“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 »


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 »


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 »


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 »


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 »


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 »