What is the Wrongdoing in Cartels? A Response to Blog Posts by Stephan and Whelan

(by Angus MacCulloch, Lancaster University) The future of the UK’s cartel offence has been the subject of much debate, including excellent contributions via the CCP blog by Andreas Stephan and Peter Whelan, since the publication of the BIS’s response to their consultation on competition reform. One of the main features of that debate has surrounded the position of the dishonesty element within the offence. Many responses to the consultation, particularly those involved with the defence bar, supported the continuing usefulness of dishonesty. The majority of academic opinion appears to be in favour of its removal from the offence; however, there is less consensus how the offence should be changed in light of its removal. This lack of consistency indicates to me that fundamental questions may still need to be addressed.

Will IMF Requirement that Ireland Strengthen Competition Law Sanctions Actually Make a Difference?

(by Andreas Stephan) The Republic of Ireland is facing the most serious economic crisis in its history. In order to deal with its sovereign debt crisis, it has had to accept a painful and far reaching Programme of Financial Support from the EU and the IMF. As part of this, Ireland is required to “introduce reforms to legislation to empower judges to improve fines and other sanctions in competition cases in order to generate more credible deterrence” (p24). This is an odd requirement for a country which is arguably ahead of the UK and other larger EU Member States in the development of its competition enforcement regime. It raises the question of whether higher competition sanctions really will make a difference to the Irish recovery.

Grolsch Cartel Fine Annulment: Should Parent Companies Pay for the Anti-Competitive Conduct of a Subsidiary?

(by Andreas Stephan) The General Court has annulled a €36.6m fine imposed on Grolsch for the price fixing of beer in Holland. In its decision, the European Commission had treated Koninklijke Grolsch NV and its subsidiary as a single economic entity and calculated fines accordingly.  This is important.  The maximum fine is capped at 10% of turnover and the parent company combines the sales of many subsidiaries.  Taken at face value, the Court ruling could substantially reduce fines and so also their deterrence effect.  

Who should pay for competition law enforcement?

(by Morten Hviid) Who should pay for the enforcement of competition law?  The current UK consultation suggests that in the main it should be [some of] the users. When considering how to finance enforcement, however, it is important to remember that this delivers positive externalities.

Separating Consumer Protection from Competition Enforcement: ‘if it ain’t broke, why fix it?’

(by Pinar Akman) Part of the UK government consultation on reform of the competition regime relates to whether the merged Competition and Markets Authority (CMA) should have ‘a clear principal competition focus’. As one reads on, it appears that the issue really is whether the CMA should have no consumer protection role at all and only have competition law powers. The Government believes that the scope of the activities of the CMA should not include any consumer powers or functions. It provides no substantive justification for this view.  Depriving the CMA of consumer powers and functions is alarming. Why?