Category Archives: Procedure

by | December 11, 2020 · 11:48 am

Collective Actions in the Supreme Court

The big news from today’s UK Supreme Court collective action decision in Mastercard v Merricks [2020] UKSC 51 is not only that Mr Merricks won and defeated the appeal, but that the Supreme Court approached the issues in a far more claimant-friendly way than even the Court of Appeal had done. 

The headlines are that, when a person applies for a collective proceedings order:

  • The statutory question for the Tribunal is not whether the claims are “suitable” to be brought as collective proceedings in some general sense; it is whether they are more suitable to be brought as collective proceedings than as individual claims.  This marks a major shift, and it caused the dissenting judges to warn that the new approach will, “very significantly diminish the role and utility of the certification safeguard”.
  • The applicant does not need to meet any particular merits or evidential threshold, other than the ordinary tests applicable if the respondent applies for strike out or summary judgment.
  • If the applicant is seeking an aggregate award of damages, he/she does not need to show that it will be possible to distribute the damages to class members in a way which reflects or even approximates each individual’s actual loss.

Most readers will know the background.  Mr Merricks wants to bring opt-out collective proceedings (i.e. a class action) against MasterCard in respect of the loss allegedly suffered by some 46.2 million UK consumers, which he estimates will come to several billion pounds.  The Competition Appeal Tribunal refused to certify the claim.  The Court of Appeal held that the CAT had erred in law.  For more background see our earlier blogs here and here. 

The Supreme Court agreed with the Court of Appeal.  It is an unusual – perhaps unique – decision in that two judges (Lord Briggs and Lord Thomas) delivered judgment in favour of Mr Merricks, and two (Lord Sales and Lord Leggatt) delivered a strongly-expressed dissent.  The reason why Mr Merricks won is that Lord Kerr was the fifth judge on the panel which heard the appeal, and he had expressed his agreement with Lords Briggs and Thomas before his untimely death on 1 December.

The decision will undoubtedly be a much-needed shot in the arm for the collective action regime, which has been a major disappointment since its introduction in 2015 (still not a single case has been certified).  However, there will also be a lot of scope for debate in future cases.  Having been in both the Merricks case (for the intervener, Which?) and also in the other collective action case, Pride (see here), this is my initial take on today’s judgment.

Statutory framework

It is helpful to recap a couple of elements of the statutory framework.  Collective proceedings are governed by section 47B of the Competition Act 1998.  A person who wants to act as a representative in collective proceedings needs to apply for certification.  There are a few hurdles to overcome, but the one which the Merricks case is concerned with, and which is likely to be the main hurdle in most of these claims, is at s.47B(6):

“Claims are eligible for inclusion in collective proceedings only if the Tribunal considers that they raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings.”

So, for present purposes, to be certified (i) the claims must raise common issues (i.e. “the same, similar or related issues of fact or law”), and (ii) the claims must be suitable to be brought in collective proceedings.  The main focus of the Merricks judgment is on the suitability requirement, although it also touches on the common issues requirement.

In relation to the suitability requirement, the Tribunal Rules contain a list of potentially relevant considerations.  Rule 79(2) states:

“In determining whether the claims are suitable to be brought in collective proceedings […] the Tribunal shall take into account all matters it thinks fit, including –

(a)        whether collective proceedings are an appropriate means for the fair and efficient resolution of the common issues;

(b)        the costs and the benefits of continuing the collective proceedings;

(c)        whether any separate proceedings making claims of the same or a similar nature have already been commenced by members of the class;

(d)       the size and the nature of the class;

(e)        whether it is possible to determine in respect of any person whether that person is or is not a member of the class;

(f)        whether the claims are suitable for an aggregate award of damages; and

(g)        the availability of alternative dispute resolution and any other means of resolving the dispute, including the availability of redress through voluntary schemes whether approved by the CMA under section 49C of the 1998 Act or otherwise.”

Item (f) in the above list refers to whether the claims would be suitable for an “aggregate award of damages”.  That is a reference to another important feature of the statutory framework: under s.47C of the Act, if collective proceedings are successful then instead of requiring the defendant to pay each class member their individual loss, it could be required to make one overall payment to the representative reflecting the overall (or aggregate) loss of the class.  That lump sum would then be distributed between class members by the class representative.

The essential reasoning in Merricks

The Tribunal rejected Mr Merricks’ application for certification for two broad reasons.

