Category Archives: Agreements

The Cost of Collusion

The Competition Bulletin is pleased to welcome a guest blog from Louise Freeman of King & Wood Mallesons LLP. Louise specialises in (among other things) complex competition litigation. In this blog, she addresses the implications of the recent CJEU decision in Case C‑557/12 Kone AG and others v ÖBB-Infrastruktur AG. Continue reading

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Avoiding the clinch: judicial respect for the rules inherent to sport

In a recent bout in the High Court, the specificity of sporting disputes once again came to the fore. In Bruce Baker v British Boxing Board of Control [2014] EWHC 2074 (QB), 25 June 2014, Sir David Eady was faced with the old chestnut of a request for a court to interfere with a national sporting body’s decision to sanction one of its participants. One interim application later, and the BBBC was still standing. Continue reading

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The English law of causation and the passing-on defence

One of the big questions of English competition law is whether there is such a thing as a “passing-on defence” – – i.e. whether the damages suffered by a purchaser of a cartelized product are reduced or mitigated if he “passes on” some of the overcharge to his own customers. Two follow-on damages actions were due to be heard this term, arising out of the synthetic rubber cartel and the gas insulated switchgear cartel, both of which raised the question of passing-on but both of which have now settled. Continue reading

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Competition law and covenants restrictive of land use

Covenants restricting use of land to particular commercial purposes are commonplace. Until recently, the potential for competition law to regulate them was limited, because “land agreements” were excluded from the reach of the Chapter I Prohibition under the Competition Act 1998. The exclusion has, however, been revoked by the Competition Act 1998 (Land Agreements Exclusion Revocation Order) 2010. The OFT has also provided guidance on the application of competition law in this field. Continue reading

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Non-Appealing Cartelists Beware

Tucked away at the back of last week’s Supreme Court decision on time-limits for follow-on claims is a very important development for private competition actions.

The context is section 47A of the Competition Act 1998, a provision which has generated an extraordinary amount of litigation in view of the fact that it was intended to streamline private damages actions. Continue reading

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Tobacco decision: the Court of Appeal emphasises finality

The Court of Appeal yesterday delivered a judgment that should finally draw a line under one of the Office of Fair Trading’s more troublesome cases – and which will presumably bring a great sigh of relief from the Competition and Markets Authority, the body that has now taken over the OFT’s functions. Continue reading

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Sharing Risk in Collective Actions

With legislation to introduce collective actions currently making its way through Parliament (see our previous blog here), we are pleased to welcome a guest blog from Elaine Whiteford of King & Wood Mallesons  LLP and Oliver Gayner of Burford Capital (UK) Ltd. They highlight a litigation funding problem which will arise under the proposed new regime, and suggest an ingenious solution. Continue reading

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Murphy and pay-TV: an update

A version of the blog post below was first published on the Blackstone Chambers sports law blog: http://sportslawbulletin.org/.

Back in November I blogged on a Financial Times report that the European Commission was about to commence an antitrust investigation into pay-TV services.  That investigation was formally announced last Monday, in a statement by Joaquín Almunia, Commission VP for Competition Policy. Continue reading

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Competition round-up: January 2014

It is again time for a round-up of recent competition law developments which have caught our attention.

Most attention-grabbing of all was the European Commission’s genius/bizarre/inexplicable decision to publish a comic book which is probably best described as a bureaucrat’s fantasy. A young Commission official (Thomas) starts talking to a beautiful woman (Chloe) in an airport departure lounge. Instead of ignoring his slightly creepy advances, Chloe turns out to want nothing more than to hear about the Commission’s antitrust work. Indeed, when Thomas false-modestly suggests that he might be boring her, she insists she wants to hear more:

EU-cartoon

And so starts the most fascinating hour of Chloe’s life. I should thank the Legal Cheek blog for bringing this important piece of work to my attention. Continue reading

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Murphy, round 2: does exclusive territorial licensing of pay-TV breach EU competition law?

According to a report in the Financial Times last weekend, the European Commission is on the verge of commencing a formal investigation into potentially anti-competitive restrictions in pay-TV licensing arrangements.  Such an investigation could have significant ramifications for any owners of television rights in sports fixtures (or other content) who seek to maximise their revenues by licensing on an exclusive territorial basis.

