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Competition agencies around the globe have been responding in various ways to the COVID-19 pandemic and reviewing their approaches to dealing with the resulting economic fallout and its impact on competition. For example, many agencies have permitted coordination between suppliers of essential products, the European Commission has asked companies to delay filing merger notifications, and the Federal Trade Commission has emphasised the adequacy of existing laws to deal with the changed circumstances.

The “failing firm” justification for a merger is also under new consideration and scrutiny by regulators around the world. In their white paper, Managing Director James Mellsop, Associate Director Dr. Will Taylor, and Senior Consultant Kevin Counsell discuss the potential economic implications following a statement made by the Australian Competition and Consumer Commission intimating that any failing firm justification for a merger should rely on evidence beyond merely what is happening to cashflows during the pandemic.

The authors categorise the firms that might fail as a result of the pandemic into three groups, and offer valuable insights into the longer-term impacts on competition.