Governments in developed countries have responded to the COVID-19 pandemic with an almost unprecedented level of government support, thereby preserving many firms and jobs. However, this government support will be progressively withdrawn, and coupled with recent, and expected further, increases in interest rates and the market impacts associated with changes in consumers’ and firms’ behaviour, there is likely to be restructuring in many sectors. This raises the public policy question as to the appropriate balance between government support facilitating and ameliorating this restructuring and the role played by merger control, including how the COVID-19 pandemic and its aftermath affects the application of the so-called ‘failing’ or ‘exiting’ firm defence or scenario under UK and EU merger control.
To consider these questions, along with two of our turnaround and restructuring experts (John Bruce and Gemma Smith), we have written an article in the latest issue in the Competition Law Journal that addresses the policy considerations underpinning the failing firm defence under UK and EU merger control; describes the extensive government support and State aid provided in the UK in response to COVID-19 and the impact of COVID-19 on various sectors; and provides an overview of the evidence required for the ‘failing firm defence’, given these policy and factual considerations.
The article is published in issue 1/2022 of the Competition Law Journal, published by Edward Elgar Publishing