The GDPR is not just for Christmas…but we have a new Information Commissioner

 

The GDPR is not just for Christmas…but we have a new Information Commissioner

“Unlike planning for the Y2K deadline, GDPR preparation doesn’t end on 25 May 2018 – it requires ongoing effort”.

And so quipped the then Information Commissioner Elizabeth Denham in her 2017 blog at:  https://iconewsblog.org.uk/2017/12/22/gdpr-is-not-y2k/

Its now ‘all change’ at the helm of the ICO.

The Department for Digital, Culture, Media and Sport has confirmed that Mr John Edwards has been appointed the UK's new Information Commissioner by Letters Patent.  His five-year term of office will begin on 3 January 2022.

Mr Edwards brings wide experience in information rights law.  He was formerly New Zealand’s Privacy Commissioner.  He also has broad data regulatory experience, as a Privacy Commissioner and also from 20 years in legal practice.

Under the Data Protection Act 2018 (DPA 2018), the Information Commissioner is appointed by Her Majesty the Queen by Letters Patent on the basis of fair and open competition and on the recommendation of ministers.

Mr Edwards’ appointment was approved by the Digital, Culture, Media and Sport Select Committee after a pre-appointment hearing on 9 September 2021.

The role and powers of the Information Commissioner are set out in the UK GDPR and the DPA 2018.  In September 2021, the government announced plans for wide reforms to the UK's data protection regime, including the Information Commissioner's Office.

https://www.gov.uk/government/news/john-edwards-is-confirmed-as-the-new-information-commissioner

“Unlike planning for the Y2K deadline, GDPR preparation doesn’t end on 25 May 2018 – it requires ongoing effort”.

And so quipped the then Information Commissioner Elizabeth Denham in her 2017 blog at:  https://iconewsblog.org.uk/2017/12/22/gdpr-is-not-y2k/

Its now ‘all change’ at the helm of the ICO.

The Department for Digital, Culture, Media and Sport has confirmed that Mr John Edwards has been appointed the UK's new Information Commissioner by Letters Patent.  His five-year term of office will begin on 3 January 2022.

Mr Edwards brings wide experience in information rights law.  He was formerly New Zealand’s Privacy Commissioner.  He also has broad data regulatory experience, as a Privacy Commissioner and also from 20 years in legal practice.

Under the Data Protection Act 2018 (DPA 2018), the Information Commissioner is appointed by Her Majesty the Queen by Letters Patent on the basis of fair and open competition and on the recommendation of ministers.

Mr Edwards’ appointment was approved by the Digital, Culture, Media and Sport Select Committee after a pre-appointment hearing on 9 September 2021.

The role and powers of the Information Commissioner are set out in the UK GDPR and the DPA 2018.  In September 2021, the government announced plans for wide reforms to the UK's data protection regime, including the Information Commissioner's Office.

https://www.gov.uk/government/news/john-edwards-is-confirmed-as-the-new-information-commissioner

CMA sends statement of objections to online retailer over suspected resale price maintenance

 

 

CMA sends statement of objections to online retailer over suspected resale price maintenance

The Competition and Markets Authority (CMA) has sent a statement of objections to Dar Lighting Limited (Dar) alleging breach of Chapter I of the Competition Act.  It suspects that Dar has prevented retailers from discounting the prices of domestic lighting products produced by Dar and supplied online between 2017 and 2019.

The CMA did not send its SO particular retailers.  In this case it has used Rule 5(3) of the Competition Act Rules, which allows it to address a proposed infringement decision to fewer than all the persons who are or were party to the relevant agreements.

This is not the first time that the CMA has targeted resale price maintenance in the lighting product sector.  In 2017, the CMA fined the National Lighting Company £2.7 million for resale price maintenance.  In that investigation the CMA issued warnings letters to other suppliers in the sector.

https://www.gov.uk/cma-cases/domestic-lighting-suspected-anti-competitive-practices-concerning-resale-price-maintenance

CMA orders Facebook to sell Giphy

 

CMA orders Facebook to sell Giphy

 

The CMA has published its final report on its in-depth inquiry into the completed acquisition by Facebook, Inc (now Meta Platforms, Inc ) of Giphy, Inc.

The CMA has confirmed its provisional finding that a full divestment of Giphy is the only solution to the substantial lessening of competition it has identified.

Facebook is by far the largest provider of social media and messaging services in the UK. Giphy is the world's leading provider of free GIFs.

Given the multi-sided nature of the relevant markets, the CMA raised competition concerns in social media and in display advertising arising from the elimination of a potential competitor.

Prior to the CMA’s intervention, there had already been a high degree of integration.  Facebook is being required to restore certain Giphy activities to ensure that it will have the necessary management and technical assets to enable it to be an effective competitor, post-divestment to a purchaser to be approved by the CMA.

