Saturday 23 March 2024

Amendments to Digital Markets, Competition and Consumer Bill to prevent acquisitions by foreign powers

 

Amendments to Digital Markets, Competition and Consumer Bill to prevent acquisitions by foreign powers

 

Amendments to the Digital Markets, Competition and Consumer Bill have been tabled, to amend the Enterprise Act 2002 to introduce a new regime for mergers involving newspaper enterprises and foreign powers.

Under the amendments, the Secretary of State must give the Competition and Markets Authority (CMA) a “foreign state intervention notice” if the Secretary of State has reasonable grounds for suspecting that it is or may be the case that a "foreign state newspaper merger situation" has been or will be created.

A foreign state newspaper merger situation will arise where as a result of two or more enterprises ceasing to be distinct, a foreign power is able to control or influence the policy of the person carrying on the newspaper enterprise, or is able to control or influence that policy to a greater extent. The turnover test is reduced to £2 million for such mergers.

The CMA must then report on whether such a merger situation has been or will be created. If it reports that this is the case, then the Secretary of State must make an order containing such provision as the Secretary of State considers reasonable and practicable for the purposes of reversing or preventing the creation of the identified foreign state newspaper merger situation.

 

The DMCC Bill is due to have its third reading in the House of Lords on 26 March 2024.

https://bills.parliament.uk/publications/54855/documents/4610

Wednesday 13 March 2024

CMA consults on market investigation into veterinary services for household pets

 

CMA consults on market investigation into veterinary services for household pets

The CMA is proposing to undertake a market investigation into the supply of veterinary services for household pets, including the supply of prescribed veterinary medicines.

This follows the CMA’s September 2023 consultation into the veterinary services market for household pets.  The consultation received an unprecedented level of responses tp its consultation.

The CMA found concerns that consumers may not be given enough information to enable them to choose the best veterinary practice or treatment.

The CMA has found that over 80% of veterinary practices have no pricing information on their websites, even for routine consultations or vaccines.

The CMA has found that while the Royal College of Veterinary Surgeons operates a voluntary standards scheme, around 30% of the market has not committed to this.

The CMA invites comments by 11 April 2024.

https://www.gov.uk/government/consultations/consultation-on-the-proposal-to-make-a-market-investigation-reference-into-veterinary-services-for-household-pets-in-the-uk

Saturday 2 March 2024

Ruling on permission to appeal approval of funding arrangements in collective proceedings against Mastercard and Visa

 


The Competition Appeal Tribunal (CAT) has granted an application by Mastercard and Visa for permission to appeal the CAT's judgment approving the funding arrangements for the applications for collective proceedings orders (CPOs) brought by Commercial and Interregional Card Claims I Limited (CICC I) and Commercial and Interregional Card Claims II Limited (CICC II), under section 47B of the Competition Act 1998.

The proposed class representatives (PCRs) have revised their CPO applications and funding arrangements in light of the Supreme Court's judgment in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28 (PACCAR).  Following PACCAR, the funding arrangements for large collective claims have been somewhat uncertain.

On 17 January 2024, the CAT rejected all of Mastercard and Visa’s arguments against the enforceability of the PCRs’ funding arrangements. The judgment emphasised a focus on the substance of funding arrangements as opposed to a blanket assertion of unenforceability regardless of funding arrangements or structure. This approach helps to reinforce the collective actions regime by allowing litigation funding – an essential component – to continue, without which, large claims against competition infringers would be impossible. The CAT accepted that the continuing uncertainty about these issues of funding enforceability arising in this and other cases before the CAT is unlikely to be resolved without determination of the issues by the Court of Appeal.

The CAT granted the applications for permission to appeal stating that it may be of assistance to the Court of Appeal to have a slightly different fact pattern to consider when resolving the points on appeal.

The ruling is timely following the panel discussion I participated in on 28 February 2024 at TL4’s Financial Services conference.

Commercial and Interregional Cards Claims I Limited v Mastercard Inc and others, Commercial and Interregional Cards Claims II Limited v Mastercard Inc and others, Commercial and Interregional Cards Claims I Limited v Visa Inc and Commercial and Interregional Cards Claims II Limited v Visa Inc [2024] CAT 16

Thursday 22 February 2024

Breach of Public Contracts Regulations not “sufficiently serious” to warrant damages under Francovich test

 


The Court of Appeal has held that a breach of the Public Contracts Regulations 2015 (SI 2015/102) that results in the wrong bidder being awarded a contract will not automatically constitute a "sufficiently serious" breach to warrant damages in accordance with Francovich v Italy (C-C/90) [1991] ECR 1-5357.

The claimant brought a claim against NHSE.  The High Court found that there was a manifest error by NHSE which, if it had not been made, would have resulted in the claimant winning the tender.  NHSE committed a single, inadvertent breach in an otherwise careful procurement exercise, which caused the wrong result.