The last time similar issues came before the Court of Justice, a rights owner rather than the Commission was on the offensive.  In Joined Cases C-403/08 and C-429/08, Football Association Premier League Ltd v QC Leisure, Murphy v Media Protection Services Ltd [2012] 1 CMLR 29, FAPL was attempting to use criminal and civil law provisions of the Copyright, Designs and Patents Act 1988 to enforce its model of exclusive territorial licensing of satellite TV rights for the Premier League.  Mrs Murphy, a publican who had used an illicitly obtained satellite decoder card to show Greek satellite broadcasts of Premier League matches in her Portsmouth pub, famously persuaded the Court of Justice that national legislation prohibiting the import, sale and use of satellite decoder cards from elsewhere in the EU contravenes the free movement rules in the EU Treaties, and that restrictions such as those in the licence agreements between FAPL and its satellite broadcasters, obliging the licensee not to provide decoding devices outside its territory, contravene Article 101 TFEU.  Her appeal against conviction (for the offence of fraudulently receiving a programme included in a broadcasting service) was successful.  Yet FAPL snatched victory from the jaws of this defeat, establishing in the QC Leisure litigation that activities such as Mrs Murphy’s are actionable as copyright infringement. Continue reading

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The Court of Appeal on Cartels and Conflicts

The Court of Appeal handed down two important decisions last week on the application of conflict of law principles to cartel follow-on damages claims: Deutsche Bahn AG & Ors v Morgan Advanced Materials plc & Ors [2013] EWCA Civ 1484 and Ryanair Limited v Esso Italiana Srl [2013] EWCA Civ 1450. The defendants in each case challenged the jurisdiction of the English courts to hear damages claims arising from their cartel activities. Continue reading

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Conspiracy, the CAT, and the Court of Appeal: “Here is a case unprecedented” (The Gondoliers, Act 2)

In W.H. Newson Holding Limited & ors v IMI plc & ors [2013] EWCA Civ 1377, the Court of Appeal has made some important new law regarding the scope of section 47A of the Competition Act 1998 and the tort of common law conspiracy.

The Court upheld Roth J’s decision (on which see Tom Richards’ blog) that it is in principle possible to advance in the CAT a follow on claim based on common law conspiracy. However, it held that because the claim followed on from a Commission Decision which did not contain a specific finding that the Defendant intended to injure the Claimant, the cause of action could not be made out without inviting the CAT to make additional findings – an invitation which the CAT was bound to decline in the light of Enron 1 and Enron 2. Continue reading

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Canadian Supreme Court: No such thing as passing on defence

On Thursday last week the Supreme Court of Canada handed down three much-anticipated judgments concerning indirect purchaser claims. The trio of cases point towards a distinctive, and in many respects more claimant-friendly, approach to class actions than that adopted in the US. They will therefore be essential reading for those preparing for the proposed new collective action regimes here in Europe.

Of even greater interest (from a European perspective) is the Court’s rejection of the passing-on defence – i.e. the defence that a claimant ‘passed on’ some or all of the unlawful overcharges to its own customers. In the large majority of European countries, including England, the courts have yet to decide whether to recognise such a defence (its existence was assumed but not debated in the Devenish case). Continue reading

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A family affair: parental liability for joint ventures

It is trite law that a parent company will be liable for antitrust infringements committed by a subsidiary where the parent exercises “decisive influence” over the conduct of the subsidiary. Earlier this year the Court of Justice of the European Union (“CJEU”) illustrated just how difficult it will be for a company to rebut the presumption of “decisive influence” in the context of a wholly-owned subsidiary (see Kieron Beal’s post here). In two decisions published on Thursday last week, the CJEU pushed the boundaries of parental liability even further, holding that parent companies may be liable for infringements committed by their joint venture companies.

This further affirmation that antitrust liability truly is a “family affair” is likely to have significant and far-reaching implications for the shareholders of such joint ventures. Continue reading

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Agreements based on Libor are not void (Phew!)

This week has brought further news on the Libor interest rate fixing saga, with UK broker ICAP receiving an $87m fine.

However, whilst the media spotlight remains on the worldwide regulatory and criminal proceedings, a large number of potential claimants are waiting in the wings to bring private damages claims against those responsible for fixing the rates. Perhaps the biggest problem facing such claimants is how to quantify their loss. It is enormously complex, and therefore expensive, to try to work out whether the rate fixing harmed a particular person, and if so by how much.