This is the first time that the CMA has prohibited outright a merger by a Big Tech firm

 

https://www.gov.uk/government/news/cma-directs-facebook-to-sell-giphy

UK and France open competition probes into ferry operators

 

UK and France open competition probes into ferry operators

The UK Competition and Markets Authority (CMA) and the French Competition Authority have launched parallel competition investigations into capacity sharing agreements for freight shipment services of P&O Ferries and DFDS.

The French investigation followed two weeks after a similar probe was opened on 12 November by the CMA into the same arrangements.

DFDS and P&O Ferries transport more than 2.5 million trucks across the English Channel each year.

The operators have claimed that the arrangements are essential to ensure the continued viability of the cross-channel UK-EU trading route.  According to the operators their cooperation arrangements ensure that drivers have access to departures every 36 minutes.  The parties claim that their cooperation will reduce wait times while preserving the resilience of these routes.

The regulators have not formally announced whether they are cooperating in their investigations but it would be surprising if talks were not underway. A ‘pick up the phone’ culture of information exchange between competition authorities conducting similar investigations is by no means unusual.  Brexit should not change that despite the current frostiness in political relations.  There is an obvious need to coordinate theories of harm and remedies to avoid inconsistent results which could compromise each regulator’s objectives.

However, different results are not unheard of.  In 2013 the Competition Commission blocked Eurotunnnel’s acquisition of SeaFrance when the French Competition Authority approved the transaction. 

Phase II review of NVIDIA/ Arm deal on national security grounds

 

Phase II review of NVIDIA/ Arm deal on national security grounds

The Secretary of State for Digital, Culture, Media and Sport has instructed the Competition and Markets Authority (CMA) to carry out an in-depth investigation of the proposed acquisition of Arm by NVIDIA on competition and national security grounds.

The Secretary of State has powers under the Enterprise Act 2002 to intervene in certain mergers on public interest grounds.

NVIDIA develops and supplies processor products.  Arm licenses intellectual property for processing units, in particular to semiconductor chipmakers and Systems-on-Chip developers.

In its Phase I investigation the CMA identified that the transaction raises the possibility of a substantial lessening of competition across four key markets - data centres, Internet of Things (IoT), the automotive sector and gaming applications.

The CMA is leading a Phase II investigation covering both competition and national security grounds.

The CMA has 24 weeks (subject to a possible eight-weeks extension) to conduct this investigation.

Separately, this week the UK government has published guidance clarifying what types of transactions will be subject to new national security provisions.  These require that the government must be informed about acquisitions of companies that do business in the UK within 17 sectors deemed to be of “national importance”, including artificial intelligence, data infrastructure and defence.

In October 2021 the European Commission launched a Phase II merger investigation over similar (competition) concerns that the merged entity would have an incentive to restrict its rivals from accessing Arm’s technology.

https://www.gov.uk/government/news/digital-secretary-asks-cma-to-carry-out-further-investigation-into-nvidias-takeover-of-arm

Google challenge to Shopping antitrust infringement decision largely dismissed by General Court

 

Google challenge to Shopping antitrust infringement decision largely dismissed by General Court

 

The General Court has given judgment in an action brought by Google to challenge the European Commission decision to fine Google EUR 2.42 billion for abusing its dominant position by preferring Google's own comparison shopping service.

The General Court dismissed Google's arguments that its actions amounted to competition on the merits.

The General Court also dismissed Google's argument that the Commission should have analysed the infringement as a refusal to supply in accordance with the principles established in Oscar Bronner.  The Court concluded that the abuse was based on the differential treatment by Google of its own services.

The General Court also rejected Google's arguments that the Commission had failed to consider its objective justification for its practices and claimed efficiencies.

While the Court concluded that Google’s practices had harmful effects it concluded that the Commission had not established such effects in relation to the national markets for general search services.  It annulled the Commission’s findings as far as 13 national markets were concerned.  However the partial annulment had no effect on the penalty which was upheld by the Court.  

The decision is likely to embolden the Commission and other national regulators in their sustained focus on competition cases in digital markets.  The vindication of the Commission’s self-preferencing theory will not be universally well received pushes the boundaries of EU law.  This may not be the end of the matter given the important point of legal principle at stake.  However, given the emphatic nature of the General Court’s findings an appeal to the Court of Justice will face an uphill battle.

Case T-612/17, Google LLC and Alphabet, Inc v European Commission ECLI:EU:T:2021:763

CMA – again - requires JD Sports to divest Footasylum

 

The Competition and Markets Authority (CMA) has issued its report in its remitted second phase investigation of the completed acquisition by JD Sports Fashion plc of Footasylum plc.

The CAT remitted the case back to the CMA for reconsideration after a challenge to the CMA’s decision to block the merger.  The CAT held that the CMA should have requested further information about the impact of the COVID-19 pandemic.

The CMA has again concluded that the merger may be expected to result in a substantial lessening of competition (SLC) in the retail supply of sports-inspired casual footwear in the UK and in the retail supply of sports-inspired casual apparel in the UK (in each case in both the instore and online channels).

