The Failing Firm Defense in Times of (the COVID-19) Crisis: Is It Worth Revisiting?

The recent COVID-19 pandemic has affected all areas of economic activity and competition law was not spared. Regulators around the world had to deal with the situation of the crisis from administrative-type issues (teleworking including for hearings, submissions etc.) to how to apply substantive competition law in times of crisis. In this article we revisit the FFD in light of the COVID-19 crisis. We focus on the analysis undertaken by the UK Competition and Markets Authority in a string of recent cases (including Amazon/Deliveroo). We conclude – once more – that, while regulators will be receptive to FFD arguments, they are unlikely to relax their rules. Evidence will remain key. However, we also argue that regulators including the Commission could make greater use of a wider counterfactual scenario (beyond FFD) and look at changes that are likely to take place in the market conditions in the medium and longer term due to COVID-19.

By Kyriakos Fountoukakos, Clémence Barraud, & Daniel Barrio¹

I. INTRODUCTION

The recent COVID-19 pandemic has affected all areas of economic activity and competition law was not spared. Regulators around the world had to deal with this crisis from administrative-type issues (teleworking including for hearings, submissions, etc.) to how to apply substantive competition law in times of crisis. In Europe, the European Commission (“Commission”) reacted very swiftly and made use of all the legal instruments in its armory to e