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Some Crisis Impacts in Antitrust Will Reverberate

 |  May 11, 2020

By Eleanor Tyler, Bloomberg

Antitrust regulators adjusted quickly to the Covid-19 crisis and attendant economic disruption.

In general, competition authorities worldwide have been both flexible and resolute: flexible in suspending or bending rules to permit governments and businesses to pivot and meet challenges, and resolute in ensuring that any anticompetitive behavior undertaken during the crisis won’t get a pass once the dust settles.

Some of the issues coming into focus will consume a lot of minds and legal dollars for the next year (or several) while we figure out which parts of the changes wrought by the crisis are temporary and which ones will initiate long-term resets.

Below are a few candidates for longer-term change to competition regulation as a result of the crisis, and some effects we’ll probably be seeing for years to come.

Digital Filing

Most antitrust regulators are still open for business, despite their entire staffs working from home. For regulators that avoided digital filings and communication, this has been a big shift. And digital filing is the best candidate for long-term change from the crisis. A lot of regulators have, out of necessity, overcome systemic problems and prejudices about digital filing and may adopt these methods more broadly after the crisis passes.

That kind of shift could improve access for distant businesses, and may make it easier for international firms of all kinds to manage these processes across borders.

EU State Aid Shift

To build vibrant, integrated markets, European Union member states needed to allow companies to compete on even footing, as opposed to subsidizing a preferred winner. Therefore, the EU has worked to make sure that incumbent state industries and local favorites didn’t hold onto market power through state aid.

But the crisis has required a massive government response to keep industries afloat and people employed, so the EU has been speedy in reviewing and approving schemes to do that at the national level.

The questions of how and when supports are removed, where to permit companies—or even industries—to fold, and what will replace them are going to consume a lot of effort. The shift away from a recent focus on tax schemes that favor specific businesses and toward reviewing the flood of public money into a broad array of industries could force a change in how the EU competition commission allocates people and money.

This issue will be complex for years to come. And U.S. businesses competing with European businesses will face very different market circumstances, with longer-term consequences.

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