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