Ofgem has imposed fines totalling £870,000 on the three companies

Ofgem has imposed fines totalling £870,000 on the three companies

Ofgem has found that energy suppliers Economy Energy and E (Gas and Electricity) Limited (EGEL), and Dyball Associates, an energy software and consultancy firm, entered into market sharing agreements in breach of the Chapter I prohibition.

UK sector regulators including Ofgem have concurrent powers alongside the Competition and Markets Authority to apply competition law in their respective sectors.  This is the first time that Ofgem has issued an infringement decision in a cartel-type case.

The agreements concerned the supply of gas and electricity to domestic customers in Great Britain between January and September 2016.

Ofgem also found that Economy Energy, EGEL and Dyball Associates shared commercially sensitive information about customer meters.

EGEL was fined £650,000.  The fine imposed on Economy Energy of £200,000 reflects the fact that it is now in administration. Dyball Associates was fined £20,000 for acting as a facilitator showing that third parties can be liable for facilitating competition law infringements, here through the use of algorithms.

Ofgem press release, 30 May 2019

CMA accuses pharma companies of market sharing in anti-nausea treatments

CMA accuses pharma companies of market sharing in anti-nausea treatments

The Competition and Markets Authority (CMA) has issued a statement of objections to Focus Pharmaceuticals, Medreich, Alliance Pharmaceuticals and Lexon alleging that they have infringed Article 101 TFEU and the Chapter I prohibition in relation to the supply of Prochlorperazine 3mg buccal tablets in the UK.  The concerned products are used to treat nausea and dizziness.

The CMA has provisionally found that Lexon and Medreich were paid a share of the profits earned by Focus on the supply of the Alliance drug and agreed not to compete in the supply of Prochlorperazine in the UK.

The CMA maintains that prior to entering the non-competes, Lexon and Medreich had been preparing to market their jointly developed product. The CMA finds that during the operation of the arrangement between December 2013 and December 2017 the prices paid by the NHS for Prochlorperazine increased by around 700%.

This latest investigation represents the CMA’s fourth major antitrust probe into the pharmaceutical sector since 2016.

Hong Kong Competition Commission wins first two cartel trials

Hong Kong Competition Commission wins first two cartel trials

The Hong Kong Competition Commission has proven the existence of hardcore anticompetitive agreements “beyond reasonable doubt” in its first two cartel cases before the Competition Tribunal.

In what marks the first piece of substantial jurisprudence under the Competition Ordinance, an important question was the standard of proof in the absence of precedent.

The Competition Tribunal found against the Competition Commission in ruling that a criminal standard should apply but it found that the authority had proven its case to that standard.

The Commission demonstrated that BT Hong Kong, Nutanix Hong Kong and Tech-21 Systems and Innovix Distribution rigged bids for the installation of a server system.

The Tribunal also upheld the Commission’s charges against 10 SMEs that they had illegally agreed to allocate markets and fix prices for decorator services at a public housing estate in the north of Hong Kong.

These cases are understood to be the tip of the iceberg. They provide important guidance for future cases.  The IT and construction sectors are expected to remain active areas for regulatory scrutiny.

EUR1 billion fine on Banks for rigging Forex

EUR1 billion fine on Banks for rigging Forex

The European Commission has fined fined Barclays, RBS, Citigroup, JPMorgan and MUFG Bank  - previously Bank of Tokyo-Mitsubishi - EUR1.07 billion for their participation in two Forex cartels for 11 currencies between 2007 and 2013.

UBS received full immunity from fines under the Commission's leniency policy.

According to the Commission, traders in charge of Forex spot trading exchanged sensitive information and trading plans.  On some occasions they coordinated their trading through online chatrooms.

The first cartel (the "Forex - Three Way Banana Split” cartel) involved UBS, Barclays, RBS, Citigroup and JP Morgan.  The second cartel (the Forex- Essex Express cartel), involved UBS, Barclays, RBS and MUFG Bank.

All the banks accepted their involvement in the cartels. The decisions were concluded under the Commission’s settlement policy, which lead to a 10% reduction in the fines.  All the banks apart from MUFG received additional leniency discounts to reflect their cooperation with the Commission’s investigation.

These are the 30th and 31st settlements since the first settlement decision was taken by the Commission in May 2010.

RBS’s settlements reflect settlements with the UK and US authorities on similar issues in 2014 and 2015.

Case AT.40135. Commission press release IP/19/2568.

European Commission fines AB InBev for abuse of dominance

European Commission fines AB InBev for abuse of dominance

The European Commission has fined Anheuser-Busch InBev SA (AB InBev) EUR200 million for unlawfully restricting cheaper imports of its Jupiler beer into Belgium.

The Commission found that AB InBev pursued a strategy of restricting wholesalers and grocers from accessing cheaper products and that the objective of this strategy was to maintain higher prices in Belgium by limiting imports of cheaper products from the Netherlands.  This strategy was implemented by restricting access to discounts, changing product packaging and limiting volumes.

The penalty reflects a reduction of 15% due to AB InBev’s cooperation with the Commission’s investigation and admission of the violation.  AB InBev has also committed to ensure that its product packaging for products in Belgium, France and the Netherlands will include mandatory information in Dutch and French for the next five years to ensure cross-border supplies.

While it is legitimate, even for a dominant company, to label products for a specific country it appears that in this case the Commission found evidence that the strategy was designed to limit parallel imports.

EU Court denies non-appealing cartelist reimbursement of its fine

The General Court has ruled that a non-appealing addressee of an infringement decision that is subsequently partially annulled is not entitled to reimbursement of its fine.

In December 2014, the General Court confirmed that the Commission was entitled to take the contested decision (in 2009).  Feralpi Holding SpA, Ferriera Valsabbia SpA and Valsabbia Investimenti SpA, Alfa Acciai SpA, Ferriere Nord SpA and Riva Fire SpA (but not Lucchini) appealed to the Court of Justice.  The Court held that the General Court had erred in concluding that the Commission was not obliged to hold a new hearing following a previous finding of annulment.

Lucchini claimed that the Commission's refusals to reimburse the fine it paid and to invite it to participate in the subsequent proceedings that had been reopened in the meantime breached its rights of defence.

The General Court dismissed the appeal and held that as Lucchini did not lodge an appeal against the 2014 judgment the decision of 2009 became final with regard to Lucchini.

The case is a reminder that non-appealing parties may not be able to benefit from a judgment that is favourable to their competitors down the line.

Case T-185/18 – Lucchini SpA v European Commission, ECLI:EU:T:2019:298

Commission accepts Visa and Mastercard commitments

Commission accepts Visa and Mastercard commitments

The European Commission has accepted commitments from Visa and Mastercard relating to inter-regional interchange fees for debit and credit payment card transactions.

Inter-regional interchange fees are charged on payments made with cards issued outside the EEA for purchases in the EEA.

The Commission has taken previous decisions against Visa and Mastercard relating to multi-lateral interchange fees for cards issued in the EEA.

This was a complex case as the payments regulatory framework has developed since the investigation began.  Further, the Interchange Fee Regulation (Regulation 2015/751) does not apply to cards issued outside the EEA.

Visa and Mastercard have agreed to cap the level of inter-regional interchange fees at 0.2% of the transaction value for debit cards and 0.3% of the transaction value for credit cards for card payments carried out by the cardholder in a shop.  The caps are 1.15% and 1.5% respectively for online debit and credit card transactions.

The measures are expected to cut the inter-regional interchange fees by on average 40%.

Commission press release IP/19/2311

Cases AT 39398 (Visa MIF) and AT 40049 (Mastercard II)