European Commission accepts commitments from Amazon to end marketplace and Buy Box probes

 

European Commission accepts commitments from Amazon to end marketplace and Buy Box probes

The European Commission has decided under Article 9 of Regulation 1/2003, to accept commitments offered by Amazon, to address competition concerns in two investigations.

The first concerns the Amazon Marketplace where the Commission had provisionally concluded that Amazon's use of sensitive data from independent retailers violates Article 102 of the TFEU.

The second concerns Amazon Buy Box and Prime where the Commission had provisionally found that the arrangements for the Buy Box and Prime unduly favour Amazon's own retail and connected businesses.

Following consultation on proposed commitments in July 2022 the Commission has now decided to accept revised commitments.

Among the commitments Amazon has agreed that it will: 1) refrain from using non-public data relating to, or derived from, the activities of independent sellers on its marketplace, for its competing retail business; 2) apply non-discriminatory conditions and selection criteria for offers to appear in the Buy Box; 3) set non-discriminatory conditions and criteria for the qualification of marketplace sellers and offers to Prime; 4) refrain from using any information obtained through Prime about the terms and performance of third-party carriers, for its own logistics services.

Amazon must implement the commitments by June 2023. Some are heralding the commitments as a win for Amazon as the Commission rarely reverts to a commitments procedure after the issue of a statement of objections.

Meanwhile, the UK Competition and Markets Authority also launched a parallel abuse of dominance investigation into Amazon’s use of merchant data and the criteria for sellers to appear in its Buy Box.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_7777

CMA finds BMW for failure to respond to information request in competition investigation

 

CMA finds BMW for failure to respond to information request in competition investigation

The Competition and Markets Authority (CMA) has imposed a fine on BMW AG for failing, without reasonable excuse, to comply with a formal request for information issued under section 26 of the Competition Act 1998. The CMA has imposed a fixed penalty of £30,000 and a daily penalty of £15,000 (the maximum amounts possible), which it considers to be appropriate and proportionate in this case.

The CMA issued an information request to BMW AG in its ongoing investigation into whether certain vehicle manufacturers and trade associations have breached the Chapter I prohibition of the Competition Act 1998 as a result of anti-competitive practices relating to the use of recycled materials in cars and the associated arrangements for recycling old or written-off vehicles.

The CMA believes that elements of the arrangements were agreed outside but implemented in the UK.  The CMA formally required information from BMW Group, including its parent company BMW AG.

The wider BMW Group failed to respond to the CMA’s information request claiming that the CMA does not have jurisdiction to request information from a non-UK company. The CMA refutes this claim and considers that BMW AG has intentionally failed to provide information that is important to the CMA’s investigation.

The daily penalty will continue until BMW Group provides the requested information, the CMA issues an infringement decision or the case is closed.

Should the Digital Markets, Competition and Consumer Bill be passed in is current form, which is expected early next year, the CMA will be able to impose fines of up to 1% of a company’s global turnover if they fail to comply with information requests.

The case is interesting in a post-Brexit environment where the CMA can no longer rely on the arrangements for cooperation within the European Competition Network which allow EU competition authorities to obtain information from companies located in another Member State.

 

https://www.gov.uk/government/news/bmw-fined-for-failing-to-comply-with-cma-information-request

CAT adds season ticket holders to train operators collective action

 

CAT adds season ticket holders to train operators collective action

The Competition Appeal Tribunal has granted a request by Justin Gutmann to include season ticket holders in his £93 million collective action against two train operators -  South Western Railway and London & South Eastern Railway - for allegedly overcharging commuters travelling outside of London.

The CAT rejected the defendants’ objections to the amendment and warned against over-complicating the class definition in an attempt to try to exclude certain categories of case where loss had been incurred.

The CAT noted that, in view of the wide range of tickets and the wide variety of individual circumstances in which rail tickets are purchased, it would not be productive to seek more elaborate refinement of the class definition at this stage.

Justin Gutmann v London & South Eastern Railway Limited and Justin Gutmann v First MTR South Western Trains Limited and Stagecoach South Western Trains Limited, [2022] CAT 49, ruling on amendment, 10 November 2022

Permission to appeal partially granted in trucks cartel litigation

 

Permission to appeal partially granted in trucks cartel litigation

The Competition Appeal Tribunal (CAT) has granted limited permissions to appeal in challenges brought in the UK trucks cartel litigation (UK Trucks Claim Limited v Fiat Chrysler Automobiles N.V. and Others and Road Haulage Association Limited v Man SE and others).

In June 2022 the CAT granted and refused collective proceedings orders (CPO) in the claims, under section 47B of the Competition Act 1998.

The litigation follows on from the European Commission’s 2016 trucks cartel decision.

The CAT previously ruled that both the UK Trucks Claim (UKTC) and Road Haulage Association (RHA) claims were suitable for collective proceedings, but the RHA opt-in claim was more practical despite more risks from a funding perspective.

UKTC sought permission to appeal the ruling on the basis that the CAT had incorrectly refused the opt-out application or should have accepted it to the extent not covered by the RHA opt-in application.

While the CAT dismissed the majority of the UKTC appeal grounds, it granted permission to appeal based on the assessment of the inclusion of new and used trucks in the RHA class definition, and the argument that if the RHA CPO had been confined to used trucks only, it should be considered whether the UKTC application should be allowed.

