COVID-19: UK Temporarily Relaxes Antitrust Rules to Allow Supermarkets to Collaborate

March 20, 2020

The UK government announced on March 19 that as part of a package of measures to allow supermarkets to work together to feed the nation during the coronavirus (COVID-19) outbreak, elements of competition law will be temporarily relaxed for the food sector. Authorities, however, stressed that they will remain vigilant against competition law infringements.

The move will allow retailers to share data with each other on stock levels, cooperate to keep shops open, and to share distribution depots and delivery vans. It will also allow retailers to pool staff with one another to help meet demand.

Chapter I of the UK Competition Act 1998 (CA98) prohibits arrangements between businesses that have as their object or effect the restriction, distortion, or prevention of competition within the United Kingdom and, among others, can give rise to fines of up to 10% of the infringing firms’ worldwide turnover. Following the UK government’s announcement, legislation will follow shortly to amend elements of the CA98 in order to enable the temporary relaxation of antitrust rules.

The Competition and Markets Authority (CMA), the UK antitrust agency, issued a statement welcoming this announcement. The CMA offered reassurance that, where agreements are not covered by that legal relaxation, "the CMA has no intention of taking competition law enforcement action against cooperation between businesses or rationing of products to the extent that this is necessary to protect consumers – for example, by ensuring security of supplies." The CMA warned, however, that the CMA’s assurance cannot protect against competition litigation by private parties.

However, the CMA stated that it will not tolerate unscrupulous businesses exploiting the crisis as a "cover" for nonessential collusion, including exchanging information on longer-term pricing or business strategies, where this is not necessary to meet the needs of the current situation.

At the same time, the CMA made clear that it will keep vigilant and it may seek more legal powers, on an emergency basis, to tackle competition law infringements by companies during the coronavirus pandemic. On March 20, the CMA announced that it is launching a taskforce to monitor and enforce against practices such as excessive pricing or misleading marketing of products during this period.


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