While the outcome is the same as the CMA’s original finding, it differs in its identification of the SLC.  This reflects its findings on market developments since May 2020, which have resulted in Footasylum becoming a weaker constraint and other competitors becoming stronger constraints on JD Sports.  However, these changes did not affect the adverse effects identified by the CMA.

The CMA maintains its original view that requiring the full divestiture of Footasylum by JD Sports is the only effective remedy to the SLCs.

https://www.gov.uk/government/news/cma-requires-jd-sports-to-sell-footasylum

Payment Systems Regulator publishes Final Report in Card-Acquiring Services Market Review

 

Payment Systems Regulator publishes Final Report in Card-Acquiring Services Market Review

 

The Payment Systems Regulator has published its final report on its market review into the supply of card-acquiring services (MR18/1.8).

The PSR has considered how the market operates, the fees merchants pay for card-acquiring services, the quality of service they receive and barriers to market entry or to switching.

The PSR has found no evidence that the supply of card-acquiring services does not work well for the largest merchants (with annual card turnover over £50 million).

However, the PSR has found that the supply of card-acquiring services does not work well for small and medium-sized merchants and large merchants with annual card turnover between £10 million and £50 million.  The PSR intends to publish a remedies consultation in early 2022 to seek views on a suitable remedies package.  The remedies will be aimed to improve outcomes for these merchants by encouraging them to search and switch, or negotiate a better deal with their existing provider, and reducing the obstacles to getting a better deal.

The PRSR intends to publish its provisional decision on remedies (and potentially a draft remedies notice) for consultation later in 2022.

https://www.psr.org.uk/news-updates/latest-news/news/camr-final-publication/

CMA market investigation into Motorola mobile radio services

 

CMA market investigation into Motorola mobile radio services

The Competition and Markets Authority (CMA) has decided to make a market investigation in respect of the supply of land mobile radio (LMR) network services for public safety in Great Britain.

The CMA has raised concerns about the extreme market concentration given a monopoly provider (Motorola) and a monopsony buyer (the Home Office)), and the asymmetry of information between Motorola and the Home Office

The CMA has raised concerns that Motorola’s dual position as owner of Airwave Solutions and key supplier in the design and roll-out of the now delayed new Emergency Services Network means that it has an incentive to delay or shape the roll-out of the ESN to its advantage.

https://www.gov.uk/cma-cases/mobile-radio-network-services

CMA fines Facebook for breach of initial enforcement order

 

 

The Competition and Markets Authority has imposed a £50.5 million penalty on Facebook, Inc for failure, without reasonable excuse, to comply with an initial enforcement order (IEO) in relation to its review of the completed acquisition by Facebook of Giphy, Inc.

Facebook was required to provide the CMA with regular updates on compliance as part of the CMA’s merger investigation.  Despite repeated warnings, Facebook significantly reduced the scope of those updates.

The penalty is the highest imposed for breach of an interim enforcement order since the current system was introduced in April 2014.  The CMA considers that Facebook’s breach was deliberate.

In July 2020, the CMA imposed a fine of £300,000 on Pentland and JD Sports for breach of an initial enforcement order.  This penalty notice was withdrawn following an appeal.

The CMA has also fined Facebook £500,000 for changing its Chief Compliance Officer on two separate occasions without seeking the CMA’s prior consent.

The size of the penalty on Facebook shows that the CMA will not hesitate to enforce its increasingly tougher stance on breach of procedural requirements including compliance with information requests in its merger and antitrust investigations.

CMA fines Facebook over enforcement order breach - GOV.UK (www.gov.uk)

CMA market study into music streaming

 

CMA market study into music streaming

 

The Competition and Markets Authority has announced that it intends to launch a market study into music streaming.

This measure follows the July 2021 House of Commons Digital, Culture, Media and Sport Committee report on the economics of music streaming.  The Committee recommended that the government ask the CMA to undertake a full market study.

The CMA has written to the government and the Committee outlining its intention to refine and develop the final scope of a market study before formally launching it as soon as possible.

The CMA has raised concerns about the dominance of music groups Sony Music, Universal Music and Warner Music and their impact on recording artists’ earnings.  Together, these three companies control up to 75% of the UK music recording market.

The CMA is also conducting a Phase 2 merger investigation into Sony's completed acquisition of AWL, an 'artist and label' services provider.

https://www.gov.uk/government/news/cma-plans-probe-into-music-streaming-market

European Commission confirms raids in woodpulp sector

 

 

The European Commission has confirmed unannounced inspections in several member states at the premises of companies active in the wood pulp sector.

Wood pulp is a dry fibrous material made from wood, which is used to manufacture different paper products (such as tissue, writing paper and paperboard).

The Commission states that it suspects that the raided companies may have infringed Article 101 of the TFEU.

Several companies confirmed that they were raided as part of the probe, including Mercer International, Metsä Fibree, Stora Enso and UPM-Kymmene.

