CMA accepts undertakings Barratt/ Redrow merger

 

CMA accepts undertakings Barratt/ Redrow merger

The Competition and Markets Authority (CMA) has accepted undertakings in lieu of referring the completed acquisition by Barratt Developments plc of Redrow plc for a Phase 2 merger investigation.

In its Phase 1 investigation, the CMA found that the merger gives rise to a realistic prospect of a substantial lessening of competition as a result of horizontal unilateral effects in the supply of new-build private residential housing. The effects were confined to one local area centred around the Barratt development at Tilstock Road, Whitchurch.

The CMA consulted on commitments relating to Redrow's entire overlapping area in the Kingsbourne, Nantwich site that has planning consent for the development of 324 houses.

Under the final undertakings, the parties have appointed an independent third-party agent, Savills, to manage the sale of the remaining unsold houses and houses where the sale has not been legally completed.

The undertakings require a monitoring trustee and an independent professional quantity surveyor (approved by the CMA) will be appointed.

https://assets.publishing.service.gov.uk/media/66ffc0a130536cb927482c3b/Full_text_decision__undertakings_accepted_.pdf

General Court annuls Google AdSense abuse decision

 

The General Court has ruled in an appeal by Google and its parent company Alphabet against the European Commission's decision to fine Google EUR1.49 billion for abusing its market dominance in the online search advertising intermediation market.

In 2019 the Commission found that Google had infringed Article 102 TFEU by imposing restrictive clauses in contracts with third-party websites that prevented Google's competitors from placing their search adverts (ads) on these websites.

The General Court found that the Commission had not established that the clauses could have produced a foreclosure effect in 2016, in the absence of data about their market coverage in that year.

The General Court also found that the Commission had erred in its assessment of the duration of the clauses, in particular by failing to take into consideration all the relevant circumstances of the publishers subject to the clauses.

The General Cout found that these errors undermined all the Commission's findings in relation to the foreclosure effect of the clauses and its conclusion that they constitute a single and continuous infringement of Article 102. As a result the Commission's decision must be annulled in its entirety.

The General Court’s judgment is in marked contrast to the Commission’s victory before the Court of Justice this month which upheld its Google Shopping decision.  However, the latter case can be considered to be somewhat more significant for the Commission than AdSense  in upholding the legal basis for self-preferencing as an abuse of dominance independently of the essential facilities line of case law. 

The practical significance of the AdSense decision may be more diminished as it is understood that Google has not used the relevant clauses since 2016.  However, today’s judgment may not be the end of the Commission’s interest in contractual clauses which may have foreclosure effects in online advertising markets.  In particular, the Commission now has the Digital Markets Act at its disposal to tackle potentially foreclosing practices on the part of digital gatekeepers and without the need to prove effects.

Case T‑334/19, Google LLC and Alphabet Inc v European Commission ECLI:EU:T:2024:634

Qualcomm fails to overturn predatory pricing abuse of dominance decision

 

 

 

The General Court has dismissed an appeal against the European Commission's decision to impose a fine of EUR 242,042,000 on Qualcomm for infringing Article 102 of the TFEU by engaging in predatory pricing.

In July 2019 the Commission found that Qualcomm abused a dominant position in the global market for UMTS baseband chipsets by supplying UMTS chipsets to Huawei and ZTE, at below cost prices, with the intention of eliminating Icera, who was then its main competitor.

Qualcomm alleged that the Commission erred in defining the relevant market, applied the incorrect legal standard, and that its theory of predation was illogical.

Qualcomm also raised various procedural irregularities and errors in the Commission’s reasoning.

The General Court rejected Qualcomm's arguments in their entirety.

However the General Court accepted Qualcomm’s plea concerning the calculation of the amount of the fine.  The Court found that the Commission departed, without justification, from the methodology laid down in its 2006 Fining Guidelines.  The General Court found that the Commission erred in calculating the basic amount of the fine by adding together the value of sales made by Qualcomm during the second half of 2009, in 2010, and in the first half of 2011, instead of by multiplying the value of sales made during the last calendar year by the number of years of participation in the infringement

The General Court recalculated the fine to be imposed on Qualcomm, setting it at EUR238,732,659.33 representing a reduction in the fine of approximately EUR 3.3 million.

The judgment is a victory for the Commission’s substantive analysis. The reduction in the fine indicates that there can be monetary benefits in contesting the level of the fine However, in this case, a question may be asked as to whether the reduction in the penalty was outweighed by the legal costs and involvement in a lengthy appeal, notwithstanding the points of legal principle at stake.  It remains to be seen whether Qualcomm will fight on to the Court of Justice.

Case T-671/19, Qualcomm v Commission EU:T:2024:626

European Court of Justice upholds Google Shopping Abuse Decision

 

European Court of Justice upholds Google Shopping Abuse Decision

The European Court of Justice has dismissed the appeal by Google LLC and Alphabet Inc (Google) against the General Court's judgment that largely rejected Google's appeal against a European Commission's decision that Goggle had abused its dominant position by giving preference to its own search engines and imposing a fine of EUR 2.4 billion.