Distribution to class members

One of the Tribunal’s reasons was that, even if one could calculate the aggregate damage suffered by the proposed class as a whole, it would be impossible to calculate the loss suffered by each individual class member, even on an approximate basis.  The problem with that, according to the Tribunal, was that the aggregate award could not be distributed among class members in accordance with ordinary compensatory principles.  Mr Merricks’s own proposed method of distribution is very blunt: he intends to divide the overall sum between class members, distinguishing between them only on the basis of how many years they were in the class for.  That essentially means that the older you are the more money you will get, regardless of your spending habits, so the proposed method of distribution cannot be described as compensatory.

The Supreme Court held that the Tribunal’s approach to this issue contained an error of law.  As Lord Briggs said at [58], the ordinary compensatory principle is “expressly, and radically, modified” by the collective action regime.  In particular:

“Where aggregate damages are to be awarded, section 47C of the Act removes the ordinary requirement for the separate assessment of each claimant’s loss in the plainest terms. Nothing in the provisions of the Act or the Rules in relation to the distribution of a collective award among the class puts it back again. The only requirement, implied because distribution is judicially supervised, is that it should be just, in the sense of being fair and reasonable.”

Lord Briggs acknowledged at [77] that, in some cases, even if there is an aggregate damages award then it might be appropriate to distribute the award in such a way as to make some approximation towards individual loss.  But that will depend on what is fair and reasonable in the circumstances, and compensatory distribution is not a requirement of the scheme.

Evidence to prove loss

The other reason relied on by the Tribunal to refuse certification was that the claims were not suitable for an aggregate award of damages, and also not suitable to be brought in collective proceedings, because the Tribunal was not satisfied that there was sufficient data available for Mr Merricks’s economic experts, using the approach they had identified, to establish the overall damages on a sufficiently sound basis.

In reaching that conclusion, the Tribunal had applied a test which all of the parties agreed should be applied, drawn from Canadian class action jurisprudence.  The key part of the Canadian approach was that:

“[…] the expert methodology must be sufficiently credible or plausible to establish some basis in fact for the commonality requirement. This means that the methodology must offer a realistic prospect of establishing loss on a class-wide basis so that, if the overcharge is eventually established at the trial of the common issues, there is a means by which to demonstrate that it is common to the class (ie that passing on has occurred). The methodology cannot be purely theoretical or hypothetical but must be grounded in the facts of the particular case in question. There must be some evidence of the availability of the data to which the methodology is to be applied.”

It worth pausing here to comment on the archaeology of this particular test.  In the Pride case (the first certification claim before the Tribunal) the defendant sought to persuade the Tribunal to follow US case-law, which establishes a high threshold for class action certification.  The Tribunal rejected that invitation, noting that the UK framework is closer to the Canadian regime, which has a much lower threshold.  The Tribunal then endorsed the statement, set out above, from the Canadian caselaw.  The Tribunal was, therefore, always intending to adopt a low threshold.

However, there was always something unsatisfactory about treating the Canadian approach as a sort of legal test in this country.  For one thing, as Lord Briggs explains, it is used for slightly different purposes in the Canadian framework: if you read the test carefully you will notice that it is directed at whether loss is common to the class, which is not really what the “suitability” issue in the UK framework is about.  And for another thing, the “test” for certification in this country is set out in the 1998 Act and in the Tribunal Rules, which do not refer to this particular legal threshold, or indeed to anything similar.

Nonetheless, the parties in Merricks agreed on the applicability of the Canadian test, and the argument was over whether it had been met.  The Tribunal found that it had not.  The Court of Appeal decided that the Tribunal had erred in that decision. 

The Supreme Court discarded the Canadian test.  Lord Briggs’s starting point is that collective proceedings are designed to provide access to justice where the ordinary forms of individual civil claim have proved inadequate, and that “it should not lightly be assumed that the collective process imposes restrictions upon claimants as a class which the law and rules of procedure for individual claims would not impose” [45].  Lord Briggs points out that, in an ordinary claim, provided that the pleadings can pass any strike-out or summary judgment application, the matter is permitted to go to trial.  As the point is put at [47]:

“Where in ordinary civil proceedings a claimant establishes an entitlement to trial in that sense, the court does not then deprive the claimant of a trial merely because of forensic difficulties in quantifying damages, once there is a sufficient basis to demonstrate a triable issue whether some more than nominal loss has been suffered. Once that hurdle is passed, the claimant is entitled to have the court quantify their loss, almost ex debito justitiae.”

