First collective action launched in the CAT

The Competition Appeal Tribunal has published a notice of application to commence collective proceedings under the amended section 47B of the Competition Act 1998.  If the CAT decides to make a collective proceedings order (CPO) the case will be the first opt-out class action following the Consumer Rights Act reforms.  The proposed action combines follow-on damages actions relating to the 2014 mobility scooters decision of the Office of Fair Trading. 

The application is brought by the proposed class representative (Ms Dorothy Gibson), the General Secretary of the National Pensioners Convention that represents around 1000 UK pensioners’ organisations.  The relief sought is damages to be assessed on an aggregate basis.  The application states that the action should proceed on an opt-out basis as it would be highly impractical for it to proceed on an opt-in basis in view of the vulnerability of the members and the sums at stake.

The CAT may only make a CPO if it considers that the person who bought the proceedings is a person who the CAT could authorise to act as the representative and if the CAT considers that the claims raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings.

The procedural rules governing collective proceedings are set out in Rules 73-98 of the CAT Rules, with guidance in Section 6 of the 2015 Guide to Proceedings.

Case 1257/7/7/16 - Dorothy Gibson v Pride Mobility Products Limited

Microsoft and LinkedIn – A Complementary Combination?

Microsoft plans to acquire the largest professional networking business LinkedIn for US$26.2 billion representing the largest acquisition in its history.

Merger clearance is being sought in the USA, Canada and EU and a few other antitrust regimes, which has prompted commentators to speculate on the prospects for clearance.

There do not seem to be any significant horizontal overlaps.  Microsoft is not a major social media player and LinkedIn is not a provider of operating systems or business software.  Nor do there seem to be any obvious vertical issues.  You don’t need Windows to create an online social network and LinkedIn’s network is not a critical input for competitors to Microsoft’s software business.

The transaction has been hailed as a merger of complements.  LinkedIn gives Microsoft access to data in relation to a readymade network of users for Microsoft’s cloud-interoperable programs.  You can see how the deal would make Microsoft’s products more useful to the LinkedIn community because they would be able to share them with their connections.  It could serve as a counterbalance to cloud-based programs such as Google Docs that can benefit from an established network of users.

So, is there an antitrust problem if Microsoft acquires LinkedIn information on who you are connected with?  An obvious point is that merely having access to personal data - even vast amounts of it - is not to be equated with economic market power.   However, this has not stopped regulators on both sides of the Atlantic venturing theories on the competition law implications of ‘Big data’ and whether existing legal tools including merger control are adequate to address new situations.  The Microsoft-LinkedIn tie-up is of relatively limited interest when approached through the traditional antitrust toolkit.  It is hoped that the merger control authorities keep those principles firmly in sight when looking at the data aspects.

European Commission probes Romanian natural gas sector

The European Commission confirmed on 7 June that it has carried out dawn raids at the premises of Romanian natural gas companies on suspicion that they have engaged in anticompetitive practices that hinder natural gas exports to other member states and/or that they abused their dominant market position.

Few details are available of the scope of the investigation at this stage, although the Romanian state-owned company Transgaz has confirmed that was raided.  Natural gas producer OMV Petrom has also stated that it was subject to an inspection.

The raids are not the only ongoing investigation by the European Commission into natural gas exports.  In April last year the Commission issued a statement of objections to Gazprom alleging that it had hindered cross-border trade with eight other member states. The Commission maintains that Gazprom charged unfair prices and restricted its customers from selling gas outside their territory, as well as demanded concessions that did not properly relate to Gazprom’s transport infrastructure.  In September, Gazprom’s deputy chief executive reported that the company had submitted a proposed settlement to the Commission but the investigation has not reached a conclusion.

The latest raids in Romania show that Commission’s competition law interest in the energy sector has not waned but appears to have shifted eastwards as illustrated in cases involving Gazprom, CEZ, Bulgarian Energy and OPCOM.  In many respects the lines of inquiry pursued in these cases resemble those in other post-sector inquiry probes.  However, one particular line of inquiry that is unprecedented in the Gazprom case is the allegation that it is abusive for a dominant company to insist on prices that are indexed to oil prices.  It is not clear whether that allegation is being pursued in the Romanian case.  Since the majority of these energy sector competition cases have been resolved using commitments, their precedent value is likely to be more limited.  Until they are challenged successfully before the EU Courts, the case law experience is likely to give further impetus to investigations at EU and national level as well as private law challenges on the back of similar theories of alleged harm.  

#VOOM 2016 - The Professionals

#VOOM 2016 – Suzanne Rab selected as one of the Professionals

Suzanne Rab, Competition Law barrister at Serle Court Chambers has been selected to help Sir Richard Branson’s #VOOM 2016 team find the cream of entrepreneurs from across the UK and Ireland.

Out of a pool of 15,000 applicants Suzanne will be one of 12 experts selected from a range of disciplines including law, marketing, accountancy, mentoring and entrepreneurship to be #VOOM 2016 professionals.  As a member of this team, she will play an integral part in every stage of the selection process.  At the 29 hour Pitchathon on 1 and 2 June the judges will whittle 160 shortlisted entrants down to 40 semi-finalists.  These businesses all have their sights on the Live Finale on 28 June, where six finalists will pitch to Sir Richard Branson and win a share of £1 million in prizes.

Further details can be found at:

https://www.vmbvoom.com/professionals

CMA fines refrigerator supplier for price maintenance

The Competition and Markets Authority (CMA) has fined fridge supplier ITW Ltd over £2 million for breaching competition law by restricting dealers from offering online discounts.  The decision confirms the CMA’s focus on tackling competition law breaches in the e-commerce sector.

The CMA issued a statement of objections to ITW in January 2016 and at that time also issued objections against bathroom suppliers for similar practices.  Last month the CMA imposed a £826,000 fine on the bathroom suppliers.

ITW admitted that its fridge business unit Foster Refrigeration was involved in resale price maintenance in the online sales of commercial refrigerators between 2012 and 2014.  According to the CMA, Foster Refrigeration set minimum price floors and sanctions if the dealers failed to comply including cutting off supplies or charging them higher prices for fridges.

The fine imposed on Foster reflects a 10 per cent reduction due to ITW agreeing to set up a compliance programme and a 20 per cent reduction for the company’s cooperation with the CMA’s investigation.

The CMA has stated that it has warned 20 other commercial catering businesses that they may have been involved in similar restrictive practices relating to online sales.  It appears that these warnings have been sent to dealers who may have agreed to the restrictions and not only to the suppliers imposing them.  The fact that the CMA has not fined the dealers in these cases may suggest that if similar practices occur in the future, dealers may not get off as lightly.

CMA press release 24 May 2016:  https://www.gov.uk/government/news/fridge-supplier-fined-22-million-for-restricting-online-discounts