CMA consults on leniency in RPM cases

CMA consults on leniency in RPM cases

The Competition and Markets Authority is consulting on amendments to its Type B leniency in cases involving resale price maintenance (RPM).

The proposed changes would apply where the applicant is the first to report and provide significant added value evidence of a cartel when the CMA is already investigating the case.  In such cases the CMA has a discretion to grant immunity or up to a 100% reduction in the fine.

The CMA believes that applying the policy in RPM cases is likely to be too generous and may limit deterrence.  It maintains that there are limits to what an applicant can add in an RPM case where it already has information in its possession and because there will only ever be two parties in any RPM case.

The CMA intends to amend its guidance to state that it would not generally expect to grant immunity or discounts of more than 50% to Type B applicants in RPM cases.

The CMA invites comments on this proposal by 28 August 2020.

 

https://www.gov.uk/government/consultations/type-b-leniency-in-rpm-cases-draft-addendum-to-oft1495?utm_source=45489bff-c62d-4ebe-89ac-bcdc30be27ed&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

Hong Kong’s first cartel settlement

Hong Kong’s Competition Tribunal has approved a settlement between the Competition Commission, two construction firms and an individual.  The defendants admitted liability for price fixing and customer allocation at a public housing estate.

The case is noteworthy in two respects.  It is the first case where the Competition Commission has brought proceedings against an individual.

The Tribunal’s decision is also the first case to be settled without a full hearing since the Competition Ordinance came into force in December 2015. The requests for settlement were examined according to the approach under the Securities and Futures Ordinance, or ‘Carecraft’ procedure.  This dates from a time when Hong Kong was still under British rule.  It allows for early resolution where the defendant agrees to a statement of facts and sanctions.

The case follows a similar one in May 2019 involving 10 decorator firms.  It was a matter of speculation whether the Competition Commission’s success in that case might incentivise a settlement in near-identical facts.

European Commission launched sector inquiry into the Internet of Things

European Commission launched sector inquiry into the Internet of Things

The Commission has announced its latest sector inquiry into the Internet of Things (IoT).

The sector inquiry will cover products such as wearable devices (e.g. smart watches or fitness trackers) and connected consumer devices used in the smart home context, such as fridges, washing machines, smart TVs, smart speakers and lighting systems.

The inquiry has been expected for some time where the digital sector remains a policy focus for the Commission.  Questionnaires have already been received by interested parties.

The Commission has launched specific behavioural investigations arising out of previous sector inquiries and they have also led to legislation.  The Commission’s 2017 e-commerce probe was the catalyst for its geo-blocking probes and legislation banning unjustified geo-blocking.

The Commission expects to publish a preliminary report on the replies for consultation in the spring of 2021 with a final report in the summer of 2022.

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1326

General Court annuls European Commission state aid decision in Apple tax case

General Court annuls European Commission state aid decision in Apple tax case

The General Court has annulled a decision of the European Commission on the Irish tax authorities’ rulings in favour of Apple.  The Commission did not succeed in showing to the requisite legal standard that there was an advantage for the purposes of Article 107(1) TFEU.

The Commission’s decision concerned two tax rulings issued by the Irish tax authorities in favour of Apple Sales International (ASI) and Apple Operations Europe (AOE), both companies incorporated in Ireland but not tax resident there.

The General Court considered that the Commission should have shown that income that was taxed represented the value of the activities actually carried out by the Irish branches themselves, in view of the functions actually performed by the Irish branches of ASI and AOE and the decisions taken and implemented outside those limbs of the business.

Further, the Commission did not prove that the contested tax rulings were the result of discretion exercised by the Irish tax authorities.

The Commission is expected to appeal.

Joined Cases T-778/16 Ireland v Commission and T-892/16 Apple Sales International and Apple Operations Europe v Commission, ECLI:EU:T:2020:338

CMA closes investigations into excessive pricing of sanitisers

CMA closes investigations into excessive pricing of sanitisers

The Competition and Markets Authority (CMA) has abandoned a series of investigations into excessive pricing for hand sanitiser during the pandemic barely one month from launching its probes.

The CMA announced closure of probes into two convenience stores and one pharmacy but it has an ongoing investigation into whether another pharmacy charged excessive prices for hand sanitiser.

The CMA has not disclosed the identities of the companies concerned.  It has stated that on the evidence available a competition law breach was unlikely and continuing the investigations “would deliver limited, if any, consumer benefits”.

Excessive pricing cases are always challenging for a competition authority.  It may be that despite the early case closure the opening of the investigations has had some deterrent effect.

https://assets.publishing.service.gov.uk/media/5f0c5a7d3a6f40037ed4848c/Closure_Statement_.pdf

Taboola-Outbrain merger faces Phase II investigation

Taboola-Outbrain merger faces Phase II investigation

The Competition and Markets Authority (CMA) has launched a Phase II review into the merger of digital advertising platform operators Taboola and Outbrain.

The probe coincides with CMA recommendations on how to promote competition in the sector following its separate market study.

The CMA has stated that the merging parties did not offer remedies to address the concerns it had raised about the impact on competition in the UK online advertising sector.

Taboola and Outbrain employ algorithms to display personalised recommended content in publishers’ websites and operate on a pay-per-click basis.  The publishers receive a share of revenue each time a user clicks on an ad.

Taboola has claimed that the company offers “a more robust competitor to Facebook and Google”.  The CMA finds that the merged entity would control 80 per cent of the content-recommendation market.

The CMA has 24 weeks until 24 December 2020 to issue its final decision on whether to approve or prohibit the merger.

https://www.gov.uk/cma-cases/taboola-outbrain-merger-inquiry

CMA fines Spire and consultant ophthalmologists for price-fixing

CMA fines Spire and consultant ophthalmologists for price-fixing

The Competition and Markets Authority has imposed fines totalling over £1.2 million on Spire Healthcare Group and 6 ophthalmologists for their participation in price fixing of consultation fees in violation of Chapter I of the Competition Act 1998.

The penalties include a 20% settlement discount to reflect the parties’ admissions and cooperation with the CMA.  The leniency applicant consultant who brought the matters to the attention of the CMA received total immunity from fines.

Spire and the consultants admitted that they agreed to fix fees for initial private consultations for self-pay patients at £200. The arrangement lasted from at least 29 August 2017 to 3 July 2019 (28 June 2020 for one consultant).

The CMA imposed fines totalling over £1.2 million on Spire.  Six of the consultants received fines of £2,978, £1,186, £2,312, £2,193, £3,859, £642.

https://www.gov.uk/cma-cases/privately-funded-healthcare-services