Competition round-up: January 2013

As today is the first day of the new court term, I thought it would be a good moment for a round-up of last term’s competition cases – and, of course, the customary plug of our own blogs.

If there was a theme to the Michaelmas term, it was the highs and lows of follow-on claims. Few pieces of legislation can have attracted so much judicial attention in so short a time as s.47A of the Competition Act 1998. It has now gone as far as the Supreme Court, which confirmed in BCL Old Company Ltd v BASF plc [2012] UKSC 45 that the rules governing limitation periods for bringing follow on claims in the CAT are not so unpredictable as to breach European principles of legal certainty (a topic which I blogged on here).

James Segan warned in his blog that the Court of Appeal’s decision in Emerson Electric Co [2012] EWCA Civ 1559, which held that CAT follow-on claims may only be brought against parties named in the decision, was another reason to avoid the CAT if at all possible – which normally means, avoid the CAT if limitation hasn’t expired in the High Court. Yet another reason for avoiding the CAT was provided by Newson Holding Ltd v IMI plc [2012] EWHC 3680 (Ch), a decision just before Christmas in which Mr Justice Roth held that one claim based on unlawful means conspiracy fell within s.47A whilst another fell outside it and should be struck out. (The case was heard in the High Court but concerns the jurisdiction of the CAT.) As Tom Richards explained in his blog, Newson has important implications for other follow-on claims based on causes of action other than breach of statutory duty.

Tom also blogged on another follow-on claim worthy of note, the Court of Appeal’s decision in KME Yorkshire Ltd v Toshiba Carrier UK Ltd [2012] EWCA Civ 1990 – a case which demonstrates the courts’ understanding attitude towards claimants who have difficulty in pleading their case because of the secretive nature of anti-competitive arrangements. The Court also expressed the view obiter that the unlawful acts and intentions of a parent company would be imputed to a subsidiary if (but only if) the parent exercised a decisive influence over the subsidiary.

In the regulatory world, the biggest news of the term was Tesco’s partial victory over the OFT in the cheese cartel case (see Tesco Stores Ltd v Office of Fair Trading [2012] CAT 31). I argued in my blog that the case contains some clear lessons for the OFT, and that we should now expect regulators to start making far greater use of parties which reach early resolution agreements.

Ofcom had another of its dispute resolutions upheld in Telefonica UK Ltd v Ofcom [2012] CAT 28. As Paul Luckhurst explained, whilst the immediate effect of the decision was to allow the mobile network operators to game the system to increase their revenue streams, the case should also be seen as a warning that Ofcom might in future intervene where parties are sticking to the letter but not the spirit of the regulatory regime.

The Competition Commission succeeded in its effort to continue investigating Ryanair’s minority shareholding in Aer Lingus: see [2012] EWCA (Civ) 1632. The case provides an interesting contrast with a decision earlier in the year that the OFT was not allowed, for a period of time, to progress the same investigation: see [2012] EWCA (Civ) 643. Watch this space for our forthcoming blog on these contrasting decisions.

The term also brought two notable decisions on costs. In Quarmby Construction Co Ltd v Office of Fair Trading [2012] EWCA Civ 1552, the Court of Appeal upheld the CAT’s decision that there was no clear winner, and therefore no order for costs, where a party lost its appeal on liability but succeeded in getting the penalty reduced by some 75%. And in British Telecommunications Plc v Office of Communications [2012] CAT 30 the CAT held that the Competition Commission, when it participates in a section 193(7) review before the Tribunal, is not entitled to recover its costs because it participates as an appeal body rather than as a party. In a characteristically restrained blog, Tom Richards compared the decision to Alice in Wonderland.

It will be clear from the above that the Competition Bulletin’s focus over the last term has been somewhat Anglo-centric. One European decision which did grab our attention was the CJEU’s judgment in Case C-457/10 P AstraZeneca v European Commission, which upheld the Commission’s decision that AstraZeneca had abused its dominance by misusing the patent system. Ravi Mehta in his blog detected important shifts in the CJEU’s approach, and predicted that the case will embolden domestic authorities to call patent procedures into question.

We also carried two blogs on more general issues. Oke Odudu posted a fascinating blog on the application of competition law to the National Health Service. And Kieron Beal QC wrote about the proposals for reform in private competition enforcement.

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Filed under Abuse, Agreements, Damages, Penalties, Pharmaceuticals, Policy, Procedure, Round-Up, Telecoms

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