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 »


Leniency in the Civil Aviation Authority’s Price Fixing Case: Will a Ringleader Ever Be Refused Immunity?

December 22, 2016

(by Andreas Stephan) On 20 December 2016, the UK’s Civil Aviation Authority (CCA) found that East Midlands International Airport Ltd (EMIA) and Prestige Parking had breached competition law, by agreeing that Prestige would not sell its car parking services at below a minimum price that was linked to the price of EMIA’s own parking services. No fine was imposed in the case because Prestige Parking is no longer trading and EMIA received immunity in return for revealing the arrangement to the Competition and Markets Authority (CMA), under its leniency programme. We do not yet have the full decision, but the Press Release states, in relation to the minimum pricing that, “EMIA imposed this requirement as a condition of allowing Prestige to access facilities at the airport…”. This appears to suggest EMIA was awarded immunity despite instigating the arrangement. Read the rest of this entry »


Clinton’s proposed ban on pay-for-delay deals would do little to lower drug prices

September 30, 2016

(By Farasat Bokhari)[1]  Banning “pay-for-delay” deals that postpone the production of less-expensive generic drugs is a key action point in Hillary Clinton’s comprehensive plan to lower prescription drug costs. Eliminating these deals could, indeed, save Americans billions of dollars on medications. An even more productive strategy would be to stop drug makers from producing “authorized” generics. Read the rest of this entry »


General Court’s pay for delay judgment in Lundbeck – some guidance, but worries remain

September 14, 2016

(by Sven Gallasch) On 8 September, the General Court handed down its eagerly awaited decision in Lundbeck – the first ever European judgment concerning so-called pay for delay settlements. The Commission’s decision in this case was heavily criticised by practitioners as well as academics like myself for taking the view that agreements in question would constitute a ‘restriction by object’. In a previous blog I argued that the Commission might have pushed it too far by finding this kind of agreement an object restriction, especially in the light of the Court of Justice’s decision in Groupement des Cartes Bancaires, where it was held that such restrictions should be interpreted ‘restrictively’. It is therefore perhaps surprising that the General Court has rejected every one of the 10 arguments (by my count) put forward by Lundbeck, and has upheld the Commission’s decision in its entirety – even the level of the fine. Read the rest of this entry »


The dangerously distorted incentives created by the CMA’s performance target

August 5, 2016

(by Bruce Lyons)[1]  The CMA has recently published its annual report and associated impact assessment.  Its performance management framework commits the CMA “to achieving direct financial benefit to consumers of at least ten times our cost to the taxpayer.” [Annual Report 2015-16, p.66].  Target setting and performance measurement are an important part of performance management.  However, the precise way that the government requires the CMA to justify its funding is dangerously distortionary. Read the rest of this entry »


Will much change in Antitrust post Brexit?

July 8, 2016

(by Andreas Stephan) The UK’s decision to leave the European Union has come as a shock to markets, politicians and indeed to many ‘Brexiteers’. Although protests demanding a reversal of the outcome and legal wrangling over Art 50  (the process for leaving the EU) continue, mainstream politicians have almost universally accepted the result (the obvious exception being in Scotland) and there is little evidence of public perceptions having shifted towards ‘Remain’ since the vote, despite accusations of a dishonest and misleading campaign by the ‘Leave’ camp. It is therefore almost certain that the UK will cease to be a full member of the EU. Bruce Lyons wrote about the (limited) advantages and (greater) disadvantages of Brexit for competition policy in an earlier blog, but here I suggest that much may remain the same regardless of what the UK’s new relationship with the EU ends up being. Read the rest of this entry »


Would Jeremy Corbyn as Prime Minister mean the end of Competition Policy?

August 17, 2015

(by Andreas Stephan) The UK’s Labour party is currently in the process of selecting a new leader. The front-runner, Jeremy Corbyn, may become Britain’s first socialist Prime Minister in a generation. This blog post considers what a Corbyn government could mean for competition policy. Read the rest of this entry »