No Smoke Without Fire? Was the CAT right to quash the OFT decision on the alleged tobacco price fixing conspiracy?

December 16, 2011

(by Bruce Lyons) On 16th April 2010, the OFT imposed a record total fine of £225m on two tobacco companies and ten retailers who they decided had engaged in practices that breached competition law.  The heart of the case was around ‘parity and differential requirements’ (PDR) of the form that, say, Imperial Tobacco requires that the retailer should not price Imperial’s brand A more than 3 pence higher than Gallagher’s brand B.  Rather loosely, I call this ‘price matching’ for ease of exposition but it should be taken to include ‘restoring price differentials’.  Earlier this week, the Competition Appeals Tribunal threw out the case in a decision that will see the OFT repaying the fine and paying huge costs.  Even more importantly, what does it mean for the enforcement of antitrust policy in the UK? Read the rest of this entry »

BHP Billiton Refuses to Participate in Canada’s Potash Export Cartel

December 7, 2011

(by Andreas Stephan) The Anglo-Australian mining giant has refused to include its large new mine in Saskatchewan, in Canada’s long standing potash export cartel.  In 2010 the Canadian government blocked BHP Billiton’s attempted takeover of a Canadian Potash corporation because they feared the breakup of the export cartel, on the grounds that it would not provide a “net benefit” to Canada. The firm’s present decision has resulted in a significant political backlash within Canada, forcing it to operate within the cartel for a limited period. This development raises important questions about export cartels and the behaviour of government. Read the rest of this entry »

Should we Regulate the Structure of Consumer Tariffs to Make Competition Work Better? Two Cheers for Ofgem

December 1, 2011

(by Catherine Waddams) The UK energy regulator today published its heavily trailed and significant proposals to constrain the regular tariffs which energy companies can offer to residential consumers. Ofgem’s proposals to simplify energy tariffs are an excellent start, but will they be enough to get consumers active in the market?  Just as important, will they motivate companies to offer better deals to the majority of consumers and not just for those who shop around regularly? Read the rest of this entry »