Anyone trying to think of a way around this problem should pay attention to last week’s case management decision in Deutsche Bank AG and others v Unitech Global Limited and another [2013] EWHC 2793 (Comm). Continue reading

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Competition round-up: Summer 2013

It is time for what has become the Competition Bulletin’s regular half-yearly update of EU and UK competition law developments. (For our previous round-ups see here).

Thinking big Continue reading

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e-books: Vertical participation in hub and spoke agreements

The 10 July judgment in the American e-books case (US v Apple) addresses an important question not yet examined under European competition law: what determines the liability of the vertical participant (“B”) in an A-B-C information exchange? Continue reading

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Cañas: no sufficient interest in showing anti-competitive rules

The blog post below first appeared on the sports law blog recently launched by colleagues at Blackstone Chambers. 

We intend in future to post articles with both a competition and a sports angle on both blogs. Readers interested more generally in sports law may wish to subscribe to the Sports Law Bulletin:  http://sportslawbulletin.org/

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Retirement comes too soon for many professional sports players, but for Guillermo “Willy” Cañas, an Argentinean tennis player once ranked world number 8, there was yet more to be lost upon retirement than just the tournament prizes and sponsorship deals. Continue reading

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UK government proposes “streamlining” regulatory and competition appeals

The UK government on Wednesday published a consultation on streamlining regulatory and competition appeals. The press spin was that the proposals are all about preventing “armies of lawyers” from blocking consumer-friendly measures. In reality, although it is true that the proposals are designed in part to put a lid on litigation, the consultation contains a series of thoughtful suggestions – many of which are likely to attract widespread support.

Take, for example, the suggestion that there should be greater consistency in the available appeal routes. Someone at the Department for Business, Innovation and Skills has had fun mapping out the existing appeal routes for different decisions in the regulated sectors. The resulting table speaks for itself (figure 3.5 of the consultation):

Regulatory decisions

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Private enforcement: the Commission speaks at last

The trio of documents published by the Commission last week mark an important moment in private competition enforcement in the EU. After years of debate and consultation, it is now clear that, whilst the Commission is determined to take some important steps to assist claimants in private actions, it is not prepared to bring about the sorts of fundamental changes which would be needed to realise the full potential of private enforcement.

The three documents each deserve close scrutiny. This blog is intended only to provide a broad overview. Continue reading

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Price-fixing by the State: a minimum unit price for alcohol

For a number of years concerns have been expressed over excessive levels of alcohol consumption and the effect this has on both public health and public order. There is a clear relationship between the price of alcohol and the amount of alcohol consumed. On 3 May 2013, the Court of Session ruled that a 50 pence per unit minimum alcohol price which had been imposed by the Scottish Parliament was compatible with EU law. In this blog I argue that, in reaching his conclusion, Lord Doherty misapplied the proportionality test. Continue reading

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The Sins of the Son or Daughter

Things occasionally have an air of unerring certainty about them. It will rain on the May Day bank holiday weekend. Tottenham will be pipped to fourth place in the Premier League on the last day of the season. Attempts to challenge a Commission finding that a group of companies constitute a single economic entity will fail. So it has proved for Eni SpA, in its failed appeal against the judgment of the General Court in Case T-39/07 Eni v. Commission [2011] ECR II-0000, GC. Continue reading

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To fight or not to fight: pharmaceutical patent settlements

On 19 April 2013, the OFT announced that it had issued a Statement of Objections following its investigation into patent litigation settlement agreements (PLSAs) in the pharmaceutical sector.  The underlying factual complaint related to GlaxoSmithKline’s alleged conduct in defence of one of its blockbuster drugs, Seroxat, which is a prominent anti-depressant (paroxetine). The central allegation is that GSK concluded PLSAs with three generics companies – Alpharma Limited (Alpharma), Generics (UK) Limited (GUK) and Norton Healthcare Limited (IVAX) – which had sought to compete with their own paroxetine medicines. It is alleged that at particular points between 2001 and 2004, GSK sought to challenge its competitors’ entry into the market by threatening or instigating patent litigation. It then concluded the agreements which offered financial sums in exchange for the generics’ commitment not to supply paroxetine independently for a relevant period within the patent protection of Seroxat – although they were able to do so before this protection had ended. Continue reading

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The economics of pass-on

The Competition Bulletin is pleased to announce that Oxera Consulting will be contributing a short series of blogs on key economic concepts for competition lawyers. Robin Noble, Oxera Associate Director and an expert economist on commercial and competition law damages actions, is our first guest blogger. His post discusses the issue of pass-on—ie, the extent to which the purchaser of a cartelised product passes on the overcharge, and therefore its losses, to its own downstream customers. Robin can be contacted at robin.noble@oxera.com.

