Brexit Sunset Clause Risks Uncertainty for UK Competition Law

This blog post draws on the presentation given by Professor Catherine Barnard (University of Cambridge) at the ESRC ‘UK in a Changing Europe’, ‘UK Regulation after Brexit Revisited’ event held at the British Academy in London on 27^th October 2022.

(by Andreas Stephan) The UK’s new Prime Minister, Rishi Sunak, promised to put EU laws through the ‘shredder’, as part of the leadership contest campaign video he released in August when running against his predecessor, Liz Truss. The Retained EU Law (Revocation and reform) Bill (REUL) promises to impose a sunset clause on 2,400 or so pieces of retained EU law, which will cause them to cease applying in the UK unless ministers actively act to keep them. This includes all secondary law (regulations and directives) and related case law of the European Commission and Court of Justice of the European Union (CJEU), which plays an important role informing UK Competition Law (at least to the extent that it relates to EU case law delivered until 31 December 2020). This blog explains why the law could create significant uncertainty for the enforcement of UK competition law and what might be done about it.

Is Furman right to propose ex ante platform regulation as the best way to address competition concerns in the digital economy?

(by Elias Deutscher) Last month, the Digital Competition Expert Panel, chaired by Professor Jason Furman, published its report ‘Unlocking digital competition’ (the ‘Furman report’). The report had been jointly commissioned by the Chancellor of the Exchequer and Business Secretary due to concerns about prevailing high levels in industry concentration, the accumulation of data in the hands of a handful of players and the rise of a few vertically integrated super-platforms. The same concerns have fuelled a European-wide policy debate about the challenges of competition law enforcement in the digital economy (e.g. by the German Federal Ministry for Economic Affairs and Energy and the European Commission).

The Furman report singles out the strategic importance of data and the gatekeeper function of intermediary platforms as central features of digital competition and the most important challenges for competition policy. These features make digital markets more prone to tipping in favour of a few powerful incumbents. Amongst other recommendations, the report proposes to address these concerns through the creation of a specific ex ante regulatory regime for digital platforms. While it outlines some of the basic features of the proposed new regulation, the report omits to clearly set out the underlying rationale and implications of such a regime. It also gives little guidance on its exact scope and implementation. Most importantly, it remains unclear whether the proposed framework will apply only to large, dominant firms, or also to smaller, non-dominant platforms.

The Norwich Monopoly Monopoly

(by Paul Dobson in the spirit of summer)  This post is a reminder to all our readers to be vigilant in spotting monopoly practices on your own doorsteps. I report on my quick investigation into a potential abuse of local monopoly power. The case involves the independent Norwich toy retailer Langley’s, which has been trading since 1883 and has achieved a monopoly of specialist city centre toyshops. It is now openly boasting in its shop window that the board game Norwich Monopoly is exclusive to them, and charging £34.99, as the following photo shows:

The deterrent effect of competition authorities’ work

(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%.”

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

(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.