It is rare for the Commission to announce dawn raids before the companies concerned have confirmed that they have been the subject of raids.  This may be a signal that the Commission is sending a strong message that cartel enforcement remains a priority and could embolden national authorities to be more vocal about their own enforcement strategies.

The Commission states that the inspections were conducted in compliance with all coronavirus regulations.

 

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_5223

 

 

Subsidiary liable for competition law damages relating to parent company infringement

 

Subsidiary liable for competition law damages relating to parent company infringement

 

The ECJ has given judgment in a preliminary ruling from a Spanish court on questions relating to whether a subsidiary company can be held liable for damages incurred as a result of an infringement committed by its parent company.

 

The ECJ ruled that, where the existence of an infringement of Article 101(1) by a parent company has been established, the victim may establish the civil liability of a subsidiary of that parent company.

However, it is necessary to prove that the subsidiary and parent constituted an economic unit.  This may be established based on both the economic, organisational and legal links that unite the two legal entities and also the existence of a specific link between the economic activity of that subsidiary and the subject matter of the infringement.

The ECJ also ruled that EU law precludes a national law which provides for the possibility of imputing liability for one company’s conduct to another company only in circumstances where the second company controls the first company. ]

The judgment does not ensure the success of all competition law damages actions against subsidiaries in respect of infringements by their parents.  It does, however, reflect the economic reality that often those subsidiaries will be involved in the marketing and sale of the cartelised products.  As such they cannot easily escape liability simply because they were not the addressee of the Commission’s decision.

Case C-882/19 Sumal, S.L. v Mercedes Benz Trucks España ECLI:EU:C:2021:800

CMA competition investigation into sale of Leicester City FC-branded products and merchandise

 

CMA competition investigation into sale of Leicester City FC-branded products and merchandise

 

The Competition and Markets Authority has opened an investigation into suspected violation of competition law by Leicester City Football Club Limited and JD Sports Fashion Plc.

The investigation concerns potential infringements of Chapter I of the Competition Act 1998 in relation to the sale of Leicester City-branded products and merchandise in the UK.

The CMA will conduct and initial investigation until March 2022.

The probe follows a similar investigation, launched in December 2020, concerning the sale of Rangers FC-branded replica football kit sold in the UK.  This investigation is ongoing.

Suspected anti-competitive behaviour in relation to the sale of Leicester City FC-branded products and merchandise - GOV.UK (www.gov.uk)

General Court upholds Commission decision in largest ever EU merger gun-jumping case but reduces penalty

 

General Court upholds Commission decision in largest ever EU merger gun-jumping case but reduces penalty

The General Court has ruled in Altice Europe NV (Altice)’s challenge against the European Commission's decision to fine Altice for implementing its acquisition of PT Portugal in breach of the EU Merger Regulation.

The Commission found that the acquisition agreement contained provisions pre-empting clearance, in particular clauses relating to how the target business was to be managed prior to completion including veto rights.

Therefore, the Commission was correct in finding that there had been a breach of both the notification and standstill obligations.

The Commission was entitled to impose fines for the infringements of both Article 4(1) and Article 7(1) of the EU Merger Regulation.

The General Court decided that it was appropriate to reduce by 10% (to EUR 56,025,000) the fine imposed in relation to the infringement of the notification obligation in Article 4(1).  This reflected the fact that Altice had informed the Commission about the transaction before it was signed and had engaged in some pre-notification contact.

The case is a reminder of the Commission’s increasing vigilance to enforce the notification and standstill provisions under the EU Merger Regulation and impose significant fines for breaches even if the transaction itself does not raise serious competition concerns.

Case T-425/18, Altice Europe NV v European Commission, ECLI:EU:T:2021:607

CMA refers Sony Music Entertainment / AWAL and Kobalt Neighbouring Rights merger to Phase 2

 

CMA refers Sony Music Entertainment / AWAL and Kobalt Neighbouring Rights merger to Phase 2

The Competition and Markets Authority (CMA) has referred the completed acquisition by Sony Music Entertainment of AWAL and Kobalt Neighbouring rights businesses from Kobalt Music Group Limited to a Phase 2 merger investigation.

The CMA’s first phase investigation found concerns about the loss of potential competition in the wholesale digital distribution of recorded music in the UK

The CMA considered that, absent the merger, Sony and AWAL could have competed more vigorously in the future, in particular in relation to the wholesale digital distribution of recorded music in the UK.

The CMA is required to issue its final report is 2 March 2022.

 

https://www.gov.uk/cma-cases/sony-music-entertainment-slash-kobalt-music-group-merger-inquiry

CAT orders gown supplier to explain why its products claims were reasonable in competition damages claim

 

 

 

 

CAT orders gown supplier to explain why its products claims were reasonable in competition damages claim

The Competition Appeal Tribunal has ordered Churchill Gowns to respond to allegations in its competition law damages claim that its action is barred because it fraudulently misled its customers about its products and its director knowingly, or recklessly, spread misleading information.

