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Lockdowns Stalled Antitrust Raids, Deal Probes, Regulators Say

Lockdowns Stalled Antitrust Raids, Deal Probes, Regulators Say

Antitrust investigations and merger reviews were hampered earlier this year as virus lockdowns left companies struggling to provide information and saw some beg for lower fines.

“What was difficult, it’s not a secret, were investigations, dawn raids” or surprise inspections to seize documents from companies involved in a probe, said Andreas Mundt, Germany’s antitrust chief, at a Berlin conference for European competition authorities. “It’s not so easy to go into a company in times of Covid-19, neither for us or for the company, by the way, for health reasons.”

Several European governments told people to work from home after a surge in coronavirus infections earlier this year, effectively shutting down much business activity and slowing antitrust enforcement. The European Commission asked companies to delay merger filings and focussed on checking a wave of virus state-aid payments.

Staff working from home found it difficult to answer requests for information from Germany’s Federal Cartel Office and the European Commission, according to Mundt and Olivier Guersent, the head of the EU’s antitrust arm.

Companies must comply with such requests, which can involve sending huge amounts of data on products and sales.

While EU regulators didn’t see “any real slowdown” in companies seeking approval for deals, longer probes did run into trouble as lockdowns made it difficult for companies “to answer complicated and voluminous requests for information,” Guersent said. At one point, all six of the EU’s in-depth merger probes were paused to seek data.

Regulators were also faced with pleas from companies to delays potential fines, Mundt said.

“Some companies came in and said ‘Listen, you cannot set a fine now,’” he said. “How do we deal with that, with the financial ability of companies in these times, in times of shortage of liquidity?”

Mundt said investigators have developed procedures for dawn raids within health guidelines, and have again started to focus on running probes.

“We can say today that we are ready to go out again,” he said.

©2020 Bloomberg L.P.