Corona Crisis Cartels: Sense and Sensibility

By Maarten Pieter Schinkel & Abel d’Ailly (University of Amsterdam)

Western competition authorities responded quick and united to the COVID-19 pandemic with a generous exemption from cartel law for any companies that aim to solve pressing scarcities in anticompetitive collaboration. However there is little reason to expect more supply, fair distribution, low prices or wider use of personal protective equipment from horizontal collaboration. The agencies should better have stood by competition instead. Embracing the policy might have been about public image, more than high expectations of collaboration amongst rivals contributing to solving the needs associated with COVID-19. That experimental treatment is not without side effects. By relaxing the first article of antitrust, the agencies undermined their authority, just when we need them to effectively control the many markets that are rapidly consolidating, due to the consequences of the lock-downs.

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