The subject-matter of the dispute is of more than legal interest for barristers and academics as it concerns a claim against companies Ede & Ravenscroft, William Northam and Irish Legal & Academic of compelling academic institutions to purchase academic dress exclusively from them.

Churchill has been asked to explain why it maintains that it had reasonable grounds to claim that its gowns were made entirely from recycled plastic bottles.

The case is a sober reminder of the perils of disclosure.  The claimant disclosed over 4,600 documents into a data room and produced redacted versions of over 400 which it renumbered after the defendant started reviewing them.  The CAT ruled that Churchill Gowns should revisit 514 documents to identify 400 documents which it claimed were confidential and then tally their names with the numbered redacted copies of the same.

The dispute is listed for trial in January.

1351/5/7/20, Churchill Gowns Limited and Student Gowns Limited v Ede & Ravenscroft Limited and Others

CMA consults on revised procedures for Competition Act settlements

 

CMA consults on revised procedures for Competition Act settlements

The Competition and Markets Authority (CMA) is consulting on its guidance on settlement procedures in Competition Act 1998 (CA98) cases.

At present, if a settling business appeals against the settlement decision, it will lose the benefit of the settlement discount.  The CMA proposes to replace this with a statement that the settling party will not challenge or appeal against the infringement decision to the Competition Appeal Tribunal.

The proposed revisions follow Roland (U.K.) Limited's unsuccessful appeal against the fine imposed by the CMA, as part of a settlement agreement, on Roland for resale price maintenance in breach of Article 101 TFEU and Chapter I of CA98.

The CMA believes that the proposed changes will help bring finality to the settlement process.  Similar requirements are imposed in some settlements of sector regulatory enforcement cases by the UK sector regulators including the Financial Conduct Authority.  However, concerns have been raised from the perspective of the right to a fair trial under Article 6 ECHR.

The CMA invites comments by 5pm on 28 September 2021.

https://www.gov.uk/government/consultations/consultation-on-draft-ca98-procedures-guidance

CAT grants collective proceedings order application in MasterCard competition law collective proceedings claim

 

 

The Competition Appeal Tribunal (CAT) has given its judgment on the remitted collective proceedings order (CPO) application by Mr Walter Hugh Merricks CBE (Merricks).  This is a milestone judgment certifying the first collective damages action for breach of competition law under the UK’s bespoke collective actions regime.

Merricks sought permission to act as the class representative to bring opt-out collective proceedings under section 47B of the Competition Act 1998 (Competition Act).  The collective proceedings concern follow-on actions for damages arising from the European Commission's 2007 decision finding that MasterCard's EEA multilateral interchange fees breached Article 101(1) TFEU.

The CAT dismissed Merricks’ application for a CPO in July 2017. The Court of Appeal and Supreme Court upheld Merricks' appeal.  The Supreme Court remitted the CPO application to the CAT for reconsideration.

The CAT authorised Merricks as the class representative under section 47B(8) of the Competition Act provided that a suitable undertaking as to liability for adverse costs is given by his litigation funder.

The CAT ruled that the claim for compound interest could not be fairly resolved in collective proceedings.  It considered that compound interest would result in a claim for a “gargantuan amount”.  The CAT expects a plausible methodology to be put forward at this stage, “even if it may need refinement later”.

The CAT also ruled that a claim for damages cannot be brought in the name of a deceased person under section 47B of the Competition Act.  The CAT held that a claim by an individual for loss caused by Mastercard's infringement of competition law will, on their death, vest in their estate.  

The CAT will hear further submissions from the parties as to the domicile date and date for opt-in and opt-out notifications to be set out in the CPO.

Walter Hugh Merricks CBE v Mastercard Incorporated and others [2021] CAT 28

CMA sends statement of objections to Pfizer-Flynn – again

 

CMA sends statement of objections to Pfizer-Flynn – again

 

The Competition and Markets Authority (CMA) has issued a statement of objections in the remittal case concerning abuse of dominance by Pfizer and Flynn for charging unfair prices for phenytoin sodium capsules in the UK.

The Competition Appeal Tribunal held in June 2018 that the CMA had made errors in its conclusions on abuse of dominance and application of the legal test for excessive pricing.  The CAT remitted the case to the CMA insofar as it deals with excessive pricing.

In March 2020 the Court of Appeal dismissed an appeal by Flynn but allowed the CMA’s appeal in part as to excessive pricing.  This did not affect the CAT’s overall conclusions on excessive pricing and the Court affirmed the CAT’s decision on remittal.

The CMA has now issued a statement of objections provisionally finding that the parties abused their respective dominant positions.

For a four year period Pfizer's prices were between 780% and 1,600% higher than it had previously charged.

Pfizer supplied the drug to Flynn, which sold it to wholesalers and pharmacies at prices between 2,300% and 2,600% higher than those they had paid previously.

