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  This penalty notice was withdrawn following an appeal.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)