The UK Government passed emergency legislation to amend UK competition law on 27th March 2020 to help healthcare, grocery and ferry companies maintain the provision of essential goods or services to meet the challenges of the COVID-19 outbreak. The emergency legislation was in the form of three Orders which excluded certain activities from the provisions of the Chapter I prohibition under the Competition Act 1998.
The Chapter I prohibition prohibits agreements or arrangements between businesses which prevent distort or restrict competition in the UK. However the Secretary of State has powers under paragraph 7 of Schedule 3 of the Competition Act 1998 to exclude certain categories of agreements due to exceptional and compelling reasons of public policy namely in this case issues arising from the COVID-19 Emergency.
The Orders were as follows:-
–The Competition Act 1998 (Health Services for Patients in England) (Coronavirus) (Public Policy Exclusion) Order 2020 (SI 2020/368). This Order excludes certain agreements relating to information sharing, staff sharing and deployment, joint purchasing, sharing facilities and division of activities between independent healthcare providers and between independent healthcare providers and NHS bodies from the Chapter I prohibition of the Competition Act. This will allow health care companies to ensure the continuity of supply of essential healthcare products and services to the NHS as it battles the COVID-19 pandemic
–The Competition Act 1998 (Groceries) (Coronavirus) (Public Policy Exclusion) Order 2020 (SI 2020/369). This Order excludes from the Chapter I prohibition certain agreements relating, to the co-ordination about quantities and range of groceries, staff deployment, stock levels, store opening hours and supply of goods to vulnerable customers between grocery suppliers and certain agreements relating to sharing information on staff availability, storage capacity and vehicles and co-ordination of staff deployment between logistic service providers to ensure continuity of food deliveries.
–The Competition Act 1998 (Solent Maritime Crossings) (Coronavirus) (Public Policy Exclusion) Order 2020 (SI 2020/370). The third order is more specialist and more narrowly focused in nature and is aimed at providing extra flexibility for operators of ferry services between the Isle of Wight and mainland UK in relation to agreements over the co-ordination of timetables, routes and the deployment of staff and vessels between the operators of ferry services between the Isle and Wight and the UK mainland. The Order excludes the application of the Chapter I prohibition of the Competition Act 1998 to such agreements.
The exclusions from the Chapter I prohibition are backdated to apply to agreements relating to relevant activities from 1 March 2020 in relation to health services and groceries, and 16 March 2020 for Solent crossings, until a date to be notified by the Secretary of State.
However to comply with the safe harbour from the Competition Act 1998 the agreements covered by the Orders have to be notified to the Secretary of State within 14 days. In the case of agreements predating the date of the relevant Orders the 14 day notification period commences from the date of the Orders (27th March). In respect of agreements made after the Orders come into effect the 14 day notification period runs from the date of the Agreement.
The Orders also provide that the Secretary of State will maintain a register of such agreements. This is rather reminiscent of the regime under the old Restrictive Trade Practices Act 1976 which mandated the registration of restrictive agreements.
Whilst the Orders are to be welcomed in that they permit extra flexibility to the providers of essential goods and services in the time of national crisis it should be noted that the exclusions are narrow in their application. They only apply to activities undertaken in relation to the coronavirus response. Any form of information sharing in relation to costs and pricing between businesses is expressly excluded.
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