Supreme Court says that CMA should pay appellant’s costs in Flynn-Pfizer appeal

 

Supreme Court says that CMA should pay appellant’s costs in Flynn-Pfizer appeal

 

The Supreme Court has ruled on costs relating to the appeals by Pfizer and Flynn against the decision of the Competition and Markets Authority (CMA) that imposed penalties on Pfizer and Flynn for charging unfair and excessive prices for phenytoin drugs.

The Competition Appeal Tribunal (CAT) in its June 2018 judgment found that the CMA’s conclusions on abuse of dominance were in error and it remitted this issue to the CMA for reconsideration.

The starting point in assessing costs in the CAT is that an unsuccessful party will pay the successful party’s costs.  While the costs rules in the CAT are flexible, the CAT ordered that the CMA pay Pfizer and Flynn a proportion of their costs of their appeal.

Allowing the appeal by the CMA, the Court of Appeal held that the CAT had erred in not taking the starting point that costs should not generally be awarded against a public body.

The Supreme Court disagreed with the Court of Appeal and found that the CAT was within its powers to take as a starting point the principle that "costs follow the event". 

Therefore, the Supreme Court allowed the appeals by Pfizer and Flynn and reinstated the CAT's costs ruling.

The Supreme Court did not accept the claim that imposing a cost order on the CMA in these circumstances would have a chilling effect on its enforcement.

The implications of the judgment may be felt beyond cases involving challenges to CMA decisions.  There is a potential read across to decisions of the sector regulators on the application of their concurrent competition and sector regulatory powers.

Flynn Pharma Limited v CMA and Pfizer Inc and another v CMA [2022] UKSC 14

CAT allows collective proceedings order in competition damages claim against Qualcomm

 

CAT allows collective proceedings order in competition damages claim against Qualcomm

 

The Competition Appeal Tribunal (CAT) has allowed an application to commence collective proceedings under section 47B of the Competition Act 1998 by the Consumer's Association (Which?) against Qualcomm Incorporated (Qualcomm).

The claim alleges that Qualcomm abused its dominant position in the markets for patent licensing and chipsets to overcharge phone manufacturers including Apple and Samsung for technology licences.

The CAT heard objections in relation to the modelling of pass-on charges but considered that the regression analysis was sufficiently based on fact for a collective proceedings order (CPO) to be granted.

The CAT dismissed the argument that the CPO was not sufficiently supported by a cost-benefit analysis.  The damages of £16-17 per class member were small but not so small as to be insignificant, especially in the current economic climate.

The CAT concluded that the Consumers Association (Which?) meets the authorisation condition, and the claims meet the eligibility condition.

The CAT therefore made the CPO on an opt-out basis allowing the £480 million claim to proceed.

The case is another example of a growing body of cases being brought before the CAT which are not standard follow on cases.  No opt-out collective claim was certified in the first five or so years since the Consumer Rights Act 2015 – but there are now four opt-out collective proceedings certified in 2022.

1266/7/7/16 Walter Hugh Merricks CBE v Mastercard Incorporated and Others

1381/7/7/21 Le Patourel v BT Group Plc and British Telecommunications Plc

1304/7/7/19 Gutmann v First MTR South Western Trains Limited and Another and 1305/7/7/19 Justin Gutmann v London & South Eastern Railway Limited

Case 1382/7/7/21 Consumers' Association v Qualcomm Incorporated

Healthcare Act 2022 Competition Issues

 

Healthcare Act 2022 Competition Issues

 

The Health and Care Act 2022 (Act) has been published following Royal Assent on 28 April. This represents a significant rolling back of the competition law provisions which were present in previous legislation.

The Act repeals competition law provisions that were introduced by the Health and Social Care Act 2012.

The Act provides for the functions of the health regulator, Monitor (now operating as NHS Improvement) to be transferred to NHS England.

Although NHS England will be obliged to assist the Competition and Markets Authority (CMA) and provide it with regulatory information, the regulator’s concurrent competition law powers are removed.

The Act also removes the role of the CMA in reviewing mergers between certain NHS entities and the CMA will no longer have a role in relation to contested licence conditions.

The Act also revokes the Procurement, Patient Choice and Competition Regulations 2013, which governed the commissioning of health care services for the purposes of the NHS.  The Chief Executive of NHS England has stated that competitive tendering can create “frictional cost and dislocation”.

The Act makes provision for new regulations on procurement and on patient choice to be made.

https://www.legislation.gov.uk/ukpga/2022/31/pdfs/ukpga_20220031_en.pdf

The Queen’s speech and retained EU Law

 

The Queen’s speech and retained EU Law

 

The Queen's Speech was delivered on 10 May 2022.  Among the draft bills tabled for the 2022-2023 session that have attracted comparatively less attention is the proposed Retained EU Law Bill (or, in populist parlance, ‘the Brexit Freedoms Bill’).

The starting point is that section 5 of the EU (Withdrawal) Act 2018 gives retained EU law supremacy over conflicting UK law passed or made before the end of the transition period to 1 January 2021.

The proposed legislation will provide new powers to amend, repeal or replace retained EU law by reducing "the need to always use primary legislation to do so", and modernise the UK's approach to making regulations.   It may be asked what is going to be added as the government already has a range of powers to amend retained EU law.  Using secondary legislation to unravel retained EU law would be subject to much less scrutiny.

It is now proposed to remove the supremacy of retained EU law over UK law.  This will ensure that EU-derived law no longer takes priority over Acts of the UK Parliament.   The notion of the supremacy of EU law post-Brexit was always a difficult concept given that the supremacy of EU law was itself a product of EU membership.  To talk of continued EU law supremacy post withdrawal requires a new way of thinking.

The Bill is expected to be ready in the summer of 2022.

https://www.gov.uk/government/speeches/queens-speech-2022

European Commission raises objections to Apple alleging abuse of dominance in Apple Pay

 

European Commission raises objections to Apple alleging abuse of dominance in Apple Pay

The European Commission has issued a statement of objections to Apple alleging abuse of dominance in the markets for mobile wallets on iOS devices, arising from its practices regarding Apple Pay.

The Commission maintains that Apple has limited access to the technology used for contactless payments over mobile devices in stores (Near-Field Communication (NFC) or "tap and go").  According to the Commission Apple’s practices are restricting competition and innovation in the mobile wallets market on the Apple operating system, iOS.

The Commission finds that Apple Pay is the only mobile wallet solution that may access the necessary NFC input on iOS.   The Commission considers that this has a restrictive effect on competitors and constrains consumer choice in relation to mobile wallets on iPhones.

The Commission finds that the practices have been continuing since 2015 when Apple Pay was first launched.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2764