Abuse of dominance investigation did not violate human rights

Abuse of dominance investigation did not violate human rights

The European Court of Human Rights (ECtHR) has rejected a claim by an oil refinery that it was denied the right to a fair trial after the Lithuanian Competition Council reopened an investigation into the company for abuse of dominance after the limitation period had expired.

The investigation concerned Lithuania’s fuel market between 2002 and 2004.

Lithuania’s competition authority fined Orlen Lietuva 32 million litas (EUR 9.3 million) in 2005.  This was annulled by the Regional Court and confirmed by the Supreme Administrative Court because the authority defined the relevant market incorrectly.

Orlen Lietuva claimed that any reinvestigation was time barred and after various national appeals the oil refinery filed a complaint to the ECtHR claiming that the national court had infringed the principle of legal certainty by overturning the previous infringement decision but allowing a new probe.

The ECtHR held that the national court did not violate the principles of legal certainty by applying the three-year statute of limitations to a factually similar other case and not the Orlen Lietuva case.  It found that the Lithuanian court’s decision was not arbitrary because it provided sufficient reasoning.

In particular, the Orlen Lietuva case involved the application of EU law and the Court found that the principle of effectiveness means that a court should not apply national procedural rules that would render the application of EU law “excessively difficult or impossible in practice”.

CASE OF ORLEN LIETUVA LTD. v. LITHUANIA (Application no. 45849/13)

The Competition (Amendment etc.) (EU Exit) Regulations 2019

The Competition (Amendment etc.) (EU Exit) Regulations 2019

On 24 January the Government published the Competition (Amendment etc.) (EU Exit) Regulations 2019 (SI 2019/93) (the “Regulations”), along with the final version of the accompanying explanatory memorandum.  The Regulations will come into force on exit day.

The Regulations aim to correct deficiencies or irrelevancies in competition legislation arising from EU exit.  They are drafted for a ‘no deal’ scenario and revoke Articles 101 and 102 of the TFEU and the EU Merger Regulation (and related regulations).  The Regulations are intended to create a separation between the UK and EU regimes for antitrust enforcement and merger control, paving the way to a standalone UK competition regime once withdrawal is complete.

The amendments also introduce a new section 60A to the Competition Act.  As a result, competition regulators and UK courts will continue to be bound by an obligation to ensure no inconsistency with pre-exit EU competition case law, unless appropriate in specific circumstances. The Regulations also bring the existing EU block exemption regulations into UK law (as amended by the Regulations).

CAT says that UK merger review deadlines need “urgent consideration” in the event of EU withdrawal

The Competition Appeal Tribunal has urged “urgent consideration” of UK statutory deadlines for the review of complex mergers in the event of the UK’s withdrawal from the EU.

The CAT’s plea came as a postscript in a judgment approving an application by Sainsbury’s and Asda in their challenge to the Phase 2 timetable set by the Competition and Markets Authority for investigation of their proposed merger.

The CAT overruled the CMA’s refusal to allow the parties more time to respond.  It said that the timetable “crossed the line to unfairness” in view of the complexity of the transaction and the importance of the parties’ response in directing the CMA’s assessment.

The CMA has 24 weeks to complete a Phase 2 merger review, subject to a possible extension by another 8 weeks.

The case highlights the difficulties presented by statutory review deadlines, against the public interest in undertaking a proper investigation. The tension is likely to be compounded in the event of Brexit, assuming that more international and complex deals will be subject to the CMA’s review.

It is rare for a court or tribunal to ask for urgent consideration of procedural rules laid down in legislation. This shows some judicial activism on the CAT’s part, which will no doubt resonate with stakeholders.

Sainsbury’ and Asda v Competition and Markets Authority [2019] CAT 1

TopCashback/ Quido referred to Phase 2

The Competition and Markets Authority has referred the proposed acquisition by Top Online Partners Group Limited (TopCashback) of Maple Syrup Group Limited (Quidco) to an in-depth investigation.

The 16 January referral follows the CMA’s 7 January announcement that it would refer the acquisition to a Phase 2 investigation unless suitable undertakings were offered.

TopCashback and Quidco are the UK’s largest cashback websites.  The CMA’s Phase 1 investigation has found that the companies face limited competition from alternatives including comparison sites and voucher sites.  The CMA has concerns that the merged company could increase advertising prices to business and reduce the amount of cashback offered to consumers.  The deadline for the CMA to issue its final report on the Phase 2 investigation is 2 July 2019.

European Commission consults on State aid regulations and guidelines

European Commission consults on State aid regulations and guidelines

The European Commission announced on 7 January that it will extend by two years certain State aid measures which were due to expire at the end of 2020.

The measures include: the General Block Exemption Regulation, the De Minimis Regulation, the Guidelines on regional aid, the Guidelines on energy and environment aid, the Guidelines on state aid for risk finance investments, the Guidelines on rescue and restructuring aid and the Communication on important projects of common European interest.  These measures were adopted as part of the State Aid Modernisation Programme.

The Commission is also conducting an evaluation or ‘fitness check’ of these measures and other State aid measures including Framework for state aid for research and development and innovation, the Guidelines on state aid to airports and airlines, the 2008 Railway Guidelines and the 2012 Communication on short term export credit.  The results will be made available in a Commission Staff Working Document.

Collective competition damages claims against trucks manufacturers gathering momentum

The Competition Appeal Tribunal (CAT) has given directions in the UK Trucks Claim Limited v Fiat Chrysler Automobiles N.V. and Others and Road Haulage Association Limited v Man SE and others applications to commence collective proceedings under section 47B of the Competition Act 1998.

The proposed proceedings would combine follow-on actions for damages arising out of the European Commission's July 2016 decision finding that MAN, Volvo/Renault, Daimler, Iveco and DAF participated in a cartel in breach of Article 101 TFEU.

The order follows a case management conference that was held on 12 December 2018 and gives directions for the collective proceedings order (CPO) applications to be heard together on 3 to 7 June 2019.

Evidence in one application will stand as evidence in the other, so far as relevant.  Requests for permission to intervene have been adjourned until after the CAT has given judgment on the CPO applications.  

Any person with an interest (including any member of the proposed class) may object to the CPO applications or the authorisation of either or both proposed class representative by writing to the CAT stating their reasons by 4pm on 12 April 2019.