary flexibility for purchasing supplies and services directly linked to the COVID-19 crisis as quickly as possible. If the criteria for direct award contracts in extremely urgent cases are met, public buyers are entitled to make procurements, if necessary, within a few days or even a few hours, without being subject to any procedural constraints stipulated in procurement legislation.
Temporary exceptions to State aid provisions affect the application of competition neutrality regulations
The European Commission has approved a Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak. These temporary State aid measures can be used to mitigate the shortage of liquidity suffered by undertakings and ensure that the disruptions caused by the pandemic do not compromise the viability of undertakings.
The Finnish Competition and Consumer Authority does not have any supervisory authority where State aid is concerned. Furthermore, the FCCA has no say regarding aid approved by the Commission as part of its State aid supervision. Consequently, competition neutrality regulations do not apply to aid which fulfils the criteria for temporary State aid measures.
Read the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak:
Commission press release (19 March) on the Temporary Framework for State aid measures
Commission press release (4 March) on extending the Temporary Framework for State aid measures