The European Commission’s comfort letters: an adaptation of EU competition law?
The COVID-19 pandemic has forced individuals, businesses and organisations to adapt at a pace no one would have ever imagined possible. EU competition law is no exception. In response to calls for the relaxation of competition law to help businesses cooperate to deal with the outbreak, the European Commission revived the concept of comfort letters confirming compliance with competition law rules to provide enhanced specific guidance to the health sector.
Could this be a permanent shift in the Commission’s approach?
The self-assessment framework
The Commission had a toolkit in place to address situations that give rise to genuine uncertainty as to compliance with the provisions of Article 101 TFEU which agreements restricting competition, subject to specific exemptions. As a rule, since the entry into force of Regulation 1/2003 in May 2004, undertakings can no longer notify agreements to the European Commission to seek an official individual exemption and confirmation that the exemptions criteria laid out in Article 101(3) TFEU are met. Undertakings have full responsibility to conduct their own self-assessment and whether efficiencies and consumer benefits outweigh any restriction on competition. The Commission had however published a Notice regarding information guidance for cases giving rise to a real uncertainty in case of novel or unresolved questions, though it seems that no such guidance letters were issued. With its Article 10, Regulation 1/2003 also introduced a further type of procedure: the power, on the Commission’s own initiative, to adopt decisions finding that an agreement or practice does not infringe Article 101 or 102 TFEU, should the EU public interest so require.
To say the least, the COVID-19 outbreak brought its fair share of challenges and uncertainties: the shortage of supply of essential products and race to find and produce vaccines have been topical issues over the past year, and cooperation has been a central element of the response. This cooperation has given rise, as a consequence, to questions relating to compliance with the principles laid out in Article 101 TFEU.
The return of individual exemptions in times of crisis?
Interestingly, confronted with this urgent need for cooperation, the Commission did not choose to issue informal guidance or adopt an Article 10 decision – possibly because the questions of competition law themselves were not new or uncertain, but rather because the actual challenges were.
Instead, the Commission published a Temporary Framework Communication setting out the main criteria that the Commission would follow when assessing cooperation projects aimed at addressing a shortage of supply of essential products and services during the coronavirus outbreak, but also (re)introduced the possibility of providing companies with written comfort on specific cooperation projects falling within the scope of the Temporary Framework. So far, the Commission has issued two ad hoc comfort letters.
The first comfort letter was issued at the same time as the Temporary Framework Communication and addressed to “Medicines for Europe” in relation to an agreement designed to facilitate cooperation in increasing the supply and improving the distribution of medicines. The Commission indicated that the contemplated cooperation did not raise concerns under Article 101, in circumstances where the Commission itself requested the cooperation and would have a steering role in the process.
The Commission issued a second further comfort letter on 26 March 2021, relating to the organisation of an online professional ‘Matchmaking event’ forum designed to address bottlenecks in current production of COVID-19 vaccines and accelerate the use of additional available capacities across Europe by facilitating exchanges between participants, including direct competitors. The comfort sought by the organisers related to both the organisation of the event itself (as facilitator) and the contacts and exchanges that would take place between participants during that event, given these would not been controlled or monitored.
In both letters, the Commission stated that the cooperation was necessary and could be implemented using certain safeguards, while making clear however that such cooperation should not cover any price-related discussion or be used as a ‘cover’ to increase prices. As a rule, the exchange of confidential business information should be limited to what was indispensable, and participating companies should keep a complete audit trail of the discussions and agreements entered into.
The forms of cooperation differed: the “Medicines for Europe” project was implemented under the steer of the Commission, whilst the recent ‘Matchmaking Event’ was specifically designed to allow discussions to take place between competitors in the strictest confidentiality. The comfort letter for the latter went further, listing those topics that should not be discussed regarding competing products. This letter also explicitly flags that, to the extent competitors consider necessary to exchange confidential business information relating to competing products in order to find solutions for scaling up production or supply, they should contact the Commission for specific guidance ahead of any exchange.
Further needs for guidance or non-infringement decisions?
The Commission Temporary Framework was designed as a reaction to an unprecedented situation, but it shows how swiftly the Commission is able to adapt in the context of the EU’s public interest and could extend this out further. Addressing the current health crisis is obviously of the utmost priority, but could the Commission’s response shape future thinking on competition law and other aspects of the EU public interest, for instance in the topical context of the European Green Deal and sustainability goals? It will be interesting to see.
 Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ L 1, 4.1.2003
 Commission Notice on informal guidance relating to novel questions concerning Article 81 and 82 of the EC Treaty that arise in individual cases (guidance letters), OJ  C 101/78
 Ten Years of Antitrust Enforcement under Regulation 1/2003 SWD(2014) 230/2, paragraph 193, footnote 274.
 Communication from the Commission - Temporary Framework for assessing antitrust issues related to business cooperation in response to situations of urgency stemming from the current COVID-19 outbreak (2020/C 116 I/02)