Additional Guidance for Businesses on Competitor Collaboration During COVID-19 Pandemic

The Competition Bureau (Bureau) has issued a statement directed at businesses that are considering collaborating with competitors during the COVID-19 pandemic, providing additional enforcement guidance[1] and a process for obtaining collaboration-specific guidance from the Bureau.

KEY TAKEAWAYS

• The Bureau will generally refrain from scrutinizing competitor collaborations aimed at responding to COVID-19 issues provided they are limited in duration and scope, undertaken in good faith and do not go beyond what is needed.        

• The Bureau has set up a team to assess proposed competitor collaborations and assist the Commissioner of Competition (Commissioner) in providing parties with “informal guidance.”

• Parties seeking the Bureau’s informal guidance will be required to submit certain information, and any guidance will be time limited and need to be revisited after an initial period.

NEW GUIDANCE

In an April 8, 2020, statement, the Bureau recognized the exceptionally challenging circumstances that Canadian businesses are facing and acknowledged that collaborations among competitors may help businesses ensure Canadians are able to access products and services that are “critical” to them, such as the “necessities of life.”

In light of these challenging circumstances, the Bureau stated it will generally refrain from scrutinizing competitor collaborations of a limited duration and scope during the COVID-19 crisis, “where there is a clear imperative for companies to be collaborating in the short-term to respond to the crisis, where those collaborations are undertaken and executed in good faith and do not go further than what is needed.”

To assist businesses that wish to obtain greater legal certainty or additional guidance from the Bureau before collaborating with competitors, the Bureau has created a team to assess proposed collaborations and assist the Commissioner in providing parties with informal guidance. Businesses wishing to obtain this guidance are required to provide certain information regarding the proposed collaboration, including how the collaboration is intended to achieve a COVID-19 related objective in the public interest, why it is necessary and any guidance received from other government authorities.

Any informal guidance provided by the Bureau will be time limited and could be made public to support transparency. At the end of the time period to which the guidance applies, the parties would be expected to terminate the collaboration.

The Bureau’s statement reiterates that Canada’s competition laws continue to apply during the COVID-19 pandemic. Competitor communications and collaborations raise significant competition law risk and must be carefully managed.

If you have any questions, please do not hesitate to contact your usual Blakes contact or any member of the Blakes Competition, Antitrust & Foreign Investment group.

Please visit our COVID-19 Resource Centre to learn more about how COVID-19 may impact your business.