The statement of objections comes one week after the CMA fined Advanz Pharma in excess of £100 million for excessive pricing of the thyroid medication liothyronine.  The wording in the two press releases is very similar and suggests very similar theories of harm. 

https://www.gov.uk/government/news/cma-accuses-pharma-firms-of-illegal-pricing

CMA fines Advanz Pharma for excessive and unfair pricing

 

CMA fines Advanz Pharma for excessive and unfair pricing

The CMA has imposed penalties of over £100 million on Advanz Pharma for inflating the price of thyroid tablets.

The CMA finds that Advanz increased the price of thyroid tablet packs from £20 in 2009 to £248 in 2017, an increase of 1,110%.

The CMA says that this fine “sends a clear message” to the pharmaceutical sector that infringements of competition law will not be accepted.

The practices at issue were found to be an abuse of a dominant position contrary to the chapter II prohibition.  In 2007, Advanz developed a ‘price optimisation’ strategy whereby it de-branded certain drugs which faced limited generic competition.  In so doing, it could remove them from the price regulation regime which applied to branded drugs, allowing it pricing freedom.

The CMA finds that as a result of the infringements the NHS lost out.  In the year before the infringements were implemented NHS spending was £600,000, but by 2009 this had increased to over £2.3 million and was £30 million by 2016.

This decision is part of the CMA's ongoing work to tackle against anti-competitive practices in the pharmaceutical sector.

 

https://www.gov.uk/government/news/cma-fines-pharma-firm-over-pricing-of-crucial-thyroid-drug

CMA report in electrical vehicles market study

 

CMA report in electrical vehicles market study

The Competition and Markets Authority (CMA) has published its final report in its market study into the supply of charging for electric vehicles (EVs) in the UK.  The inquiry was launched in December 2020.

The CMA concludes that while some parts of the sector are developing quite well, including venues such as shopping centres, workplaces and private parking, other parts are faring comparatively worse.

This situation could have an impact on the UK’s wider commitment to net zero and the government’s commitments to ban the sale of new petrol and diesel cars, in each case by 2030.

Amongst the CMA’s recommendations are that the government set out a national strategy for rolling out EV charging between now and 2030.

The CMA also recommends that the government attaches conditions to its £950 million Rapid Charging Fund.

Separately, the CMA has also launched a competition investigation into long-term exclusive arrangements between the Electric Highway Company and three motorway service area operators.

The CMA has stated that it will work with government and the devolved administrations with a view to creating an EV sector that people can have trust and confidence in.  Given the importance of EVs, in particular to the achievement of net zero it is likely that this is not the last we have heard about competition in the sector.

https://www.gov.uk/government/news/further-action-needed-on-ev-charging-to-meet-net-zero

 

Consultation on new competition regime for digital markets

 

The Departments for Digital, Culture, Media and Sport (DCMS) and Business, Energy and Industrial Strategy (BEIS) have published a joint consultation on a new competition regime for digital markets and the establishment of the Digital Markets Unit (DMU).

The consultation crystallises the ongoing debate about whether we should establish ex ante economic regulation of ‘digital platforms’, with or without ‘enhanced’ competition law – and what form those regulatory frameworks should take place.  This question is a pressing priority for policymakers and competition authorities globally including in the UK, EU and internationally.

The consultation seeks views on: 1) the criteria and mechanisms that will identify which firms fall within the scope of the new regime; . 2)  a new code of conduct to promote open choices, fair trading and trust and transparency; 3) the powers the DMU will have to make pro-competition interventions that will address the root causes of market power; 4) a distinct merger regime for firms with strategic Market Status (SMS), overseen by the Competition and Markets Authority.  To designate a firm with SMS, the DMU will be required to test and conclude that a firm has substantial and entrenched market power in at least one activity, providing it with a strategic position.  There is no broadly accepted regulatory model.  For example, should all platforms meeting certain criteria be regulated in the same way?  

The deadline for responding to the consultation is 1 October 2021.

 

 

https://www.gov.uk/government/consultations/a-new-pro-competition-regime-for-digital-markets

 

CMA fines for excessive and unfair pricing and market sharing in the supply of hydrocortisone tablets

The Competition and Markets Authority (CMA) has imposed fines totalling over £260 million for competition law violations in relation to the supply of hydrocortisone tablets.

Hydrocortisone is used to treat inflammatory skin conditions as well as Addison’s Disease, a rare adrenal glands disorder.

The CMA found that Auden Mckenzie and Actavis UK (now “Accord UK”) imposed on the NHS “excessive and unfair” prices for hydrocortisone tablets from 2008 to 2018.

The CMA further found that the companies paid generic suppliers to keep their rival products out of the UK market. It appears that this so called “pay for delay” element of the case was a significant factor in the high prices. The CMA states that the NHS was at one point being charged over £80 for a single pack of tablets that had previously cost less than £1.

