First collective action launched in the CAT

The Competition Appeal Tribunal has published a notice of application to commence collective proceedings under the amended section 47B of the Competition Act 1998.  If the CAT decides to make a collective proceedings order (CPO) the case will be the first opt-out class action following the Consumer Rights Act reforms.  The proposed action combines follow-on damages actions relating to the 2014 mobility scooters decision of the Office of Fair Trading. 

The application is brought by the proposed class representative (Ms Dorothy Gibson), the General Secretary of the National Pensioners Convention that represents around 1000 UK pensioners’ organisations.  The relief sought is damages to be assessed on an aggregate basis.  The application states that the action should proceed on an opt-out basis as it would be highly impractical for it to proceed on an opt-in basis in view of the vulnerability of the members and the sums at stake.

The CAT may only make a CPO if it considers that the person who bought the proceedings is a person who the CAT could authorise to act as the representative and if the CAT considers that the claims raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings.

The procedural rules governing collective proceedings are set out in Rules 73-98 of the CAT Rules, with guidance in Section 6 of the 2015 Guide to Proceedings.

Case 1257/7/7/16 - Dorothy Gibson v Pride Mobility Products Limited

Microsoft and LinkedIn – A Complementary Combination?

Microsoft plans to acquire the largest professional networking business LinkedIn for US$26.2 billion representing the largest acquisition in its history.

Merger clearance is being sought in the USA, Canada and EU and a few other antitrust regimes, which has prompted commentators to speculate on the prospects for clearance.

There do not seem to be any significant horizontal overlaps.  Microsoft is not a major social media player and LinkedIn is not a provider of operating systems or business software.  Nor do there seem to be any obvious vertical issues.  You don’t need Windows to create an online social network and LinkedIn’s network is not a critical input for competitors to Microsoft’s software business.

The transaction has been hailed as a merger of complements.  LinkedIn gives Microsoft access to data in relation to a readymade network of users for Microsoft’s cloud-interoperable programs.  You can see how the deal would make Microsoft’s products more useful to the LinkedIn community because they would be able to share them with their connections.  It could serve as a counterbalance to cloud-based programs such as Google Docs that can benefit from an established network of users.

So, is there an antitrust problem if Microsoft acquires LinkedIn information on who you are connected with?  An obvious point is that merely having access to personal data - even vast amounts of it - is not to be equated with economic market power.   However, this has not stopped regulators on both sides of the Atlantic venturing theories on the competition law implications of ‘Big data’ and whether existing legal tools including merger control are adequate to address new situations.  The Microsoft-LinkedIn tie-up is of relatively limited interest when approached through the traditional antitrust toolkit.  It is hoped that the merger control authorities keep those principles firmly in sight when looking at the data aspects.

European Commission probes Romanian natural gas sector

The European Commission confirmed on 7 June that it has carried out dawn raids at the premises of Romanian natural gas companies on suspicion that they have engaged in anticompetitive practices that hinder natural gas exports to other member states and/or that they abused their dominant market position.

Few details are available of the scope of the investigation at this stage, although the Romanian state-owned company Transgaz has confirmed that was raided.  Natural gas producer OMV Petrom has also stated that it was subject to an inspection.

The raids are not the only ongoing investigation by the European Commission into natural gas exports.  In April last year the Commission issued a statement of objections to Gazprom alleging that it had hindered cross-border trade with eight other member states. The Commission maintains that Gazprom charged unfair prices and restricted its customers from selling gas outside their territory, as well as demanded concessions that did not properly relate to Gazprom’s transport infrastructure.  In September, Gazprom’s deputy chief executive reported that the company had submitted a proposed settlement to the Commission but the investigation has not reached a conclusion.

The latest raids in Romania show that Commission’s competition law interest in the energy sector has not waned but appears to have shifted eastwards as illustrated in cases involving Gazprom, CEZ, Bulgarian Energy and OPCOM.  In many respects the lines of inquiry pursued in these cases resemble those in other post-sector inquiry probes.  However, one particular line of inquiry that is unprecedented in the Gazprom case is the allegation that it is abusive for a dominant company to insist on prices that are indexed to oil prices.  It is not clear whether that allegation is being pursued in the Romanian case.  Since the majority of these energy sector competition cases have been resolved using commitments, their precedent value is likely to be more limited.  Until they are challenged successfully before the EU Courts, the case law experience is likely to give further impetus to investigations at EU and national level as well as private law challenges on the back of similar theories of alleged harm.