Competition and Markets Authority publishes online reporting form

 

Competition and Markets Authority publishes online reporting form

 

The Competition and Markets Authority has published a new "Contact the CMA" web page for informing the CMA about issues with a business, a market, or to provide information and evidence about a new or existing case.

Users should give a description of the issue and any supporting evidence and details about the person submitting the information and, if applicable, their organisation.

The information provided will be used by the CMA and other organisations to monitor and possibly take action to stop unfair business practices.

Information can be submitted anonymously or with contact details.

The service should not be used for advice or whistleblowing. It should also not be used for making a leniency application (i.e. reporting the business’s own cartels) and for which there is a separate reporting form.

https://www.gov.uk/guidance/contact-the-cma

Competition and Markets Authority opens new investigation into anticompetitive practices in supply of fragrances

 

Competition and Markets Authority opens new investigation into anticompetitive practices in supply of fragrances

 

The Competition and Markets Authority (CMA) has opened an investigation into suspected violations of the Chapter I prohibition of the Competition Act 1998 by suppliers of fragrances and fragrances ingredients.

The CMA has also been in contact with other antitrust authorities around the world including the Antitrust Division of the US Department of Justice, the European Commission and the Swiss Competition Commission in the same case.  The probe has been launched in consultation with those authorities.

The European Commission announced its probe into the same matters at the same time as the CMA.

The CMA will be progressing its investigation including information gathering until early 2024.

The investigation is an example of the increasing trends of cross-border cooperation of authorities in competition and regulatory probes, many of which have local dimensions as well as impacts on global supply chains.

https://www.gov.uk/government/news/cma-launches-investigation-into-fragrances-and-fragrance-ingredients

Collective action against Meta is refused certification but given opportunity to amend

 

Collective action against Meta is refused certification but given opportunity to amend

The Competition Appeal Tribunal (CAT) has given judgment on an application for a collective proceedings order (CPO) under section 47B of the Competition Act 1998, against Meta Platforms, Inc, Meta Platforms Ireland Limited and Facebook UK Limited (Meta).

The proposed collective proceedings would combine opt-out stand-alone claims for damages caused to a class of UK users of Facebook between February 2016 and December 2019.

Meta is alleged to have abused its dominant position contrary to Chapter II of the UK Competition Act 1998.  The allegedly abusive conduct comprises the imposition of terms and conditions imposed on Facebook users that require them to disclose personal data that is unnecessary and disproportionate.  It is further alleged that Meta has charged an unfair high price by requiring the disclosure of valuable personal data for the provision of social networking services.

The CAT found that the expert methodology relied on by the proposed class representative for establishing loss on a class-wide basis was inadequate and it was unable to grant a CPO.  However, the CAT has ordered that the application be stayed for six months so that the proposed class representative can reassess the methodology and file new evidence.

Dr Liza Lovdahl Gormsen v Meta Platforms, Inc and others [2023] CAT 10

Damages awarded in first UK trucks cartel competition damages action

 

Damages awarded in first UK trucks cartel competition damages action

The Competition Appeal Tribunal (CAT) has awarded follow-on damages in actions brought by Royal Mail and BT against DAF Trucks.

The CAT has ordered DAF to pay approximately £17.5 million in damages to Royal Mail and BT.  The case is a landmark judgment representing the UK’s first successful follow-on damages claim against a participant in the EU trucks cartel.

The claims are based on the July 2016 settlement decision of the European Commission finding that certain EEA manufacturers of trucks were engaged in a cartel in breach of Article 101 of the TFEU over a 14-year period (broadly, 1997-2011). 

The Commission found anti-competitive conduct which consisted of coordination amongst the participating undertakings in respect of the EEA gross list prices for medium and heavy trucks.

The claimants claimed damages in the form of the increased prices and lease payments that they paid for those trucks which were higher than they would have been without the infringement (the ‘overcharge’).

The CAT found that DAF is liable to be assessed for an overcharge at 5% for both claimants on their value of commerce over the whole of the relevant period.

The CAT rejected certain of DAF’s defences including as to resale pass-on.

The CAT has invited the parties to calculate the damages including interest and tax based on its findings.

The value of the overcharge found by the CAT is quite high given that the value of relevant trucks can range from £60,000 to £300,000 over the period.

The ruling is likely to embolden other trucks cartel claimants whose claims remain to be heard and fuel the growing momentum of competition damages claims in the UK.

