State aid and competition has been saved
State aid and competition
The fight against COVID-19
As the impact of COVID-19 continues to grow, so do the measures implemented by the government to support businesses through the crisis, and competitors may be required to co-operate more closely to meet surging demand for scarce products or services. Deloitte helps its clients navigate the available state aid and respect competition law.
The European Commission and all member states, at all levels of government, are looking for ways to help companies to respond, recover, and ultimately thrive in the wake of COVID-19. However, all this support (government loans, guarantees, direct or indirect subsidies, foregoing or deferring tax payments, etc.) must be legal state aid. If it is illegal state aid, the beneficiary will have to refund the state aid with interest.
Deloitte has assisted companies and governments with the European Commission’s COVID-19 state aid rules. We also help companies assess whether the aid that is on offer is legal state aid to avoid refunds. We work together with companies to identify potential for new government support that meets their needs, and assist governments in having new support measures (new legislation, individual aid decisions, etc.) approved by the European Commission.
There is no doubt that state aid and cooperation among businesses are crucial to mitigate the negative economic and social consequences of the crisis. Understanding the rules and regulations is essential for companies to benefit now and avoid fines in the future.
Working with competitors
Competition law prohibits agreements between competitors on prices, markets, customers, production quantities, capacity, etc. An infringement can be fined up to 10 percent of the global consolidated turnover of the company involved.
Specifically to combat shortages in COVID-19 related products, the competition authorities (European Commission and national authorities) allow under certain circumstances that competitors discuss prices, quantities, capacity, markets, etc.
Deloitte can assist companies in assessing whether they can co-operate and provide them legal certainty that they will not be fined later.