Court of Justice rules on limitation periods under national law

Court of Justice rules on limitation periods under national law

The Court of Justice has ruled on a request for a preliminary ruling from a Portuguese court on the application of Directive 2014/104 (the EU Damages Directive) to national law limitation periods in competition damages claims.

The request relates to an action by Cogeco Cable seeking compensation as a result of an abuse of dominance by Sport TV which had been established by the Portuguese Competition Authority, albeit turned over on appeal.

Before implementation of the Damages Directive in Portugal, national law provided a limitation period of three years running from when the person harmed was aware of its right to compensation. There was no procedure for suspending the period during an investigation by the competition authority.

The Court of Justice ruled that the EU Damages Directive did not apply to actions commenced before its entry into force.  However, the Court ruled that the national limitation rules were not compatible with Article 102 TFEU and the principle of effectiveness.

In particular, the Court ruled that short limitation periods that start to run before the injured party is able to identify the infringer may make bringing claims excessively difficult or practically impossible.  It also ruled that a limitation period that cannot be suspended during an investigation by a competition authority or appeal may mean that a person harmed would find it impossible to bring an action based on a final finding of infringement.

Case C-637/17, Cogeco Communications Inc v Sport TV Portugal and Others ECLI:EU:C:2019:263

European Commission fines Nike for vertical restraints

The European Commission has fined Nike EUR12,555,000 for restricting distributors from selling its licensed products outside their allocated territories in the EEA in violation of Article 101 TFEU.

The Commission found that the infringing practices lasted for thirteen years between July 2004 and October 2017.  It found that Nike used non-exclusive licensing and distribution agreements which illegally banned out-of-territory sales by licensees.  It further found that these restrictions were reinforced with threats to terminate or refuse supply and the use of master licences which expressly prohibited licensees from supplying products to customers who could be selling outside their allocated territories. The Commission also found that Nike took steps to prevent licensees from selling to customers who would sell on the products outside their allocated territories.

The Commission found that the practices limited cross-border trade involving branded products for clubs such as FC Barcelona, Manchester United, Juventus, Inter Milan and AS Roma, as well as national associations such as the French Football Federation.

The Commission reduced the fine on Nike by 40% for its cooperation with the investigation.

The decision illustrates that the Commission’s sustained interest in vertical restrictions that partition the internal market shows no sign of abating.  The Commission is currently evaluating whether its existing rules on vertical restraints contained in the vertical block exemption regulation and guidance should continue, elapse or be changed.

Case 40436 - Nike. Commission press release IP/19/1828.

Google fined EUR 1.49 billion for third EU antitrust abuse

Google fined EUR 1.49 billion for third EU antitrust abuse

The European Commission has hit Google with a third fine for abuse of dominance in two years.

The Commission found that Google abused its dominant position in online search advertising intermediation through restrictive contractual terms with websites which prevented its rivals from placing their search advertisements on those sites.

The Commission found that Google was dominant in the online search intermediation market in the EEA since at least 2006 when Google imposed an exclusivity obligation banning publishers from placing search adverts from competitors on their results pages.  The Commission has further found that from March 2009 the practices were replaced with ‘relaxed exclusivity’ where Google aimed to secure for itself the most valuable positions.

Google stopped the offending practices in July 2016 when the Commission issued is statement of objections.  The Commission has nevertheless required Google to cease the practices and to refrain from any measure that has the same or equivalent object or effect.

Set against the EUR 2.42 billion fine in 2017 in the Google comparison shopping case and the record fine of EUR 4.34 billion in 2018 in the Google Android operating system case, this is a third significant fine for Google. Commissioner Vestager noted that the misconduct lasted over 10 years and denied other companies the possibility to compete on the merits and to innovate, and consumers the benefits of competition.

When announcing the decision, the Commissioner also gave an update on other Google antitrust cases.  There are some developments that appear to be in a positive direction.  Of significance for the shopping case, June 2018 data showed that about 6% of clicks on results went to competitors but it now appears that has increased to around 40%.

