[by Tola Amodu] Many years ago, there was an advertisement on TV suggesting that a certain alcoholic beverage – those showing their age will know which one – “refreshed the parts other beers cannot reach”. In a similar vein, it is just possible that the Competition and Markets Authority will manage to do something similar in the case of the sale of leasehold houses. The recent CMA report probing the activities of house builders and developers has focused on the unfair treatment of homeowners and the possible misleading of prospective buyers. Will the CMA be more effective than specific legislation for redressing the problem? Read the rest of this entry »
(By Peter Ormosi and Andreas Stephan) When the escalation in Covid-19 sparked panic buying and shortages of key products, UK supermarkets asked the government to consider suspending competition law, to allow them to co-ordinate supplies and reduce shortages. On 25 March 2020, the UK’s Competition and Markets Authority (CMA) published a document stating that,
Throughout the UK, business are… providing essential goods and services to consumers, to ensure key workers can carry out their important tasks and in getting the country through this crisis. The CMA understands that this may involve coordination between competing businesses. It wants to provide reassurance that, provided that any such coordination is undertaken solely to address concerns arising from the current crisis and does not go further or last longer than is necessary, the CMA will not take action against it. (paras 1.4 and 1.5)
This blog piece examines the consequences of providing this reassurance and asks whether it is a good idea. Read the rest of this entry »
Is Furman right to propose ex ante platform regulation as the best way to address competition concerns in the digital economy?April 24, 2019
(by Elias Deutscher) Last month, the Digital Competition Expert Panel, chaired by Professor Jason Furman, published its report ‘Unlocking digital competition’ (the ‘Furman report’). The report had been jointly commissioned by the Chancellor of the Exchequer and Business Secretary due to concerns about prevailing high levels in industry concentration, the accumulation of data in the hands of a handful of players and the rise of a few vertically integrated super-platforms. The same concerns have fuelled a European-wide policy debate about the challenges of competition law enforcement in the digital economy (e.g. by the German Federal Ministry for Economic Affairs and Energy and the European Commission).
The Furman report singles out the strategic importance of data and the gatekeeper function of intermediary platforms as central features of digital competition and the most important challenges for competition policy. These features make digital markets more prone to tipping in favour of a few powerful incumbents. Amongst other recommendations, the report proposes to address these concerns through the creation of a specific ex ante regulatory regime for digital platforms. While it outlines some of the basic features of the proposed new regulation, the report omits to clearly set out the underlying rationale and implications of such a regime. It also gives little guidance on its exact scope and implementation. Most importantly, it remains unclear whether the proposed framework will apply only to large, dominant firms, or also to smaller, non-dominant platforms. Read the rest of this entry »
(by Bruce Lyons) I recently posted a blog commenting on the CMA’s proposals for reform. I was sympathetic with the aims of eliminating unfair pricing and inefficient decision processes. However, I was highly critical of the CMA’s direction of travel and the worrying side effects of their proposals. I suggested two alternative proposals that would directly address the aims without the harm. In this short blog, I pick up two “facts” used by Lord Tyrie, Chairman of the CMA, to motivate the need for reform. These are particularly important because they relate to exactly the type of statistical evidence relied on by the CMA in its daily competition analysis: concentration and margins. Read the rest of this entry »
(by Bruce Lyons) The Chairman of the CMA, Lord Tyrie, has written a 44-page letter (including annex) to the Secretary of State for Business, Greg Clark, setting out a long list of legislative proposals. Two motivations are given: “First, the growth of new and rapidly-emerging forms of consumer detriment, caused in part by the increasing digitalisation of the economy, requires more rapid intervention, and probably new types of intervention… Second, there are increasing signs that the public doubt whether markets work for their benefit.” I agree with the spirit of these points and that they require action. However, I disagree with some of the CMA’s key proposals. Lord Tyrie appears particularly frustrated with the lengthy appeals system which limits his ability to act firmly and swiftly. Unfortunately, the overall package of proposals would reverse hard-won progress in competition policy over the last 20 years and lead to a paternalistic, arbitrary and unrestrained Consumer Interest Authority. In this blog, I briefly explain some of my concerns. I then set out two alternative proposals that would more directly and appropriately address public concerns over unfair pricing and result in better decisions without prolonged appeals. Read the rest of this entry »
(by Paul Dobson in the spirit of summer) This post is a reminder to all our readers to be vigilant in spotting monopoly practices on your own doorsteps. I report on my quick investigation into a potential abuse of local monopoly power. The case involves the independent Norwich toy retailer Langley’s, which has been trading since 1883 and has achieved a monopoly of specialist city centre toyshops. It is now openly boasting in its shop window that the board game Norwich Monopoly is exclusive to them, and charging £34.99, as the following photo shows: Read the rest of this entry »
Competition Law and State Aid in the ‘Brexit White Paper’: sensible alignment or unworkable proposals?July 26, 2018
(by Andreas Stephan) In a previous blog post, I wrote of the UK Prime Minister’s unexpected discussion of Competition and State Aid, as two areas of policy where the UK’s Laws might remain “identical” to those of the EU, and where UK courts would “continue to look at” the Court of Justice of the European Union’s (CJEU) judgements. Following a dramatic few weeks in which the UK Government finally set out an agreed approach to its Brexit negotiations with the EU, a 104 page White Paper was published putting some flesh on the principles agreed by ministers. In this blog post, I discuss the extent to which the proposals on Competition and State Aid are workable.