EU proposal to regulate online platforms

DG Connect has launched a consultation on its proposal to regulate online platforms.

DG Connect has set out three options to regulate digital platforms.  The lightest touch approach would be EU ‘soft law’ designed to incentivise industry-led initiatives such as voluntary standards and monitoring of online activity.

More radical options could take the form of new legislation that might include prohibiting certain ‘problematic’ business-to-platform commercial practices or the creation of a new regulatory framework for online platforms that would apply in parallel to competition law.  The latter option could also include a dedicated EU-led regulator for digital platforms.

DG Connect is concerned that there is inequality of bargaining power weighted towards digital platforms where some smaller retailers are experiencing discrimination. It has cited examples such as Apple, Amazon and Google app stores.

There has been some speculation that the proposal represents a stand-off between DG Connect and DG-Competition, creating the potential for confusion between the roles of regulation and competition law in the digital world.  A closer reading, however, suggests that the Commission is concerned about the potential for inconsistency and fragmentation in the rules in the different member states and that it is seeking to promote a unified approach as part of its digital single market agenda.

The Commission is seeking comments by 22 November 2017

See, further:  https://ec.europa.eu/info/law/better-regulation/initiatives/ares-2017-5222469_en

European Commission raids German car manufacturers

European Commission raids German car manufacturers

The European Commission has confirmed that on 23 October it has carried out further unannounced inspection visits at the premises of German car manufacturers.  Daimler and Volkswagen have confirmed that they have been raided.

The raids follow inspections in the German vehicle sector made last week and where BMW has confirmed that it has been the target of an inspection visit by the Commission.

The Commission has stated that it believes that the manufacturers may have breached Article 101 TFEU.

Reports in the German media in the summer have speculated that the manufacturers coordinated over the size and shape of car parts. There has also been speculation that Daimler and Volkswagen applied for leniency some time ago, although the recent raids suggest that the Commission has not rushed to investigate the conduct at issue.  This might be due, in part, to the type of conduct under investigation which may bear the hallmarks of legitimate cooperation over standardisation rather than hardcore cartelisation. 

Source: Commission STATEMENT/17/4103

CMA confirms more investigations in pharma

The Competition and Markets Authority has announced that it is conducting three further investigations into suspected anticompetitive arrangements in the pharmaceutical sector.  The statement confirms the CMA’s already extensive probes in the sector.
The three investigations will all examine possible collusion, while two will also investigate abuse of dominance.
Aspen Pharma has confirmed that a new CMA investigation will focus on the supply of steroids used primarily to treat Addison’s disease, and another product used to treat a range of inflammatory diseases including asthma, allergies, arthritis, blood disorders and kidney disease.
Concordia has confirmed that the CMA is investigating some products in its “international segment”.

The CMA has also extended a separate investigation into Concordia, launched on 25 October 2016, for alleged excessive pricing of drugs supplied to the NHS. 

European Commission raids banks and trade associations over access to account data

The European Commission carried out dawn raids on 3 October at the premises of companies and trade associations active in the banking sector “in a few” member states.  The Commission suspects that these parties may have restricted financial technology companies from gaining access to customer account data, despite the customers consenting to access.

The Commission has confirmed that it is investigating the matter under Articles 101 and 102 of the TFEU.

According to media reports, the Polish Banking Association and the Dutch Banking Association are part of the investigation.  The British Bankers Association and the Belgian Banking Association have confirmed that they are not currently part of the probe.

The investigation takes place against a changing regulatory framework where, under Payment Services Directive 2, to be implemented by January 2018, banks will be obliged to grant third parties access to certain account data where their customers have consented.  This should facilitate market entry and expansion by payment services providers into the payment services sector.

The practices under investigation do not seem to be confined to one member state.  It will be interesting to see how the investigation develops as the issues are not straightforward.

Owing to the nature of financial markets which are characterised by network effects and often large economies of scale, there is frequently a need to balance competition with cooperation and the benefits this can bring.  However, this investigation does not appear to involve a blatant horizontal boycott of third parties and there may be legitimate reasons for refusing access.  At the same time, the investigation raises a wider question of data portability and whether this might harm competition.

The Commission has not ruled out an abuse of – single or collective – dominance.  However, this raises a fundamental question of whether a unilateral refusal to supply even by a dominant company can be abusive in the absence of the requested access being an essential facility.

No direct right of appeal from competition issues transferred to the Competition Appeal Tribunal

The Competition Appeal Tribunal (CAT) has ruled that there is no statutory right of appeal from the CAT where competition issues are transferred to it

The case concerned proceedings brought by Agents' Mutual Limited against Gascoigne Halman Limited. The competition issues were transferred to the CAT by the High Court, under the Section 16 Enterprise Act 2002 Regulations 2015. The contractual issues remained with the High Court. 

The CAT found that the rules governing access to Agents' Mutual’s property portal did not breach the Chapter I prohibition.

Gascoigne Halman applied for permission to appeal against the CAT's judgment. The CAT ruled that the competition issues in this case were analogous to determination of a preliminary issue.  The CAT accepted that there could be a right of appeal from the CAT on determination of such issues, for example if they arose in proceedings for competition law damages under sections 47A and 49 of the Competition Act 1998.  However, the CAT did not consider that the wording of those sections was apt to cover the situation in this case where the competition issues were transferred to the CAT in the context of a breach of contract claim.

Therefore, the application had to be treated as an application to the High Court under CPR 52.3 for permission to appeal the order of the High Court giving effect to the CAT’s determination.

Case 1262/5/7/16 (T) - Agents' Mutual Ltd v Gascoigne Halman Ltd (t/a Gascoigne Halman), ruling (application permission to appeal) [2017] CAT 22