Lord Briggs then introduces a lengthy discussion about how courts often have to do the best they can with the evidence before them, however inadequate it may be.  None of this is new, but it will be happy reading to claimants in any competition case.  The court may have to “do the best it can upon the basis of exiguous evidence” [47], “resort to informed guesswork” [48], use the “broad axe” [51], and “do the best it can on the available evidence” [54].  The upshot of all of this is that, at [54]:

“There is nothing in the statutory scheme for collective proceedings which suggests […] [that] a case which has not failed the strike out or summary judgment tests should nonetheless not go to trial because of difficulties in the quantification of damages.”

In other words, and avoiding Lord Briggs’s triple negative, the only merits or evidential thresholds which must be met at the outset of a claim are the strike out and summary judgment tests.  And even that overstates the position somewhat, because the Supreme Court also makes clear that the strike out and summary judgment tests are not an integral part of the certification process itself, and they would only arise if the defendant had actually sought strike out or summary judgment (see [59]).

The meaning of “suitability”

There is also an important wider point that comes out of Lord Briggs’s judgment.

If you take the view, as Lord Briggs does, that claims for collective proceedings should not face any hurdles that would not be faced in ordinary civil claims, then it is not immediately clear what the Tribunal is meant to be doing when it asks whether the claims are “suitable” for collective proceedings.  If I issued a new claim this afternoon I would not have to show that it was “suitable” to go to trial, so on what basis is the Tribunal meant to decide whether claims are “suitable” for collective proceedings?

The answer is that “suitable” in s.47B(6) of the Act means “suitable to be brought in collective proceedings rather than individual proceedings”.  As Lord Briggs explains at [56]:

“This is because collective proceedings have been made available as an alternative to individual claims, where their procedure may be supposed to deal adequately with, or replace, aspects of the individual claim procedure which have been shown to make it unsuitable for the obtaining of redress at the individual consumer level for unlawful anti-competitive behaviour.”

Similarly, where the word “suitable” is used in Rule 79(2)(f) (the Tribunal must consider “whether the claims are suitable for an aggregate award of damages”) it means “suitable for an award of aggregate rather than individual damages”.  At [57] Lord Briggs suggests that the main issue in this regard will be one of proportionality, by which I think he means whether the benefit of securing individualized compensation is worth the costs that such an exercise would involve.

This approach to suitability, which is an important aspect of Lord Briggs’s analysis, is also the heart of the reason for Lords Sales and Leggatt’s dissent.  Lord Sales summarises their view at [118]:

“it does not follow that, because collective proceedings are an alternative to conventional proceedings brought by or on behalf of individuals, they are intended to be available in any case where they would be less unsatisfactory than such individual proceedings. As we have noted, collective proceedings confer substantial legal advantages on claimants and burdens on defendants which are capable of being exploited opportunistically. In the absence of wording which says so, we cannot accept that demonstrating that the members of the proposed class would face greater difficulties pursuing their claims individually must be regarded as sufficient to justify allowing their claims to be brought as a collective proceeding, with the advantages that this confers. Such an approach would very significantly diminish the role and utility of the certification safeguard.”

The wider consequences

The benefits of the Merricks judgment will not be limited to large-scale consumer claims.  In a wide range of cases the applicant will be able to say that it would be better for the claims to be brought as collective proceedings, and perhaps also for there to be an aggregate award, than for individual claimants to be left to bring their own claims.

In future cases, the Tribunal is likely to look at three main factors to decide whether the claims are suitable for certification (at least on an opt-out basis).  First and most obviously, the lower the damage suffered by any individual class member, the more suitable the claims will be for collective proceedings.

Secondly, there is the question of how ‘individualised’ the damage is.  As Merricks demonstrates, having highly individualised loss is not a bar to certification.  It is, however, a factor that will be placed in the balance.  This could be a particular issue if, for example, the proposed claimant class is made up of companies which have themselves passed on the overcharge in different amounts to their own customers.  There is no reason in principle why a class of that nature could not receive compensation through an opt-out collection action, but it will be somewhat more difficult to persuade the Tribunal that it is the suitable procedure.

Thirdly, where a claim involves issues which are not common to the class, that may also be a factor leaning against certification.  In particular, it may be inefficient for the claims to be tried collectively simply for the purpose of resolving the limited common issues.

