Does the CAT’s fast-track procedure strike the right balance between claimants and defendants?

August 25, 2017

(by Sebastian Peyer) The Consumer Rights Act 2015 significantly expanded the jurisdiction of the Competition Appeal Tribunal (‘CAT’).[1] The Tribunal can now adjudicate stand-alone damages claims, award permanent and interim injunctions,[2] allow opt-out collective proceedings (see previous blog post) and deal with claims in the new Fast Track Procedure (‘FTP’). Enforcement mechanisms prior to 2015 were ineffective for small and medium sized enterprises (‘SMEs’) because of the high cost associated with bringing such actions before the High Court and the narrow jurisdiction of the Competition Appeals Tribunal (‘CAT’) for follow-on damages actions. A comparative glance at Germany showed that claimants had a strong preference for simply stopping anti-competitive behaviour through an injunction, yet even this simple tool was considered costly and complex in England. Since the introduction of the 2015 Act, a number of claimants have applied for the fast track procedure and the CAT has awarded one injunction in the FTP (Socrates Training Limited v The Law Society of England and Wales).[3]  The FTP appears to be both effective at capping costs to reasonable levels and, more importantly, at providing a credible mechanism to encourage out of court settlements. 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 »


Brexit uncertainty: fewer mergers, big business winners

June 5, 2017

(by Peter Ormosi)[1] While it is widely recognised that last year’s EU referendum caused significant uncertainty for markets, some early indications were that it had not reduced the level of business confidence. Almost a year on, our research – based on a careful study design of a treatment and control group and using data from S&P’s Capital IQ  – finds that the uncertainty surrounding the referendum has in fact led to a significant drop in merger numbers and the numbers have failed to recover to earlier levels.[2] Apart from establishing a causal relationship, the study suggests that the post-referendum policy uncertainty is helping the largest M&A transactions, while hindering the smaller ones, with possible negative consequences.

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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 »


Can care homes survive with privately funded residents cross-subsidising those who are state funded?

February 2, 2017

(by Morten Hviid) Care homes often take a mix of privately funded and state funded residents. Recent research by a leading provider of market information about the care home sector, LaingBuisson, assesses that the average fee per resident with a local authority (LA) assisted place fell short of what it costs care homes to provide the care by £104 p.w.. They also argue that the shortfall is picked up by private fee payers who are thereby providing a cross-subsidy. They refer to this as a hidden “care tax”.  The existence of this cross-subsidy is nothing new. The predecessor of the Competition and Markets Authority, the OFT, found the same in a report from 2005.  However, the size of the cross-subsidy is notable.  Even without assessing the strength of the new research, which is not publicly available, several aspects of this news story are worth pondering further.  Should LAs use any buyer power they might have when negotiating prices?  What are the consequences for the care market from the cross-subsidy?  Why are care homes willing to accept below cost prices?  These questions have added current importance because the CMA is undertaking a Market Study into the care home market. 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 »


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 »