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/