Google has announced that it intends to provide a choice screen for Android users in Europe.  A choice screen remedy was used in the Microsoft commitments which brought to an end the Commission’s browser investigation in 2009. While the aim is to allow consumers to choose what browsers they want on their Android phone, it will face the challenge of potential consumer inertia which may default to Android.

Sainsbury’s and Asda revamped offer of commitments

Sainsbury’s and Asda have announced details of enhanced commitments in an attempt to secure approval from the Competition and Markets Authority for their merger.

The CMA published provisional findings in February when it found wide ranging and significant competition concerns.  The CMA said that the merger could lead to a worse experience for shoppers through increased prices and a reduction in the quality and range of products offered and across in-store and online services.  It also expected that prices could rise at the 100 or so petrol stations owned by the merging parties.

The merging parties have now committed to reduce prices on “everyday items” by at least 10 per cent through £1 billion worth of investments.  They also promise to cap profits on petrol sales which would be independently reviewed by a third party.

The parties have said that cost savings would be made by putting Argos stores into Asda and through joint procurement.  At the same time, they pledge to pay all small suppliers within 14 days.

These behavioural commitments would also be supported with grocery and petrol forecourt divestments across both brands.

These commitments show that the merging parties are determined to seek to address the extensive competition concerns that the CMA has identified across 629 locations.   By announcing specific details of how the merger efficiencies would flow through to consumer benefits the parties are seeking to address the CMA’s concerns that consumers would lose out through increased prices and reduced quality and choice.  The CMA has a statutory deadline of 30 April to make a final decision.

Spring Statement 2019: Competition and regulatory

Spring Statement 2019: Competition and regulatory

The Spring Statement, delivered on 13 March 2019 by the Chancellor of the Exchequer, Philip Hammond, perhaps did not get the usual airtime in the wake of other extraordinary parliamentary business.

From a competition and regulatory perspective, there are some key takeaways.  The Chancellor has welcomed the report of the Digital Competition Expert Panel. The government is expected to respond later this year on the call to update the competition laws to take account of the digital age.  The review also recommended that subject to an orderly Brexit, the CMA will undertake a review of how regulation affects competition in the UK business context. Quite what that means is unclear but the CMA has confirmed this on Twitter.  Finally, the National Infrastructure Commission study on the future of economic regulation will report in Autumn 2019.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/785618/WMS_final_Commons.pdf

Artficial Intelligence and Antitrust

AI has attracted significant antitrust interest raising the question of whether the competition regimes as they stand are ready to address potentially anticompetitive outcomes arising from AI decisions. Although many issues arising with AI elide with the antitrust debate around big data, AI and the use of algorithms raises its own rather specific issues.



On 14 March I will be giving a seminar on this topic which address among the following key questions:

Will AI lead to anticompetitive outcomes?

Is there an enforcement gap?

Views from the regulators



Please register here if you would like to attend:





https://www.eventbrite.com/e/artificial-intelligence-and-antitrust-the-end-of-competition-as-we-know-it-or-business-as-usual-tickets-58567866064





Date and Time

Thu, March 14, 2019

6:00 PM – 8:00 PM GMT





Location

Room 2.1, Centre for Commercial Law Studies (QMUL), 67-69 Lincoln's Inn Fields, London, WC2A 3JB



Please do share these details with anyone who may be interested.

Commission fines care safety equipment producers

Commission fines car safety equipment producers in another cartel settlement

The European Commission imposed fines of EUR368,277,000 on Autoliv and TRW for their participation in a cartel relating to car safety equipment. This is the 29th EU cartel settlement since the first settlement decision was taken in May 2010.



Takata received full immunity from fines under the Leniency Notice.



The three companies acknowledged their involvement in the cartel and the fines reflect a 10% reduction under the settlement procedure.



The Commission found infringements relating to the supply of seatbelts, airbags and steering wheels to the Volkswagen and BMW Groups where the parties exchanged commercially sensitive information and co-ordinated their market behaviour through meetings, calls and e-mails.



According to the Commission, the Volkswagen and BMW Groups sell around three of every ten cars bought in Europe.  The Commission concluded that the cartel therefore had a significant effect on competition in the EU.



Case AT.40481. Commission press release IP/19/1512.