CMA review of liner shipping block exemption

 

CMA review of liner shipping block exemption

The Competition and Markets Authority is reviewing the retained EU Liner Shipping Consortia Block Exemption Regulation (Commission Regulation 906/2009) (Shipping Block Exemption).

The Competition (Amendment etc.) (EU Exit) Regulations 2019 preserved the existing EU block exemption regulations as retained law.  These regulations also allowed the Secretary of State to renew or replace the retained EU block exemptions.

The UK’s review of block exemptions can occur in parallel with the EU review or expiration of the underlying block exemptions or it can occur independently.

The Shipping Block Exemption provides an automatic exemption for agreements between liner shipping companies allowing for joint services to be provided through consortia.  It does not allow liner shipping companies to agree to fix prices, otherwise limit capacity or sales, or allocate markets or customers.

The Shipping Block Exemption is due to expire on 25 April 2024. Meanwhile the European Commission has launched a review on whether the EU block exemption continues to be fit for purpose. 

In carrying out its own review the CMA will consider whether the Shipping Block Exemption serves the interests of UK businesses and consumers taking account of the features of the UK market. Not least, this takes place against a background of global supply chain disruptions. 

The CMA is expected to consult further on the UK Shipping Block Exemption in retained form in 2023.

Meanwhile the CMA is undertaking reviews of a number of other EU block exemptions existing as retained EU law in the UK. This includes a review of the retained Vertical Block Exemption Regulation (November 2021) and the retained Horizontal Block Exemption Regulations (June 2022). The CMA also consulted, in July 2022, on its proposed recommendation on the retained Motor Vehicle Block Exemption Regulation.

https://www.gov.uk/cma-cases/liner-shipping-consortia-block-exemption-regulation

Competition Appeal Tribunal upholds appeal in first ever MFN infringement case

 

Competition Appeal Tribunal upholds appeal in first ever MFN infringement case

 

The Competition Appeal Tribunal has ruled in favour of BGL (Holdings) Limited, BGL Group Limited, BISL Limited and Compare the Market Limited (Compare The Market) in its challenge to the decision of the Competition and Markets Authority (CMA) imposing penalties on Compare The Market of around £18 million for breach of Article 101 TFEU and the Chapter I prohibition.

The CMA found that Compare The Market had imposed wide “most favoured nation” (MFN clauses in its agreements with home insurers providers in relation to the use of its price comparison website (PCW).  

The CAT found that the CMA had made errors in defining the relevant market as a single market.  The CAT considered that the CMA should have defined two separate markets identifying the two sides of the platform relating to the supply of customer introduction services to home insurance providers and the supply of home intermediation services to consumers.

The CAT also found material errors in the CMA’s analysis of the effect on competition; in particular the CMA had failed to assess the significance of other channels for the purchase of home insurance by consumers.

The CAT was unable to test much of the evidence relied on by the CMA stating that much of it was anecdotal.  It was not convinced that MFNs had a potential anti-competitive effect on promotional discounts.

The CAT upheld the appeal and set aside the CMA's decision.

BGL (Holdings) Limited and others v Competition and Markets Authority [2022] CAT 36

CAT issues Practice Direction on the conduct of collective proceedings following certification

 

CAT issues Practice Direction on the conduct of collective proceedings following certification

 

The Competition Appeal Tribunal (“Tribunal”) has issued Practice Direction 3/2022 relating to the conduct of collective proceedings after certification.

This practice direction follows the Tribunal’s May 2022 ruling on case management in Le Patourel v BT Group (“Le Patourel”).  Le Patourel decided that the same CAT tribunal would both deal with case management issues and hear the trial.  In the event that there is a collective settlement proposal, this would be dealt with by a separately constituted tribunal (a "settlement tribunal").

This approach differs from the usual approach in paragraph 6.7 of the CAT's Guide to Proceedings 2015 (which envisages the appointment of a "trial tribunal" to take over the conduct of proceedings from the "case management tribunal" that heard and decided the CPO application).

The most likely situation in which another tribunal may need to be constituted is if a collective settlement is proposed. In that event, the parties should notify the Registrar of the proposed collective settlement and request the constitution of a settlement tribunal to consider the proposed settlement and give or make any appropriate directions or orders.

This ensures that the trial tribunal can be kept apart from the consideration of any settlement and ready to continue to trial if necessary.

https://www.catribunal.org.uk/sites/default/files/2022-08/01Aug2022_Practice%20Direction_ConductofCollectiveProceedingsAfterCertification_0.pdf

Le Patourel v. BT Group [2022] CAT 21

CMA approves the Strategic Plan under the Private Healthcare Market Investigation Order

 

CMA approves the Strategic Plan under the Private Healthcare Market Investigation Order

The Competition and Markets Authority has approved the Strategic Plan of the Private Healthcare Information Network (PHIN) required by the Private Healthcare Market Investigation Order 2014.

The Order aims to address the adverse effects on competition that the CMA identified in its final report on the private healthcare market investigation.  The markets for private healthcare provision and private healthcare insurance were the subject of a market investigation reference in the UK (2012-2014).  The CMA’s final report concluded that certain features of the markets for privately-funded healthcare services were leading to adverse effects on competition.  The CMA introduced a number of remedies (including transparency remedies about private hospitals’ performance for patients and reduction in the incentives offered to referring clinicians). 

