Competition in 'lockdown' after the attack of COVID-19 in Australia

22 Apr 2020

Jessica Apel  Jessica Apel, Lawyer, Ashurst Australia | Barbora Jedlickova  Barbora Jedlickova, Senior Lecturer

Jessica Apel and Barbora Jedlickova write about the impact of the COVID-19 lockdown on competition law and enforcement.

On February 25, 2020, the Australian Competition and Consumer Commission (“ACCC”) set its enforcement priorities for the year, as per usual, without any suspicion that the world was about to change with the COVID-19 outbreak and that, with this change, competition and the enforcement of its law would take a reverse path. Rather than “just” protecting competition, the current policy seeks to preserve businesses in order to introduce healthy competition once the outbreak is over. This is reflected in the unprecedented number of interim authorization the ACCC has granted in the last few weeks, allowing coordination between competitors for the period of the COVID-19 pandemic. This shift in policy and enforcement was confirmed directly by the ACCC’s media release on March 27, which also stressed that it “wants to ensure any changes to the competitive landscape now are temporary and that the ACCC is ready to play its role in supporting competition as the economy recovers.” What does this mean for its enforcement priorities and what else can we expect in the next few months and beyond?



While we can expect that some of the ACCC’s compliance and enforcement priorities will remain unchanged, the ACCC has indicated it will “re-focus … [its] efforts to those priorities of most relevance to competition and consumer issues arising from the impact of COVID 19.”  In this context, Rod Sims has made it clear that the ACCC will need to balance the objectives of: (a) implementing temporary measures to address short-term issues associated with COVID-19 and (b) ensuring that the long-term competitive structure of the economy is maintained. This mantra will call for Australia’s competition regulator to make careful decisions regarding its approach to enforcement in the coming months. The rhetoric of the ACCC to date is not, necessarily, as profound as the general statements made by other international regulators, such as the UK’s Competition and Markets Authority (“CMA”), which has issued guidance providing reassurance that, with regards to coordination between competitors:

provided that any such coordination is undertaken solely to address concerns arising from the current crisis and does not go further or last longer than what is necessary, the CMA will not take action against it.

It is unsurprising that the ACCC has stayed clear of similar statements of general forbearance, which arguably create further uncertainty for businesses as to the limits of the regulator’s blessing. Instead, recent practice shows that the ACCC has opted for granting individually tailored exceptions, where businesses apply for authorizations and notifications. While this method is more time- and resource-consuming than a general assurance may be, it provides better certainty to the concerned entities. Therefore, it is clear that the ACCC’s new focus on evaluating and granting individual exceptions arising from the COVID-19 pandemic takes away resources which would otherwise be used for matters arising from its newly set competition law enforcement priorities. Indeed, there appears to be an acknowledgement by the ACCC that a heavy regulatory burden is not in line with the current policy stream of preserving businesses and would not be borne well by businesses who are already feeling the pressure of this global crisis; this is likely to guide their enforcement priorities in the coming months.

Cartels and Anti-competitive Agreements

Cartels and anti-competitive agreements have been enduring priorities of the ACCC, with five criminal cartel cases currently before the court and an expectation that at least a further two cartel cases would be brought in 2020. Although the most serious forms of cartels, which criminal cartels are, will most likely remain on the ACCC’s current enforcement radar due to the ACCC’s pre-pandemic commitment to eradicating coordination from the economy, some less serious coordination will not be as urgently addressed. Some will even be allowed, with the ACCC’s current focus on authorizing coordination between competitors to respond to COVID-19, including the sharing of resources and information which would otherwise be prohibited by the Competition and Consumer Act 2010 (Cth) (“CCA”).

Read the full article in Competition Policy International.