In the absence of bad faith of the decision-maker, their "excusability" and state of mind were important factors in considering the "sufficiently serious" test.  The Court of Appeal ruled that a manifest error could be excusable, depending on the facts.

The judgment will be welcome to contracting authorities.  It settles and dismisses any assumption that a breach of procurement regulations resulting in an incorrect contract award will automatically be sufficiently serious to warrant an award of damages.  Aggrieved tenderers will find that the bar for raising a claim for damages is significantly raised.

This is the second case where a party has sought to argue that a particular type of breach or result automatically means that the "sufficiently serious" test is made out. The claimant and appellant attempted to do this (unsuccessfully) in Ocean Outdoor Ltd v Hammersmith and Fulham London Borough Council [2019] EWCA Civ 1642.

Braceurself Ltd v NHS England [2024] EWCA Civ 39

Wednesday 21 February 2024

CMA market study into infant formula

 


The CMA has announced a market study into infant formula and follow-on formula in the UK.

The CMA intends to use the market study to consider how the supply of formula has, or may have, adverse effects on consumers, and how it might work better.

In the market study, infant formula comprises infant and follow-on formula as defined by Commission Regulation 2016/127, and formulas labelled as foods for special medical purposes that can be sold without prescription under Regulation 2016/128.

The market study follows work that the CMA has conducted on the rising costs of living where its November 2023 report found that consumers are not always well-equipped to make informed choices for infant formula.  Danon had a 71% share in the UK infant formula market in 2023 and the penetration of own-label alternatives was found to be weak..

The CMA also proposes to consider the market for growing up and toddler milks marketed for children over 1 year old.

The deadline for responses is 13 March 2024.

The CMA must announce within six months if it is intending to make a market investigation reference and must publish its final report on the market study within 12 months. The CMA has indicated it intends to publish its final report in September 2024.

 

https://www.gov.uk/government/news/cma-to-scrutinise-infant-formula-market-through-a-market-study

Tuesday 6 February 2024

CAT rules on carriage dispute in collective proceedings against Amazon

 

CAT rules on carriage dispute in collective proceedings against Amazon

The Competition Appeal Tribunal (CAT) has determined the "carriage issue" in two applications to commence collective proceedings, under section 47B of the Competition Act 1998, against Amazon.

 The first application was brought by Ms Julie Hunter and the second by Mr Robert Hammond (each as the proposed class representatives).

The proposed proceedings would both combine standalone claims for damages caused by alleged breaches by Amazon of Article 102 of the TFEU (prior to 31 December 2020) and the Chapter II prohibition of the Competition Act 1998.

Each sets of proceedings allege abuse of a dominant position by Amazon in the market for intermediation services on online marketplaces through the operation of its "Fulfilled by Amazon" and "BuyBox" features.

The CAT ruled that it would not be able to certify both sets of proceedings due to the overlaps between them.  It decided which set of proceedings should be allowed to continue to a certification hearing as a separate provisional issue.

 The CAT concluded that Mr Hammond was most suitable to act as the proposed class representative. It considered that the methodology submitted by Mr Hammond's expert was preferable as it more closely aligned the counterfactual to the alleged abuse.

However, this may not be the final resolution of the matter.  The CAT decided that Ms Hunter's application should be stayed, rather than dismissed. It could still proceed to a certification hearing on the event that Mr Hammond's application for certification were to fail or, if granted, be revoked.  It may even be that the two class representatives might join forces in the future to allow claims to be brought by as wide a body of claimants as possible.

The CAT made no ruling on which class definition was more appropriate, finding that it is not an issue to be determined in a carriage dispute.

Julie Hunter v Amazon.com, Inc and others and Robert Hammond v Amazon.com, Inc and others [2024] CAT 8

Friday 26 January 2024

Need a pay rise? CMA publishes report on market power in labour markets

 Need a pay rise? CMA publishes report on market power in labour markets


The Competition and Markets Authority (CMA) has published its first report prepared by its Microeconomics Unit, on competition and market power in UK labour markets.
The report examines employer market power and concentration in the labour market. It considers the ability of a firm to pay its workers less than the value of their contribution to the value of the firm’s output.

The CMA finds that market concentration in the labour market has remained roughly constant over the last 20 years. On average, wages are 10% lower in the most concentrated markets, compared to the least.
The report also examines the increase in hybrid and flexible working and the increasing importance of the gig economy.

The report raises a number of unanswered questions which will no doubt inform analysis by policy makers:

·        What lies behind the geographical differences in labour market concentration?
·        How do mergers and acquisitions affect labour market concentration and wages in the UK?
·        What would the impact of changing labour market policies (for example, on non-compete agreements, pay setting and the minimum wage) be for worker mobility and wages?