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

April 24, 2019

(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. Read the rest of this entry »


“Facts” from thin air in the CMA Chairman’s letter requesting greater powers?

March 8, 2019

(by Bruce Lyons) I recently posted a blog commenting on the CMA’s proposals for reform. I was sympathetic with the aims of eliminating unfair pricing and inefficient decision processes. However, I was highly critical of the CMA’s direction of travel and the worrying side effects of their proposals. I suggested two alternative proposals that would directly address the aims without the harm. In this short blog, I pick up two “facts” used by Lord Tyrie, Chairman of the CMA, to motivate the need for reform. These are particularly important because they relate to exactly the type of statistical evidence relied on by the CMA in its daily competition analysis: concentration and margins. Read the rest of this entry »


Why the CMA is wrong in its proposals for reform and what should be done instead

March 7, 2019

(by Bruce Lyons) The Chairman of the CMA, Lord Tyrie, has written a 44-page letter (including annex) to the Secretary of State for Business, Greg Clark, setting out a long list of legislative proposals.[1] Two motivations are given: “First, the growth of new and rapidly-emerging forms of consumer detriment, caused in part by the increasing digitalisation of the economy, requires more rapid intervention, and probably new types of intervention… Second, there are increasing signs that the public doubt whether markets work for their benefit.” I agree with the spirit of these points and that they require action. However, I disagree with some of the CMA’s key proposals. Lord Tyrie appears particularly frustrated with the lengthy appeals system which limits his ability to act firmly and swiftly. Unfortunately, the overall package of proposals would reverse hard-won progress in competition policy over the last 20 years and lead to a paternalistic, arbitrary and unrestrained Consumer Interest Authority. In this blog, I briefly explain some of my concerns. I then set out two alternative proposals that would more directly and appropriately address public concerns over unfair pricing and result in better decisions without prolonged appeals. Read the rest of this entry »


The Norwich Monopoly Monopoly

August 16, 2018

(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: Read the rest of this entry »


Competition Law and State Aid in the ‘Brexit White Paper’: sensible alignment or unworkable proposals?

July 26, 2018

(by Andreas Stephan) In a previous blog post, I wrote of the UK Prime Minister’s unexpected discussion of Competition and State Aid, as two areas of policy where the UK’s Laws might remain “identical” to those of the EU, and where UK courts would “continue to look at” the Court of Justice of the European Union’s (CJEU) judgements. Following a dramatic few weeks in which the UK Government finally set out an agreed approach to its Brexit negotiations with the EU, a 104 page White Paper was published putting some flesh on the principles agreed by ministers. In this blog post, I discuss the extent to which the proposals on Competition and State Aid are workable.

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Does the Prime Minister’s Unexpected Discussion of Competition Policy Signal a Softening of Brexit?

March 4, 2018

(by Andreas Stephan) On Friday 2 March 2018, in a much-anticipated speech meant to give clarity to the UK Government’s Brexit objectives,[1] the Prime Minister suggested that: (a) UK State Aid and Competition rules could remain aligned with those of the EU, and (b) UK courts could continue to have regard to judgments of the European Court of Justice (ECJ). Nevertheless, her speech also made it abundantly clear that the ECJ could not continue to have jurisdiction over the UK. While, on the face of it, this speech appears to reiterate Theresa May’s commitment to a ‘hard Brexit’, these significant concessions may signal a weakening of that resolve, as the Government acknowledges for the first time that – if the UK is to maintain a close trading relationship with the EU – the legal realities of Brexit will be complicated.   Read the rest of this entry »


You lose, you pay (some) – the CAT’s cost ruling in Walter Hugh Merricks

January 23, 2018

(by Sebastian Peyer) The burden of costs in civil litigation is considered of great importance to the incentives to recover damages in competition law. In particular, the ‘loser-pays’ rule that dominates European legal systems is thought to create significantly greater risks for prospective collective actions, in contrast to the American rule where each party is normally responsible for paying its own costs.[1]  The UK Competition Appeal Tribunal’s (‘CAT’) recent ruling on cost in Walter Hugh Merricks v MasterCard is therefore significant in thwarting an attempt to deviate from the loser-pays rule that is prevalent in English civil litigation and striking a balance between applicants’ and respondents’ interests. Earlier this year, the CAT rejected an application for an opt-out collective proceedings order (‘CPO’) under section 47B of the Competition Act 1998 (see my comment here). The question that the CAT still had to answer was who would bear the cost of that unsuccessful CPO application and to what extent are the actual costs incurred recoverable. In its decision, the CAT stressed that the loser-pays rule applies to CPO applications, but reiterated that the parties’ expenses must be proportionate in order to be recoverable. This means that parties cannot inflate their expenses to discourage would-be claimants. Read the rest of this entry »