The decision represents the most significant and authoritative UK competition case to date on excessive pricing (at least until there is a new decision in the Pfizer/Flynn case). This has traditionally been one of the more difficult areas of competition law infringement to establish. The case comes as a warning shot that the CMA will not shy away from bringing a competition case in respect of excess pricing where it believes that consumers (here, the NHS and the taxpayer) are paying over the odds because the market is deprived from new (generic) entry.

https://www.gov.uk/government/news/cma-finds-drug-companies-overcharged-nhs

#pharmacompetition

Commission fines car manufacturers €875 million for restricting competition in emission cleaning

 

Commission fines car manufacturers €875 million for restricting competition in emission cleaning

The European Commission has found that Daimler, BMW and Volkswagen group (Volkswagen, Audi and Porsche) violated EU competition law by colluding on technical development in the area of nitrogen oxide cleaning.

The Commission imposed penalties of €875,189,000.

Daimler avoided a fine which would have amounted to around €727 million..  As the leniency applicant it revealed the existence of the cartel to the Commission.  

The Commission applied a reduction of 10% of the fines of all parties under the 2008 Settlement Notice in view of the acknowledgment of their participation in the cartel.

The Commission found that the parties colluded from June 2009 to October 2014 by indicating to each other that none of them would aim above the minimum standards required by law.  Interestingly the Commission abandoned some of its earlier allegations where it found insufficient evidence to substantiate them.  The Commission did not pursue that part of its case that the collusion also affected petrol cars.

The decision is aligned with the Commission’s Green Deal agenda even if it is not presented as such. However this does not mean that all cooperation on green technical development is a hardcore infringement and the Commission will need to provide guidance so as to distinguish what is flagrantly anti-competitive and what might be pro-competitive on a balancing of the benefits and risks to competition.

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3581

Subsidy Control Bill published

 

Subsidy Control Bill published

The government has introduced the Subsidy Control Bill to Parliament.

BEIS has also published the government's response to its February 2021 consultation on the proposed design of the new UK regime.

BEIS expects to publish further details on implementation and guidance.  The government expects that the new regime will come into force in 2022, subject to Parliamentary approval.

The Subsidy Control Bill sets out the framework for a UK subsidy control regime that meets the UK's international commitments including those in the UK-EU Trade and Co-operation Agreement.  This reflects the following main features:

·       Public authorities must consider seven subsidy control principles before deciding to award a subsidy/make a subsidy scheme and the subsidy/subsidy scheme must be compatible with those principles.  

·       Exemptions for certain types of subsidy, including those with a value below £350,000, services of public economic interest assistance below £725,000, natural disasters and other exceptional circumstances, and national and global economic emergencies.

·       Certain types of subsidy will be prohibited, or only permitted subject to specified conditions.

·       Transparency requirements relating to the award of subsidies/making a subsidy scheme.

·       A Subsidy Advice Unit (SAU) will be set up within the Competition and Markets Authority (CMA), with the functions of monitoring and oversight, and providing pre-award and post-award advice.

·       The Secretary of State develop a streamlined approach for subsidies at low risk of distorting competition, trade and investment; that promote the government’s strategic objectives; and which the government assesses to be compliant with the principles.  This will be set out in guidance.

·       The Secretary of State will, in secondary legislation, designate some types of subsidy as "subsidies of interest" or "subsidies of particular interest".  

·       Public authorities can ask the SAU to provide advice on subsidies of interest (voluntary referral) and must ask the SAU to provide advice on subsidies of particular interest (mandatory referral).

·       The Secretary of State can “call in” a subsidy or scheme before it is granted or made, requiring it to be referred to the SAU.

·       The CMA SAU also be asked to provide post-award reports on subsidies.

·       The Competition Appeal Tribunal (CAT) will hear appeals by interested parties (or the Secretary of State) against subsidy decisions, using judicial review principles.

·       The CAT will be able to make recovery orders.

 

BEIS press release:  https://www.gov.uk/government/news/new-subsidy-system-to-support-uk-jobs-and-businesses-boost-the-economy-and-strengthen-the-union

Subsidy Control Bill:  https://www.gov.uk/government/collections/subsidy-control-bill

Commission opens competition investigation into Google’s online advertising practices

 

 

Commission opens competition investigation into Google’s online advertising practices

The European Commission has launched an antitrust investigation into whether Google has breached the EU competition law prohibitions on restrictive agreements and abuse of a dominant position under Article 101 and 102 TFEU.

The Commission is concerned that Google has favoured its own online display advertising technology services in the 'ad tech' space.  It is investigating whether these practices disadvantage competing advertising technology services providers, advertisers and online publishers.

The Commission will investigate requirements to use certain Google services and Google Ad Manager.  

The Commission is also investigating Google's plans to prohibit the placement of third party cookies on Chrome and replace them with a "Privacy Sandbox".  This will stop making the advertising identifier available to third parties on Android devices when the user ‘opts out’ of personalised advertising.