The Order requires the establishment of an industry information organisation to make private healthcare information (about private healthcare facilities and consultants) available via an independent public website.

The PHIN was approved for these purposes in 2014.  PHIN is required to submit to the CMA a five year plan, developed and approved by its members setting out how it proposes to collect the information specified in this Order and the basis on which it may licence access to the information.

The PHIN Strategic Plan outlines how the sector will deliver the remainder of the requirements of the Order.  The CMA states that it will monitor progress closely and stands ready to take enforcement action if hospitals or consultants fail to meet the standards and timescales set out.

3Since the final report, many of the competition and consumer welfare concerns identified by the CMA as problematic if they were “extensively and rigidly applied” have worsened and been applied by all the major private medical insurers (PMIs).  The consultants have attempted to have the issues looked at afresh by the CMA, using a variety of legal tools.  These attempts have met administrative priority objections.  However, while the original MIR was limited to a dataset on market dynamics prevailing up to 2012 there does not appear to be appetite on the part of the CMA to conduct another root and branch investigation.

https://www.gov.uk/cma-cases/private-healthcare-market-investigation

CMA and Ofcom publish joint statement on online safety and competition

 

CMA and Ofcom publish joint statement on online safety and competition

 

Digital transformation is supporting all sectors of the economy.  The Competition and Markets Authority (CMA) and Ofcom have published a joint statement setting out their common views on the relationship between online safety and competition in digital markets.

The statement explores the interaction between interventions to support competition and how initiatives by the CMA and sector regulator Ofcom can benefit consumers.

1.     Why safety and competition concerns arise online and why these issues can sometimes interact in digital markets.

2.     The implications for policy design.

3.     How the CMA and Ofcom will take account of these interactions as they continue to collaborate

This statement forms part of the work programme, designed by the Digital Regulators Co-operation Forum (DRCF) to support wider cooperation among digital regulators.

The International Telecommunication Union (ITU) has long identified how collaborative regulation represents a fundamental change in the way that governments and regulators develop regulatory frameworks and rules.  In 2016 at the General Symposium for Regulators ITU presented the concept of collaborative or fifth generation (G5) regulation under the generations of regulation model.  G5 involves a new system of cross-sectoral regulation involving harmonised rules with holistic and collaborative approaches as well as high level principles.

 

https://www.gov.uk/government/publications/cma-ofcom-joint-statement-on-online-safety-and-competition

CMA opens market study into road fuel sector

 

CMA opens market study into road fuel sector

The Competition and Markets Authority (CMA) has launched a market study into the supply of road fuel in the UK.

The Secretary of State instructed the CMA to undertake an urgent review of the fuel market on 11 June amid concerns about potentially unfair pricing of fuel across the country.  The CMA reports rising pump prices over the last 12 months, particularly in 2022.  However the 5p per litre cut in fuel duty announced in the Spring Statement appears to have been passed on.

The market study will examine why refining spreads are so high, how long they are likely to continue and whether there are measures the UK could or should take to address them.

The CMA invites evidence and views on the issues that it intends to examine during the market study by 1 August 2022.

The CMA must announce within six months whether or not it is intending to make a market investigation reference following its market study.

The CMA must publish its final report on the market study within 12 months.  It intends to publish an update on its initial findings in the autumn of 2022.

The CMA is not the only national competition authority to probe the fuel sector.  The launch of the study coincides with the 7 July publication by the Austrian Federal Competition Authority on its fuel market inquiry report. The authority found increases in refining margins but not that these were due to a lack of competition.  It will take account of feedback on its report when it makes recommendations to the government when the consultation on the report concludes on 27 July.

UK:

https://www.gov.uk/government/news/review-finds-cause-for-concern-in-some-parts-of-road-fuel-market

Austria

https://www.bwb.gv.at/fileadmin/user_upload/Bericht_BU_Kraftstoffe_2022_final.pdf

European Parliament adopts Digital Markets Act

 

European Parliament adopts Digital Markets Act

On 5 July 2022 the European Parliament formally adopted the Regulation on contestable and fair markets in the digital sector (Digital Markets Act (DMA))

The DMA was proposed by the European Commission in December 2020.  The legislation is aimed at tackling the effects of practices by certain platforms acting as digital gatekeepers in the single market.  It provides for a system of ex ante regulation and market investigations.

The entities designated as gatekeepers must allow:

1)     Third parties to interoperate with their own services

2)     Business users to access the data they generate in the gatekeeper's platform, to promote their own offers and conclude contracts with their customers outside the gatekeeper's platforms.

Gatekeepers will be prohibited from:

1)     Ranking their own services or products more favourably (self-preferencing) than third parties on their platforms

2)     Preventing users from easily uninstalling pre-loaded software or using third party apps and app stores

3)     Processing users’ personal data for targeted advertising without explicit consent.

Fines of up to 10% of a gatekeeper's total worldwide turnover may be imposed by the Commission (20% for recidivism).

Once formally adopted by the Council, expected later in July, the DMA will be published in the EU Official Journal and enter into force 20 days later.

The obligations under the DMA will take effect 6 months after its entry into force.

Enforcement will be key to the success of the DMA. The Commission is known to be on a huge recruitment drive. This is not simply a question of increased numbers of staff but having the right skills and expertise, legal, policy economics and business, in what is a dynamic area.

 

https://www.europarl.europa.eu/doceo/document/TA-9-2022-0270_EN.html