The Competition Commission of India in its advisory dated 19th April 2020 has cautioned businesses to not take advantage of COVID-19 to contravene any provisions of the Competition Act.
Since COVID – 19 has caused disruptions in supply chains, including those of critical healthcare products and other essential commodities/ services and in order to cope with significant changes in supply and demand patterns arising out of this extraordinary situation, businesses may need to coordinate certain activities, by way of sharing data on stock levels, timings of operation, sharing of distribution network and infrastructure, etc. to ensure continued supply and fair distribution of products.
It is clarified that the Competition Act has in-built safeguards to protect businesses from sanctions for “certain coordinated conduct”, provided such arrangements result in increased efficiencies.
Section 3(3) of the Competition Act which presumes that certain concerted actions between competitors cause an appreciable adverse effect on competition. It is added that this presumption is not applicable to joint ventures if such agreements increase efficiency in production, supply, distribution, storage, acquisition or control of goods or provision of services.
Further, the CCI has cautioned businesses that only such conduct that is necessary and proportionate to address concerns arising from COVID-19 will be allowed. Businesses are not to not take advantage of COVID-19 to contravene any of the provisions of the Act.
Click here to read the Notification.