Introduction

Pass-on is a key issue in virtually all cartel damages claims in the EU. It can make or break a claim: assuming that pass-on is a valid defence to a damages claim, complete pass-on means a claimant cannot claim for any absorbed overcharge, the main head of loss in these actions.

This post focuses on two points. First, it provides a brief summary of the key insights provided by economic theory; second, it discusses two important real-world issues: cost plus pricing, and price-pointing. Continue reading

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The OFT’s tobacco decision: Is it dead yet?

Late in 2011, the Office of Fair Trading was forced to concede before the Competition Appeal Tribunal that it could no longer defend the theory of harm contained in its Decision on alleged pricing agreements between tobacco manufacturers and retailers.

However, the OFT refused to simply give up, and instead tried to persuade the CAT to allow it to run a new case. One of the barristers before the CAT (step forward Dinah Rose QC) described the OFT’s new case as “Frankenstein”, a corpse stitched together from components of the abandoned Decision. She invited the CAT to bury the corpse. It duly did so: the OFT was not allowed to run a new case, and the Appellants succeeded in their appeals.

The OFT’s original Decision, however, was not quite dead. Continue reading

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Collective Actions: loss in complex cases

The big news from last week’s UK announcement on reforming private competition enforcement is that the government plans to introduce opt-out class actions for competition claims.

The proposals incorporate various “safeguards” designed to ensure that the perceived excesses of US class actions do not become a problem here. Some of the safeguards are really no more than statements of the obvious – no-one can be surprised that we will not have US-style triple damages, or that law firms won’t be able to bring a claim without even having a claimant. On the other hand, some safeguards – such as the prohibition on contingency fees – will surely serve to limit the usefulness of UK class actions.

Financing aside, the big unanswered question is how attractive claimants will find such class actions (or “collective actions”, as the government prefers to call them, emphasising the differences with the US). Continue reading

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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). Continue reading

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Conspiracy in the CAT: the scope of section 47A

What kinds of “follow-on” claims may be brought in the CAT?  ‘[A]ny claim for damages, or any other claim for a sum of money which a person who has suffered loss or damage as a result of the infringement of a relevant prohibition may make in civil proceedings brought in any part of the United Kingdom’, according to section 47A(1) of the Competition Act.  A ‘relevant prohibition’ for this purpose is of course defined as any of the Chapter I and II prohibitions or the prohibitions in Articles 101 and 102 of the Treaty.

The most obvious section 47A claim is a claim in tort for breach of statutory duty.  But what other causes of action fall within the scope of the section?

That question has been considered judicially for the first time in W. H. Newson Holding Ltd & ors. v IMI plc & ors. [2012] EWHC 3680 (Ch), a case arising out of the copper plumbing tubes cartel. Continue reading

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Tesco scores partial victory in cheese cartel

In a judgment handed down this afternoon, the Competition Appeal Tribunal largely upheld Tesco’s appeal against the OFT’s decision that it had participated in unlawful agreements relating to the price of cheese: see Tesco Stores Ltd v Office of Fair Trading [2012] CAT 31.

Tesco’s victory is essentially on the facts: it persuaded the CAT that the OFT had misunderstood the evidence. The case is therefore yet another example of the facts of a case appearing very different when placed under forensic examination before the Competition Appeal Tribunal than they did when considered by the regulator (other recent examples are the tobacco litigation and the BSkyB case).

The OFT is plainly keen to strengthen the quality of its decisions. It has recently revised its Competition Act procedures guidance with precisely that goal in mind. It will therefore want to examine this latest judgment to see whether any further steps should be considered. Two points stand out. Continue reading

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Another reason to avoid the CAT – Emerson in the Court of Appeal

The famous Victorian cricketer WG Grace is reputed once to have offered the following advice:

“When you win the toss – bat. If you are in doubt, think about it, then bat. If you have very big doubts, consult a colleague – then bat.”

The recent Emerson decision [2012] EWCA Civ 1559 is another illustration that bringing a follow on claim in the CAT rather than in the High Court is the law’s equivalent of choosing to bowl.

Emerson was yet another interlocutory skirmish arising from the CAT’s notoriously troublesome follow on jurisdiction under section 47A of the Competition Act 1998.  Continue reading

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