(by Andreas Stephan) On Friday 2 March 2018, in a much-anticipated speech meant to give clarity to the UK Government’s Brexit objectives, 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 »
(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 »
(by Sebastian Peyer) The Consumer Rights Act 2015 significantly expanded the jurisdiction of the Competition Appeal Tribunal (‘CAT’). The Tribunal can now adjudicate stand-alone damages claims, award permanent and interim injunctions, 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). 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 »
(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 »
(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 »
(by Bruce Lyons) 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 »
(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 »