Should competition law be suspended to help deal with the COVID-19 crisis?

March 27, 2020

(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 »


The deterrent effect of competition authorities’ work

September 15, 2017

(by Mike Walker^) In his post last month, Steve Davies bemoaned the lack of evidence on the magnitude of harm deterred by the activities of the Competition Agencies. He presented some estimates from research in CCP on cartel deterrence, concluding most strikingly: “On the most conservative of our estimates, more than half of all potential cartel harm never occurs, because it is deterred. This is very much a lower bound, and the proportion could be as high as 90%.” Read the rest of this entry »


The deterrence value of competition policy can and should be measured

August 17, 2017

(by Steve Davies) In a post last year, I argued that it was time for competition economists, both academics and practitioners, to start seriously tackling one of the big unknowns: how much harm is deterred by Competition Law and the Competition Authorities (CAs)? In this blog I pull together some results from three recently completed papers on cartel deterrence. I believe that these importantly move forward our understanding of this great unknown, and merit exposure to a non-academic audience in a non-technical way.

We have three ‘headline’ results. Read the rest of this entry »


Has the CAT’s MasterCard decision killed off opt-out class actions by indirect purchasers?

August 10, 2017

(by Sebastian Peyer) On 21 July the Competition Appeal Tribunal (‘CAT’) rejected an application for an opt-out collective proceedings order (‘CPO’) in Walter Hugh Merricks v Mastercard Inc, thereby  blocking the largest opt-out competition claim brought in the UK to date and one of the first large indirect purchaser actions. The applicant brought the claim on behalf of 46.2 million people asking Mastercard for around £14 billion in compensation. Despite the negative outcome for the applicant (and millions of consumers), the CAT’s decision has clarified a number of important points for future CPO applications. But the Tribunal’s decision may have also inadvertently raised the bar for indirect purchaser claims. Read the rest of this entry »


Competition law is an appropriate tool to prevent exploitative price hikes in Pharma

May 26, 2017

(by Sven Gallasch) On 15 May the European Commission formally opened an investigation into Aspen Pharma’s pricing practices concerning five life-saving cancer drugs. This European investigation represents the latest enforcement effort in a string of cases emerging across Europe, including in the United Kingdom and Italy. All investigations are focussed on pharmaceutical pricing practices and allege that their pricing strategies may be exploitative[1] and amount to an abuse of a dominant position.  The surge in these previously rare exploitative pricing cases, has set off alarm bells in the pharmaceutical sector, among legal counsel of big pharma and some academic commentators. Read the rest of this entry »


European Commission launches new anonymous whistleblower tool, but who would use it?

March 21, 2017

(by Andreas Stephan) On 16 March 2017, the European Commission announced the launch of a new online tool to make it easier for individuals to alert it to secret cartels and other violations of competition law. What makes this tool innovative, is that it allows potential whistleblowers to maintain their anonymity via an encrypted messaging system, with two-way communication, giving them the confidence to report cartels. The tailor-made system is maintained by an external intermediary and is designed to be entirely secure. Read the rest of this entry »


Flight Centre: Australian High Court finds agent competed with principal and breached cartel laws

January 9, 2017

(by Julie Clarke[1]) On 14 December 2016, Australia’s highest court (the High Court) determined, by majority, that Flight Centre, a travel agent, competed with airlines for the supply of airline tickets and that, as a result, its attempts to induce the airlines to lower their direct-to-public ticket sales constituted unlawful price fixing. Flight Centre markets itself as offering a ‘Lowest Airfare Guarantee’. In attempting to induce the airlines not to discount tickets sold direct to the public, it was found to be in competition with the airlines and therefore subject to a per se prohibition rather than a full effects analysis. The treatment of travel agents and other similar arrangements falls into somewhat of a grey area in Competition Law.  Are the agents competing horizontally with their suppliers in selling to consumers, or are they better seen as vertically related retailers, or even as de facto employees?  This is important because horizontal cartels are almost universally per se illegal, often with criminal sanctions, vertical price fixing (e.g. RPM) has a much more mixed and nuanced legal position, and employees are completely exempt (a firm is free to set prices that all its salesforce must implement). In Europe, genuine ‘agency agreements’ fall outside the scope of Article 101 TFEU, even though they may contain clauses that can produce anticompetitive effects, such as minimum pricing.[2] This blog analyses the significance of recent developments under Australian Competition Law. Read the rest of this entry »