CMA fines musical instrument makers for resale price maintenance

CMA fines musical instrument makers for resale price maintenance

The Competition and Markets Authority (CMA) has fined Roland (U.K.) Limited £4 million for infringing Article 101 TFEU/Chapter I of the Competition Act 1998 by engaging in resale price maintenance (RPM) in the supply of electronic drums.

In a separate infringement decision, it has fined Korg (UK) Limited £1.5 million for RPM in the supply of synthesizers and hi-tech equipment.

The CMA issued a statement of objections to the retailer GAK and Yamaha Music Europe alleging RPM.  Yamaha will receive full immunity while GAK has settled with the CMA and agreed to pay a maximum fine of £278,945.

The CMA has also published an open letter to suppliers and retailers in the musical instruments sector as part of its initiatives to crack down on infringements in the sector.  The guidance builds on case studies and experience in other investigations involving Fender and Casio.  The CMA has also developed an online pricing tool to help it detect online unlawful pricing activity.

https://www.gov.uk/government/news/musical-instrument-firms-to-pay-millions-after-breaking-competition-law

Expansion to UK public interest merger review

Expansion to UK public interest merger review

The Department for Business, Energy and Industrial Strategy (BEIS) has announced two measures to enhance the merger public interest review provisions of the Enterprise Act 2002.  The measures are designed to strengthen the resilience and national security of the UK.

There will be a new specified public interest consideration relating to public health emergencies. This will come into force on 23 June 2020.  The provision would allow the government to review and block mergers that would otherwise threaten its ability to deal with public health emergencies.

There will also be revised thresholds for mergers relating to artificial intelligence, advanced materials and cryptographic authentication.  These will allow public interest intervention on national security grounds. The statutory instrument on this provision will be laid on 22 June 2020 but will not come into force until it has been debated and approved by both Houses of Parliament.

https://www.gov.uk/government/news/new-protections-for-uk-businesses-key-to-national-security-and-fight-against-coronavirus

CMA opens abuse of dominance investigation into pricing of hand sanitiser

CMA opens abuse of dominance investigation into pricing of hand sanitiser

The Competition and Markets Authority (CMA) has opened an investigation into suspected excessive and unfair pricing by pharmacies and convenience stores of hand sanitiser products in the outbreak of the COVID-19 pandemic and in breach of the chapter II prohibition.

The investigation follows the CMA’s setting up of a taskforce in March 2020 to monitor competition problems stemming from responses to the public health emergency.  It has received complaints that prices for some products have increased unjustifiably with the largest being a median rise of just less than 400%.

The investigation is at an early stage and the CMA has not yet issued a statement of objections.  The pattern of conduct at issue has prompted investigations by other EU competition authorities and more probes are expected to be in the pipeline.  Not all will result in a formal finding of infringement.

The CMA expects to conduct its initial fact-finding and review during June and July 2020. 

https://www.gov.uk/cma-cases/hand-sanitiser-products-suspected-excessive-and-unfair-pricing

Supreme Court confirms that Visa and Mastercard’s interchange fees infringe Article 101(1) TFEU

Supreme Court confirms that Visa and Mastercard’s interchange fees infringe Article 101(1) TFEU

The Supreme Court has given judgment on appeals by Mastercard and Visa against the Court of Appeal’s judgment holding that the setting of multilateral interchange fees (MIFs) within the Mastercard and Visa payment card systems infringes Article 101 TFEU.

The Court of Appeal judgment concerned actions where various retailers claimed damages from Mastercard or Visa (Sainsbury's v Visa; Asda Stores Limited and others (AAM) v Mastercard and Sainsbury's v Mastercard).

The Supreme Court confirmed a number of findings which are worthy of a much more thoughtful examination than here.  I will be returning to the detail at a later stage.  The Supreme Court held that the Court of Appeal correctly found that it was bound by the European Commission’s 2007 infringement decision insofar as the defendant’s’ MIFs breach Article 101(1) TFEU.

As to Article 101(3), the Supreme Court considered that the fair share of the benefits must be received by the consumers in the same market as that affected by the restriction of competition.

However, the Supreme Court departed from the Court of Appeal in relation to the precision needed in the quantification of mitigation of loss.

The Supreme Court allowed the AAM cross-appeal against the decision to remit the case to the Competition Appeal Tribunal for consideration of the Article 101(3) issues; such arguments should have been dismissed.  As a result, the action should proceed to the stage of quantification of damages.

Sainsbury’s Supermarkets Ltd v Visa Europe Services LLC and others and Sainsbury’s Supermarkets Ltd and others v Mastercard Incorporated and others [2020] UKSC 24

CMA objections and settlements in roofing materials investigation

CMA objections and settlements in roofing materials investigation

The Competition and Markets Authority (CMA) has issued supplementary statements of objection alleging that three suppliers of roofing materials have engaged in a market sharing cartel in breach of the Chapter I prohibition and Article 101 TFEU.

The further objections supplement allegations issued in March 2019.

The CMA provisionally concludes that there were four individual cartel arrangements rather than one single and continuous infringement (SCI) embracing each party’s involvement in the cartel.  The change in formulation of the charges perhaps reflects the CMA’s desire to frame its case in a way that would be less likely to withstand a challenge given the difficulties in establishing an SCI.

Associated Lead Mills and BLM British Lead have settled with the CMA and agreed to pay fines exceeding £11 million.  Calder Industrial Materials has made no admission of liability and the CMA's investigation into the latter continues.

CMA extends deadline for Amazon-Deliveroo phase 2 merger investigation

CMA extends deadline for Amazon-Deliveroo phase 2 merger investigation



The Competition and Markets Authority (CMA) has extended the period for its second phase review of the acquisition by Amazon of a minority stake and certain rights in Roofoods Ltd (trading as Deliveroo).

The reference was made on 27 December 2019.

On 17 April 2020 the CMA announced its provisional findings that the merger would not be expected to result in a substantial lessening of competition in either the markets for online groceries or online restaurant delivery platforms.  It found that as a result of the outbreak of COVID-19, Deliveroo is likely to exit the market absent the additional funding made available to it through the transaction.

The CMA was required to deliver its final report today (11 June 2020). However, it has decided to extend the reference period by eight weeks until 6 August 2020.  The CMA states that it needs to take full account of representations received in relations to its provisional findings as well as the impact of COVID-19 in its assessment.

European Commission consults on tougher market investigation tool

European Commission consults on tougher market investigation tool



The European Commission is consulting on views on a possible new tool to address structural competition issues.  On 2 June 2020 it published an inception impact assessment which is accompanied by a questionnaire.

The backdrop to the proposal includes the Commission’s identification of structural problems particularly in light of digitisation and digitally-enabled markets.  The new tool would enable the Commission to identify gaps in existing competition tools and intervene to address structural problems.  There would be no finding of infringement or penalties imposed.

The Commission is consulting on whether the tool should be used only to address concerns arising from unilateral conduct by a dominant firm.  The Commission also invites views on and whether the tool should be limited to certain sectors such as digital markets which it says can be prone to abuse due to structural features such as high entry barriers.

The Commission invites views on the inception impact assessment by 30 June 2020.

The online questionnaire will be open until 8 September 2020.

Subject to the results of the consultation, the Commission aims to prepare a legislative proposal by the end of 2020.



https://ec.europa.eu/commission/presscorner/detail/en/ip_20_977