Reckless Bank Saved by the Taxpayer Will Now Pay Cartel Fine

March 30, 2010

(by Andreas Stephan) British bank, Royal Bank of Scotland (RBS), has agreed to pay a fine of £28.6 million for price fixing. RBS employees shared confidential pricing information concerning commercial loans, with their counterparts at Barclays, who apparently adjusted their own pricing accordingly. The fact that RBS is 84% nationalised means that the OFT is effectively fining the taxpayer. Nevertheless, they should be applauded for not abandoning important enforcement principles. Read the rest of this entry »

Vertical Agreements in the Automotive Industry and How Competition Law Got Me £1000 Off a New Car

March 22, 2010

(by Andreas Stephan) Vertical agreements in the car industry continue to be treated more restrictively by EU competition law, than agreements falling under the general verticals block exemption. My experience of buying a new car has been an education in why the car industry should continue to be treated differently. Read the rest of this entry »

Good News for Public Health – Court Prohibits Minimum Tobacco Prices

March 16, 2010

(by Bruce Lyons)  Europe’s highest court last week decided against the governments of Austria, France and Ireland who have each adopted minimum retail price legislation for tobacco in an attempt to reduce smoking.  At first sight, the Court’s decision may appear to be a blow against public health, but in truth it should be seen as a victory for those who want to use the price system efficiently to control smoking. Read the rest of this entry »

Should BT’s Pensions Deficit be Allowed to Raise Regulated Prices?

March 2, 2010

(by Bruce Lyons)  The perennial question in the regulation of monopoly prices is: what cost increases should a typically ill-informed regulator allow to be passed through to customers?  BT wants to be able to recover at least part of its £8.8b pensions deficit by getting Ofcom to raise the wholesale access prices it can charge downstream rivals for broadband and telephone lines.  In practice, this would raise the ‘X’ factor in the standard RPI + X regulatory formula.*  BT claims that changes in government pensions policy and increased longevity lie outside its control. It points out that other businesses are also affected.  BT’s regulatory contract currently takes no account of either pension deficit payments or previous pension holidays.  Ofcom responded by consulting with ‘stakeholders’, thus implying they saw possible merit in BT’s case. Read the rest of this entry »