The Commission will take into account the need to protect privacy, in accordance with the GDPR.  This part of the investigation mirrors a similar inquiry by the UK Competition and Markets Authority (CMA).  The CMA indicated last week that it was minded to close this part of its investigation by allowing the authority to have a role in third party cookies policy.

This EU investigation is high profile and big stakes.  This is the Commission’s fourth antitrust probe into Google relating to technology/IP/IT practices.  It reflects similar themes to the previous Shopping, Android and AdSense investigations.  Google is appealing all these decisions.  The penalties imposed totalled approximately EUR10 billion and required Google to change a host of its business practices.

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3143

CMA Consultation on UK version of Vertical Restraints Block Exemption

 

CMA Consultation on UK version of Vertical Restraints Block Exemption

The Competition and Markets Authority (CMA) is consulting on the retained EU Vertical Agreements Block Exemption Regulation (European Commission Regulation 330/2010) (VBER).  The CMA invites responses by 22 July 2021.

The CMA proposes to replace the retained VBER, upon expiry on 31 May 2022, with a UK Vertical Agreements Block Exemption Order (UK VABEO).

The UK VABEO will be tailored to the needs of the UK market.

The CMA intends to extend the exemption to cover wholesalers and independent importers who are also active in the downstream market and asks whether the current £44 million turnover threshold for such agreements should be revised.

The CMA considers that the current rules on hardcore restrictions which would prevent the block exemption applying are fit for purpose, except in relation to:

·        Territorial and customer restrictions, where the CMA plans to clarify the boundary between active and passive sales.

·        Indirect measures restricting online sales.  The CMA proposes to remove the prohibition of dual pricing and the requirement for overall equivalence from the list of hardcore restrictions.

·        Parity obligations (most favoured nation clauses or “MFNs”), where the CMA intends to add wide parity obligations to the list of hardcore restrictions.

The CMA considers that resale price maintenance (RPM) should remain a hardcore restriction.

The CMA will review the block exemption after six years to reflect the fast movement of market developments, not least the growth in online sales, Brexit and business cooperation in the wake of COVID-19.

https://www.gov.uk/government/consultations/retained-vertical-agreements-block-exemption-regulation-consultation

Market study in mobile ecosystems

 

Market study in mobile ecosystems

The Competition and Markets Authority has launched a market study into mobile ecosystems in the UK.  The CMA’s focus is on the role of Google and Apple over the supply of operating systems, app stores and web browsers.

The market study will assess potential consumer harm in four areas 1) competition in the supply of mobile devices and operating systems; 2) competition in the distribution of mobile apps; 3) competition in the supply of mobile browsers and browser engines; and 4) the role of Apple and Google in competition between app developers.

The CMA invited comments on the statement of scope, published alongside the study, by 26 July 2021.  

The CMA aims to publish an interim report on whether it will make a market investigation reference by 14 December 2021.  That process itself could take 18 months.

The CMA must publish its final report on the market study by 14 June 2022.

The study is proposed to be wide ranging and some would say it is long overdue.

https://www.gov.uk/government/news/cma-to-scrutinise-apple-and-google-mobile-ecosystems

Commission publishes preliminary report on consumer Internet of Things

 

Commission publishes preliminary report on consumer Internet of Things

 

The European Commission has issued interim findings in its sector inquiry into the Internet of Things (IoT).

The study raises concerns about the relationship between voice assistants as the link between smart devices and intermediaries and a lack of interoperability in the sector.

Unsurprisingly, the study reveals concerns about large amounts of data being consolidated in in the hands of a few vertically-integrated companies; namely Google, Amazon and Apple.

The Commission is consulting on its preliminary findings until 1 September 2021.  It plans to publish its final conclusions in the first half of 2022.

The results will inform the Commission’s regulatory and competition law enforcement strategy and they could frame the design of the controversial Digital Markets Act.

https://ec.europa.eu/commission/presscorner/detail/en/QANDA_21_2908

Review of EU Motor Vehicle Block Exemption Regulation

 Review of EU Motor Vehicle Block Exemption Regulation

The Commission has published its findings on its Motor Vehicle Block Exemption consultation.

Executive Vice-President Margrethe Vestager has commented on the importance of data in the context of this review: “Our evaluation has shown that the Motor Vehicle Block Exemption Regulation has made it easier for businesses in the automotive sector to assess whether their agreements are in line with the EU rules on competition. At the same time, it showed that we need to take into account the emergence of new technologies and the increasing role of data in competitive dynamics in this industry. The Commission will therefore reflect on how to address these issues to ensure that the rules remain fit for a rapidly changing automotive industry.”

The Commission will now start the policy-making stage of the review, in order to decide by 31 May 2023 whether to renew the current Motor Vehicle Block Exemption regime, revise it or let it lapse.

For full details see here:

https://ec.europa.eu/commission/presscorner/detail/en/ip_21_2673

#motorvehicles