As businesses and enterprises face a severe crisis amid the coronavirus pandemic, industry body CII has cautioned that although tough times may prompt companies to collaborate with their competitors, they must take decisions and operate as per the anti-trust law and the Competition Act of 2002.
In its competition law compliance manual for corporates in the wake of novel coronavirus, CII noted that the Competition Commission of India (CCI) would keep a close watch for any potential competition law infringement during this period.
“The current COVID-19 crisis has created unprecedented challenges in India and across the world. This impact of COVID-19 on the functioning of the economy may prompt companies to collaborate with their competitors to tackle the uncertainty and hardship faced. However, companies must note that antitrust laws continue to apply and all business decisions undertaken by companies must not fall foul of the provisions of Competition Act, 2002,” said the industry manual.
It said that companies must carefully evaluate their business operations during the COVID-19 period, especially if their business operations might require close collaboration with competitors.
“The concrete antitrust risks surrounding any such collaboration remain difficult to assess. Given the absence of any guidance from the CCI, companies should tread with caution and consult their antitrust lawyers as and when required or while exploring any collaboration,” the CII manual said.
It said that companies should reach out to their external counsel to assess these risks and must avoid information exchanges through trade associations or any other platforms.
It said that while entering into any form of collaboration, companies should take care that the collaborative efforts must be limited to products or services directly affected by the pandemic or the exigency measures.
“Particularly, pharmaceutical companies should limit their collaborations on R&D to anti-COVID-19 vaccines and should not, in its garb, collude on other drugs,” it said.
All negotiations and internal discussions must be documented by companies and all collaboration arrangements must be reviewed beforehand by external legal counsel for any risks of contravening competition law principles and only pursuant to this review, should they be implemented, according to the CII manual among other suggestions.
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