A recent online matchmaking event held under the auspices of the European Commission serves as a useful reminder of some basic compliance rules relating to the exchange of commercial information between competitors.
“The Matchmaking Event – Towards COVID-19 vaccines upscale production” (the Matchmaking Event) took place on 29-31 March 2021, bringing together companies with production capacities, manufacturers of key inputs for COVID-19 vaccines and developers and manufacturers of COVID-19 vaccines, seeking to match demand for potentially scarce inputs with supply. Participating companies were able to schedule numerous meetings online and discuss new collaboration opportunities and possible partnerships linked to the production and supply of COVID-19 vaccines.
Participants included companies operating at different levels of the supply chain as well as direct competitors, creating the risk of exchanges of confidential commercial information between them in the context of their discussions on potential collaboration. Such exchanges can be problematic under the EU competition rules. Therefore, the organisers of the event took the precaution of seeking guidance and comfort from the Commission concerning the compliance of the Matchmaking Event with the EU competition rules.
Companies are normally themselves responsible for assessing the legality of their agreements and practices under the competition rules, but the Commission has set up a temporary process whereby it will exceptionally provide ad hoc written comfort to undertakings in relation to specific and well-defined cooperation projects, aimed at addressing the shortage of essential products during the COVID-19 pandemic.1 The Commission has also clarified in this context that exchanges of commercially sensitive information will not be problematic under EU competition law if they are temporary and objectively necessary to address a shortage of products to treat COVID-19 and do not exceed what is strictly necessary to address the shortage of supply.
Specific safeguards put in place at the Matchmaking Event
In order to grant comfort to the organisers of the Matchmaking Event, the Commission required that the following safeguards be put in place:
- in relation to matchmaking meetings between any companies (regardless of whether they are competitors or active at different levels of the supply chain), any exchange of confidential business information will be limited to what is indispensable for effectively resolving the supply challenges linked to COVID-19 pandemic;
- in relation to any matchmaking meetings between direct competitors:
- companies will not share any confidential business information regarding their competing products, in particular information relating to prices, discounts, costs, sales, commercial strategies, expansion plans and investments, customer lists, etc.; and
- direct competitors will keep a record of which topics they discussed.
- If direct competitors considered that exchanging confidential business information in relation to competing products was indispensable to finding solutions for scaling-up production or supply of COVID-19 vaccines, they were invited to contact the Commission for specific guidance at least 24 hours before engaging in any such exchange.
- The organisers of the Matchmaking Event were required to keep a record of which companies met during the event and to make it available to the Commission upon request.
Limitations on the comfort letter
The comfort letter does not cover any discussion of prices between direct competitors or any other possible cooperation between them (other than exchanging non-confidential information in the context of the Matchmaking Event).
The comfort letter also does not apply to any subsequent cooperation between non-competitors attending the Matchmaking Event, for which the companies remain responsible to self-assess the compatibility with EU competition law.
With these safeguards and limits in place, the Commission confirmed that the cooperation of participating companies in the context of the Matchmaking Event, in particular by exchanging relevant commercial information, did not raise concerns under Article 101 TFEU.2
This is the second time that the European Commission has issued a comfort letter in the context of the COVID-19 crisis.3
It is a good demonstration of the Commission’s willingness to assist with the implementation of legitimate and strategic projects aimed at tackling the COVID-19 pandemic, but it also serves as a useful reminder of the practical safeguards that should always be in place when companies, and in particular competing companies, meet to discuss legitimate cooperation projects.
These safeguards include:
- Keeping a list of participants and identifying which participants are competitors.
- Limiting the participants to those who are reasonably necessary for the discussions.
- Ensuring that there is a legitimate written agenda for the discussions prior to the meeting and sticking to it.
- Ensuring that the agenda is approved by in-house or external legal counsel.
- Keeping accurate minutes of the meeting and the topics discussed at the meeting.
- Before exchanging any confidential information, considering the justification for such exchange and ensuring it is both necessary and specific to the potential collaboration.
- Only providing information reasonably necessary for the evaluation of the collaboration.
- Avoiding or severely limiting the exchange of competitive sensitive information, in particular intended future prices.