Yes European Competition Law Enforcement is Open to Abuse, But at Least Firms in Europe Can Appeal

(by Andreas Stephan) An article and accompanying editorial in last week’s The Economist were very critical of the European Commission’s enforcement of competition law.  They argue that the combined roles of prosecutor, judge and jury make the system open to abuse. The authors point to the merits of US criminal antitrust enforcement where they suggest antitrust officials must ‘make [their] arguments in an open court’. What they fail to point out is that European firms can at least appeal a Commission decision. In the US, as many as 90 per cent of US defendants circumvent trial by striking plea bargains; waiving their rights to appeal and negotiating with the US Department of Justice in a closed process, not entirely unlike haggling for a rug at an Istanbul market.

Abuse of Indigestion: Whistleblower in TV Programme Triggers OFT Investigation

(by Andreas Stephan) Today, the UK’s Office of Fair Trading (OFT) issued a statement of objections against Reckitt Benckiser (RB), alleging abuse of a dominant position in its sales of popular heartburn remedy, Gaviscon, to the public health service (NHS). What makes this case different is that it was triggered by a whistleblower appearing in BBC’s Newsnight programme in 2008.

Reforming Actions for Antitrust Damages in Europe: Don’t Worry, But Better Not To Be Too Happy

(by Sebastian Peyer) Speaking at the European Parliament last month, the new European Commissioner for Competition, Joaquín Almunia, disappointed those who had hoped for a stop to the contentious reforms of private actions for damages in Europe. However, the Commissioner did say he wants to carefully explore such actions; keen to ensure sufficient safeguards circumvent the pitfalls of the US system. So what does the immediate future hold for private actions in Europe? Should businesses be worried and potential plaintiffs be optimistic?

British Supermarket Sues Former Employees and Directors for Antitrust Damages

(by Andreas Stephan) British supermarket Morrisons are suing eleven former employees (among them directors) for damages in connection with a cartel fine imposed by the Office of Fair Trading on Safeway group, acquired by Morrisons in 2004. They allege that the individuals breached their fiduciary duties by involving their employer in an illegal anticompetitive agreement. One of the individuals – David Webster, former chairman of Safeway – received almost £2m when Morrisons and Safeway merged. He is now the chairman of InterContinental Hotels. As the FT have put it, “now the company is looking for a payday of its own” as it tries to offset any damages recovered, against the fines Safeway agreed to pay the OFT.