An Unpopular Solution to the Private Enforcement Problem

(by Andreas Stephan) The UK’s Department for Business is currently consulting on a package of reforms aimed at making it easier to bring private actions for damages against firms engaged in anti-competitive behaviour. Compensating consumers harmed by cartels and abuse of dominance is something competition authorities throughout Europe feel is important. However, the price to pay for private actions is the potentially enormous transaction costs of legal representation and economic evidence, coupled with the danger of scuppering public enforcement by undermining the leniency programme. One solution not considered in the current debate is to internalise compensation claims within competition authorities, drawing awards from public fines.

Breaking the deadlock? Private antitrust enforcement in the UK

(by Sebastian Peyer) Private antitrust enforcement in the UK has never got off the ground, even after the Competition Act of 1998 introduced enforceable antitrust provisions. Plaintiffs have not been able to secure a final judgment awarding damages for anticompetitive conduct, and very few injunctions based on competition law have been successful before UK courts. The consumer organisation Which? brought the only consumer group action joining fewer than 0.1 percent of the affected consumers and before settling the case with JJB Sports. An attempt by Emerald Supplies to establish a representative action under the existing Civil Procedure Rules failed.  Against this background of unsuccessful private enforcement, the UK Department for Business Innovation and Skills (BIS) this week launched its consultation on private actions in competition law.  Reform is long overdue, but have they got it right?

A Rebuttable Presumption of 20% Price Rise for Damages against Proven Cartels?

(by Bruce Lyons)  The UK Government yesterday published a consultation on private actions in competition law.  It includes a suggestion that there should be a rebuttable presumption that the cartel has resulted in higher prices.  20% is offered as a possible presumed increase due to the cartel.  This is an excellent idea and should be widely supported.  The only room for debate should be over the precise presumption to adopt and whether to extend this approach beyond cartels.

BIS and the Cartel Offence: A Reasonable Attempt to Compensate for the Rejection of Dishonesty

(by Peter Whelan) A recent post on this blog argued that, in relation to the UK Cartel Offence, we should put the definitional element of dishonesty ‘to bed’ following the publication of BIS’s response to its consultation on the UK competition regime. I agree with the sentiments expressed concerning ‘dishonesty’ and believe that that particular definitional element should be removed from S 188 of the Enterprise Act 2002.  What surprises me however is that the vast majority of those who commented on the BIS proposals concerning the Cartel Offence are not in agreement: on my count, 33 contributors (out of 49) provided express support for the continued employment of the mens rea of dishonesty in the UK Cartel Offence.  

The UK Cartel Offence: Farewell Dishonesty…

(by Andreas Stephan) As part of the far reaching competition reforms announced by the UK Government this week, the Cartel Offence will no longer require the prosecution to show that cartelists acted dishonestly in order to secure a conviction (pp 66-77). Some commentators have suggested this move could result in miscarriages of justice. It is in fact the most positive reform to come out of the Government’s review.