The COVID-19 crisis is the type of economic shock that is bound to increase companies' risk of civil class action antitrust litigation for years, in some cases even decades, to come. Companies across the globe are still defending themselves from the onslaught of civil conspiracy antitrust claims that followed right after the Great Recession. During the Great Recession, companies often had to change business strategies in order to respond to a changed economy, for example, by reducing output so as to respond effectively to the decreased consumer demands. The business reasons for such decisions seemed obvious at the time of the Recession - so obvious that the companies did not always document those. However, not surprisingly, companies that made similar products also reacted to the Great Recession similarly, just as we all humans decide independently to use umbrellas while walking through the rain.
Later, various industries around the world - particularly those with commodity-like products - faced class action, antitrust litigations claiming that such companies' decisions to reduce output during the Great Recession were not made unilaterally, but instead, were the product of illegal conspiracies so as to reduce competition. Long story short, it was alleged that companies agreed to use umbrellas while walking in the rain. Despite the obvious underlying and fundamental dis-logic of such cases, many courts typically did not immediately dismiss them, which has resulted in years of costs and disruption for companies that were simply trying to run their businesses as profitably as possible in the wake of an economic disruption and turmoil.
COVID-19 is likely to be no different. Companies across countless industries would be required to modify their businesses and its strategies as they navigate the economic effects of the present pandemic. For a few, it would/may mean reducing output and employee compensation. For others, it may just mean and require focusing on retail rather than the distributor channels.
Considering the present circumstances, the Governments around the globe have released various Support Schemes to protect the citizens generally, as also various industries, the economy, the employers and the employees. Please read here our detailed article on various Government Support Schemes announced in the wake of COVID-19 pandemic.
Additionally, most of the Nations globally, have announced various exemptions and guidelines under the Antitrust law.
Originally published May 07, 2020
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