The CAT did not say that it had erred in its conclusion but reflected that it had considered multiple applications.  At this relatively new time in the development of the UK class action regime, the CAT considered this merits review by the Court of Appeal.

The CAT also granted defendants MAN and DAF permission to appeal against the certification decision on one limited ground relating to the suitability of the RHA’s claim to proceed on a collective basis.

As a result, the CAT stayed the opt-in collective damages claim to allow the competing claimant group to challenge its certification decision.

UK Trucks Claim Limited v Fiat Chrysler Automobiles N.V. and others and DAF Trucks NV and others and Road Haulage Association Limited v MAN SE and others and Daimler AG [2022] CAT 48, ruling (permission to appeal)

Twin antitrust probes into Google’s Play Store

 

Twin antitrust probes into Google’s Play Store

Google has confirmed that the European Commission is investigating its Play Store in an abuse of dominance inquiry.

This confirmation was made in a filing to the US Securities and Exchange Commission. It comes on the heels of the launch by the UK Competition and Markets Authority of a similar probe in June.  The European Commission has not yet confirmed its investigation at this stage, although it is usual for it to announce the opening of a formal investigation.

It appears that the Commission’s investigations relates to Google’s requirement that app developers use its own payment system or they will be removed from the App Store.  A similar theory of harm runs through the statement of objections that the Commission sent to Apple in 2021 concerning the music streaming market.

The CMA’s latest probe into Google’s Play Store is accompanied by its final report in its mobile ecosystem market study.  This found that Apple and Google have a ‘stranglehold’ over certain markets due to their effective duopoly in mobile ecosystems.

Google has also confirmed that it is bringing an appeal to the European Court of Justice against the General Court’s finding that upheld the major part of the Commission’s Google Android decision.

Google also confirmed in its regulatory filing that it is appealing to the European Court of Justice against the General Court’s ruling last month that largely upheld the commission’s Google Android decision.

https://app.quotemedia.com/data/downloadFiling?webmasterId=90423&ref=117011882&type=HTML&symbol=GOOGL&companyName=Alphabet+Inc.&formType=10-Q&formDescription=General+form+for+quarterly+reports+under+Section+13+or+15%28d%29&dateFiled=2022-10-26&CK=1652044

European Commission issues statement of objections in abusive patent filing case

 

European Commission issues statement of objections in abusive patent filing case

The European Commission has sent a statement of objections to Teva alleging that it has abused its dominant position contrary to Article 102 TFEU through conduct that is intended to block or delay competition with its multiple sclerosis drug, Copaxone.

The Commission has made a provisional finding that Teva engaged in abusive practices in the markets for glatiramer acetate which is the active ingredient in Copaxone, in Belgium, Czechia, Germany, Italy, the Netherlands, Poland and Spain.

Teva's basic patent for glatiramer acetate expired in 2015.  The Commission contends that Teva has artificially extended patent protection for Copaxone by strategically filing and withdrawing secondary patent applications (for divisional patents).  According to the Commission this caused competitors to have to bring new legal challenges which delayed their market entry with an alternative.

The exclusionary effect of (patent) filing strategies on competition between incumbents and new entrants was examined in detail by the Commission as early as 2008 in its Pharmaceutical Sector Inquiry.  It is not surprising that owners of patents develop commercial strategies that are aimed at and have the effect of extending the breadth and duration of their IPR protection which affects the ability of new entrants to enter and expand on the market. The question is whether this is abusive.

A dominant company may not use regulatory procedures in such a way as to prevent or make more difficult entry of competition in a market, unless it can as an undertaking engaged in competition on the merits, rely on grounds relating to the defence of legitimate interests or objective justification.

The case has some parallels with the Commission’s finding that AstraZeneca infringed Article 102 TFEU through two practices: (1) making misleading representations before the national patent offices and before the national courts in order to obtain supplementary protection certificates for its Losec drug (which extend patent protection); and (2) filing requests for deregistration of marketing authorisations combined with the withdrawal from the market of Losec capsules with the intent of blocking the entry of generic products or preventing parallel trading. C-457/10 P AstraZeneca v Commission, ECLI:EU:C:2012:770

The Teva case represents an uptick in the Commission’s enforcement strategy against abusive conduct in the context regulatory procedures in the pharma sector.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_6062

 

 

Ofcom launches market study into cloud services

 

Ofcom launches market study into cloud services

Ofcom has launched a market study into the provision of cloud services in the UK.

Cloud services are services related to the provision of remote access to computing resources (compute, storage and networking).

The main suppliers of cloud services in the UK are Amazon Web Services, Microsoft and Google (known and ‘the hyperscalers’).

Cloud services are important to businesses across the economy, especially in telecoms and broadcasting.  Ofcom wants to examine whether there is any feature of the market that could limit competition and harm consumers and intends to focus on the ‘public cloud’.  It will consider whether any feature of the market might favour the hyperscalers and make it more difficult for others to enter and expand.

Ofcom seeks comments including on whether it should make a market investigation reference to the Competition and Markets Authority, by 3 November 2022.

Ofcom expects to publish an interim report for consultation in around six months’ time.

Ofcom says that it is doing this as part of a new programme of work to ensure that digital communications markets are working well for people and businesses in the UK.

 

https://www.ofcom.org.uk/consultations-and-statements/category-3/cloud-services-market-study