The appeal relates to a decision in 2017.  The Commission found that Google had abused its dominant position on the market for online general search services in 13 countries in the EEA by favouring its own comparison shopping service over competing services.

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

The ECJ held that the General Court did not err in its consideration of the Bronner criteria that apply in essential facilities cases and in concluding that this was not a case in which the Bronner criteria were applicable.

The ECJ also found that the General Court had not erred in finding that Google's practices deviated from competition on the merits.

Further, the ECJ found that the General Court had not erred in dismissing Google's arguments in relation to the application of the "as-efficient-competitor" test.

The original decision was a landmark development in the application of EU competition law, not only to Big Tech companies but also on the scope of Article 102 TFEU to deal with a dominant company favouring its own operations. Now, almost a decade later, the ECJ has provided useful guidance and clarified that the competition authority can “rely on a range of evidence, without being required systematically to use any single tool” to prove its case.

Case C-48/22) Google LLC and Alphabet, Inc v European Commission EU:C:2024:726

Court of Appeal reinstates CMA hydrocortisone fines

 

Court of Appeal reinstates CMA hydrocortisone fines

The Court of Appeal has upheld an appeal against a judgment by the Competition Appeal Tribunal (CAT) that overturned around £100 million in fines two drugs manufacturers, describing the CAT procedure as “inappropriate” and “unjust”.

In September 2023, the CAT upheld the CMA's findings that Auden/Actavis UK had reached agreements with AMCo/Advanz to delay the entry of their own 10mg hydrocortisone tablets, in breach of the Chapter I prohibition under the Competition Act 1998. However, the CAT raised concerns about due process, relating to the CMA's failure fully to cross-examine Advanz's witnesses. It, therefore, held a further hearing to consider this issue.

In March 2024, the CAT found that the CMA had breached due process, rendering the substantive findings on cartel infringements as set out in the September 2023 judgment unsafe.

The Court of Appeal allowed the CMA's appeal against this ruling, finding that the CAT had erred in assuming that the CMA’s case involved allegations of dishonesty or misconduct and that these matters were not properly put to witnesses.

The CAT should have dismissed the companies' appeals without requiring the CMA to cross-examine a witness on dishonesty or misconduct. It was inappropriate and unjust for the CAT to deliver a provisional judgment and adjourn for a further due process hearing

Allergan plc, Amidpharm UK Ltd, Amidpharm UK Ltd, Advanz Pharma Services (UK) Ltd, Advanz Pharma Corp Ltd, Cinven (Luxco 1) S.a.rl and others, Auden Mckenzie (Pharma) Limited and Accord-UK Limited v Competition and Markets Authority [2024] EWCA Civ 1023

Back to School – CMA Blog on School Uniform Policy and Competition Law

 

As the summer holidays draw to a close, and due to ongoing affordability concerns, the Competition and Markets Authority (CMA) has published a blog on whether school uniform policies might be at risk of breaching competition law.

This is not the first time that the UK competition authorities have been concerned about competition law and school uniform policy. Particular concerns have been raised about exclusive supply arrangements with uniform suppliers.

In 2015, the CMA wrote to schools and suppliers to remind them about their obligations under competition law.

The CMA is urging school leaders to consider whether their uniform policy is in the best interest of pupils and parents.  The CMA provides a number of suggestions: 

1.        Schools and their governing bodies and academy trusts should consider how to use competitive tender processes to get the best results when awarding contracts.

2.        If a contract has been awarded to a manufacturer for sale through third party retailers, care should be taken that there are no provisions that fix the minimum price that the uniform can be sold at, which could constitute resale price maintenance.

3.        Consideration could be given to how many items of uniform are branded or highly tailored to the school and whether this reduces the number of suppliers who will choose to invest in a stock uniform that can only be sold to a small pool of customers.

4.        Schools give consideration to extending the lifespan of uniform, for example by offering a pre-loved uniform shop.

https://competitionandmarkets.blog.gov.uk/2024/08/23/school-uniforms-is-your-policy-at-risk-of-breaking-the-law/

Reintroduction of Litigation Funding Agreements (Enforceability) Bill

 

Reintroduction of Litigation Funding Agreements (Enforceability) Bill

The Ministry of Justice has issued a statement in response to a written question regarding whether the government plans to reintroduce the Litigation Funding Agreements (Enforceability) Bill (the Bill) and other related issues.

The statement confirms that the government "will take a more comprehensive view of any legislation to address issues in the round" once the Civil Justice Council (CJC) concludes its report on third party civil litigation funding (anticipated in summer 2025).  

The Bill was originally introduced in the last Parliamentary session but was not completed before Parliament was prorogued on 24 May 2024.

 

If passed, the Bill would have reversed the impact of the Supreme Court's decision in R (PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28.

 

Answering the written question Lord Ponsonby noted that the CJC is considering such issues, plus others, in its review of third party civil litigation funding.

It is understood that the CJC hopes to report in summer 2025.

https://questions-statements.parliament.uk/written-questions/detail/2024-07-29/hl449