 

Royal Mail Group Limited v DAF Trucks Limited and others and BT Group PLC and others v DAF Trucks Limited and others [2023] CAT 6

European Commission consults on draft regulation on foreign subsidies

 

European Commission consults on draft regulation on foreign subsidies

The European Commission has launched a consultation on a draft implementing regulation for the conduct of proceedings under Regulation 2022/2560 on foreign subsidies distorting the internal market (the Foreign Subsidies Regulation).

The Foreign Subsidies Regulation gives the Commission new powers to investigate and impose redress arising from financial contributions granted by third (non-EU) countries to companies engaged in economic activity in the EU. 

It imposes an obligation for companies to notify the Commission of certain concentrations and involvement in public procurement procedures which have foreign financial contribution elements.

The new rules will require merging companies to notify their mergers from 12 October, 2023 provided one of the parties has a turnover of at least EUR500 million and the transaction involves a foreign financial contribution of at least EUR50 million.

Companies will also be obliged to notify their participation in public procurement tenders in cases where the estimated contract value exceeds EUR250 million and the bid involves a foreign financial contribution of at least EUR4 million.

The draft regulations set out the procedural requirements of the new regime. It is hoped that guidance on how the Commission will approach issues of substance will be available soon. The approach in the proposed notification form appears to shift the burden to companies to establish the absence of a subsidy or its distortive effects.

The Regulation will be effective from 12 July 2023 when the Commission will be able to start its own investigations.

The notification obligation for companies will be effective as of 12 October 2023.

The Commission invites responses to the consultation by 6 March 2023.

 

https://ec.europa.eu/commission/presscorner/detail/en/ip_23_591

Financial Conduct Authority issues statement of objections in money transfer price fixing case

 

Financial Conduct Authority issues statement of objections in money transfer price fixing case

The Financial Conduct Authority (FCA) has issued its second known statement of objections alleging that three international money transfer service providers violated competition law when they colluded to set the rates they charged Scottish customers for wiring funds to Pakistan.

A statement of objections gives firms notice that the FCA considers that they have infringed competition law and the opportunity to respond by making written and oral representations.

The FCA’s statement of objections was addressed to the Glasgow branches of Dollar East, Hafiz Bros Travel & Money Transfer and LCC Trans-Sending and accused the companies of price fixing for the conversion of pounds to Pakistani rupees between February and May 2017.

The FCA further maintains that the companies conspired to fix the flat rate transaction fee they charged customers for sending money to Pakistan through the service operated by LCC Trans-Sending’s parent company, Small World Financial Services Group.

Since 1 April 2015, the FCA has had concurrent competition law enforcement powers, including powers under the Competition Act 1998 and the Enterprise Act 2002 in relation to the provision of financial services.

The FCA has launched five investigations into potential competition law breaches since it gained concurrent competition powers.  However, the FCA has only ever proceeded to the statement of objections state in one other case that concluded with fines in 2019.

The FCA notes that the alleged infringements meant that customers in Glasgow may have been overcharged for the relevant transactions.  It may be that the FCA is using a relatively localised case to reinforce the message that competition law applies across and within the UK.

https://www.fca.org.uk/news/press-releases/fca-issues-statement-objections-3-money-transfer-firms#:~:text=A%20statement%20of%20objections%20gives,the%20law%20has%20been%20broken

CMA intends to launch a market study into house-building

 

CMA intends to launch a market study into house-building

The Competition and Markets Authority has informed the Secretary of State at the Department for Levelling Up, Housing and Communities, that it intends to launch a market study into the housebuilding sector.

Market studies are industry wide probes where there are concerns that markets may not be working as well as they should but where the problem does not appear to be related to unlawful action by individual companies.  However, they can result in remedies that are intrusive, including changes in legislation or a wider market investigation.

The CMA has been conducting consumer work in relation to unfair practices connected with leasehold homes.  It expects that the promotion of competition in the accommodation sector will be a focus area over the next year.

The CMA considers that a market study into the housebuilding sector will be core to securing the right environment for delivering homes to people in need.

The proposed market study is aligned with the CMA’s goal to "consistently focus action on the core areas of consumer spending and time" as set out in the CMA's draft Annual Plan 2023/24.

The CMA’s focus for its market study is not surprising against the backdrop of the cost-living crisis and its work on consumer protection.   It also aligns with the government's support for the CMA's consideration of a market study in the housebuilding sector set out in the Secretary of State’s letters of May and November 2022.

It is expected that a formal proposal to launch a market study will be put to the CMA Board in the coming weeks.  Meanwhile, builders and providers to the housebuilding sector and other interest groups including advisers to consumers will want to follow these developments to determine where their interests lie and how they can engage with the study.

https://www.gov.uk/government/publications/letter-from-sarah-cardell-to-rt-hon-michael-gove-mp-on-homebuilding