There are several grey areas.  One is the extent to which, when the Tribunal asks whether it would be better for the claims to be brought as collective proceedings versus individually, it can take account of the possibility of other means of challenge.  Lord Briggs’s focus is on the kind of small value consumer claim typified by Merricks, where one can say with confidence that no individual will want to run up enormous costs to vindicate their claim.  At the other end of the spectrum there will be high value individual claims which could be brought by large companies with deep pockets.  But in between those two extremes, a reasonable number of competition damages claims are brought by companies acting together to vindicate their rights whilst minimising their exposure to costs.  It is open to argument whether, on Lord Briggs’s approach, the Tribunal could decide that although a proposed class of claimants might not each individually bring their own claim, it would be preferable for them to get together into groups to bring claims; or perhaps for one claim to proceed as a test claimant; or perhaps for collective proceedings to be brought on an opt-in rather than an opt-out basis. 

Another uncertainty is whether the Tribunal could take into account the degree of estimation that the proposed collective proceedings would require.  This is something of a knotty point.  The Supreme Court has emphasised that the court’s role is to assess damages in a broad-brush way, and it therefore sets a strong tone against refusing certification simply on the grounds that the collective proceedings will require damages to be estimated.  However, it is worth noting that one factual feature of the Merricks case was that the applicants’ expert said that the process of working out aggregate damages in that case would be the same as the process which would be required if any individual had brought a case.  That will not be the case in every proposed collective action.  Take, for example, a case where the proposed claimant class is made up of companies which have passed on the overcharge in different amounts to their own customers.  If one of those claimants were to bring its own claim then the Tribunal would be able to assess the degree of pass-on by that company using the company’s own data.  In contrast, if collective proceedings were brought for the whole class of claimants then the process of estimating damages would be likely to be far more broad-brush.  It is open argument whether the defendant could say, in such a case, that it is unfair for damages to be determined on such a broad-brush basis when they could be determined in a more tailored way, if class members were to bring their own claims.

The Pride case gives another interesting example of the grey areas.  What happened in that case, in summary, was that certification was refused because the Tribunal decided that the binding findings in the infringement decision did not support the full breadth of the theory of harm that was being advanced.  The Tribunal essentially invited the applicant to return with a smaller class, but instead the applicant withdrew the application.  It is interesting to ask whether, if the Tribunal had applied the approach now endorsed in Merricks, it would have rejected the application.  The Tribunal’s analysis involved delving into the economic evidence, and testing the strength of the legal case, which is probably not something that would happen post-Merricks.  But on the other hand, it seems likely that the respondent could have achieved the same result by making a strike out or summary judgment application to be heard at the same time as the application for certification.  Similar issues, raising questions of mixed fact and law, are likely to arise in other collective action cases, and it therefore seems likely that strike out or summary judgment applications will be an additional feature of future certification hearings.

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by | September 15, 2020 · 12:34 pm

The Supreme Court’s decision in Unwired Planet – what comes next?

Introduction

The UK Supreme Court has handed down its long-awaited judgment in Unwired Planet. Its decision has profound implications for patent owners and implementers alike and is likely to lead to heavily contested jurisdictional disputes going forward.

These joined appeals concern Standard Essential Patents, or “SEPs”: a patent which the owner has declared to be essential to the implementation of certain telecommunications standards, such as 3G. In practical terms such a patent, if essential as declared and if it is valid, is necessarily infringed by technology implementing the relevant standard, notably mobile phones.  The appellants, Huawei and ZTE, manufacture smartphones and other telecommunications equipment, and implement such technical standards. They were defendants in two sets of patent infringement proceedings. The patent owners, Unwired Planet and Conversant, each had a multinational portfolio said to include SEPs in the UK and elsewhere. They had declared SEPs essential to practising technical standards set by the European Telecommunications Standards Institute (“ETSI”), and given an undertaking to ETSI that they were willing to license SEPs to implementers on “FRAND” terms: Fair, Reasonable and Non-Discriminatory.

The Supreme Court decided as follows:

  • Jurisdiction: The English courts have the power to declare that, as the price for avoiding an injunction restraining infringement of a UK SEP, the implementer has to enter into a global licence; and can determine the rates and terms of such a licence and declare them to be FRAND. (§49-91). The contract created by the ETSI policy confers this jurisdiction: it envisages that national courts will assess whether the terms of an offer are FRAND, looking at ‘real world’ commercial practice. (§58, 62). The Court was also not persuaded that damages, rather than an injunction, were the appropriate remedy (§163-169).
  • Forum non conveniens: in the Conversant claim, the implementers contended that England is not the appropriate forum for this dispute. The Supreme Court upheld the lower court’s rejection of China as a suitable alternative forum as, on the evidence, Chinese courts cannot currently determine terms of a global licence unless the parties agree. (§96-97).
  • Discrimination: Unwired did not discriminate against Huawei by failing to offer the same worldwide royalty rates that it had previously agreed with Samsung. The non-discriminatory limb of FRAND means that a single royalty price list should be available to all market participants based on the portfolio’s market value. (§112-114).
  • Competition law: Huawei had not abused a dominant position contrary to Article 102 TFEU and to the CJEU’s decision in Case C-170/13 Huawei v ZTE. Seeking a prohibitory injunction without notice will infringe Article 102 TFEU, but what is required by way of ‘notice’ is fact sensitive. Unwired had not acted abusively: it had shown that it was willing to grant Huawei a licence on whatever terms that the court deemed FRAND. (§150-158)

What’s next?

First, it is now clear that the UK courts have jurisdiction to rule on the terms of global licences. This could lead to a “race to sue”: implementers may opt to commence declaratory proceedings in their preferred jurisdiction (such as China) as soon as licence negotiations start to break down, so as to prevent the English court being seised of the entire portfolio if the SEP owner sues in this jurisdiction. This “race to sue” effect is compounded by the Court’s decision on Issue (4), i.e. its interpretation of the CJEU’s Huawei v ZTE. The factors therein are guidance, not “mandatory requirements” or “prescriptive rules” (§151-152; 158), and Unwired did not need to propose a licence on the specific terms which the English court later determined were FRAND. (§158) This may reduce the consultation carried out by patent owners in future, before choosing to sue an implementer in the UK.

Moreover, now that the UK and German courts (§75-78) have empowered themselves to settle the terms of global licences, other jurisdictions may well follow suit: notably, China and the USA. We should expect to see some hotly contested jurisdiction disputes in the next few years, centred on:

  • Forum non conveniens: The ratio of the Supreme Court’s decision on this point was narrow, focussing on the current practice of the Chinese courts. However, the Court also indicated, in obiter dicta, its agreement with the lower courts’ characterisation of the dispute (§95-96); namely, that global FRAND determination only arises as an issue in the context of relief for UK patent infringement and that it is up to the patent owner which national patents to assert. It is unclear whether the High Court will in future characterise the UK as the appropriate forum for pursuit of UK patent claims involving global licence disputes. The Supreme Court’s reference to “further issues” that could have arisen if China had been an available alternative forum (§98) leaves open the possibility of implementers resurrecting arguments as to the suitable forum.
  • Case management stays: Where there are American or Chinese FRAND proceedings underway, there may be strong arguments to stay UK proceedings. The English courts will no doubt closely scrutinise the comity and propriety of litigating the FRAND assessment here; thereby imposing global terms on multinational companies like Samsung, Huawei and ZTE. The UK generally accounts for only a tiny proportion of relevant sales of such entities: in the Conversant proceedings, Huawei claimed that the Chinese market accounted for 56% of its worldwide sales on which Conversant made claims. The UK market by contrast comprised 1% of relevant sales. As to ZTE, 0.07% of its turnover came from the UK and 60% of its operating revenue came from China. Both entities manufacture in China. (§37).

Secondly, the Supreme Court’s decision on non-discrimination is potentially highly important, in practical terms. The Court twice referred to a single royalty “price list” available to all licensees irrespective of their individual characteristics. (§114)  This raises the prospect that going to court could present risks for SEP owners; on the Supreme Court’s approach, once the court has set a fair and reasonable global rate, it appears that the patent owner will then have to offer that rate to all putative licensees.

Thirdly, like the lower courts, the Supreme Court drew succour from the prospect of global “FRAND” licences including a clause which reduces the rate payable if foreign patents are later found to be invalid or inessential. The ‘adjustment’ clause imposed by Birss J in the Unwired proceedings had problems, however ([2017] EWHC 2988 (Pat), §582-592): it only applied to “major markets” and did not provide any adjustment to royalties payable if there was a successful challenge to Unwired’s Chinese patents (§47, 65). Inevitably, the Supreme Court’s decision means that there will be much focus, in negotiating the terms of a global FRAND licence, on the drafting of these ‘adjustment’ clauses.

Conclusion

The Supreme Court’s decision has settled the law definitively on the power of the English courts to determine the terms of global FRAND licences for SEPs. However, it leaves important practical implications unresolved. The judgment, while providing clarity on the jurisdictional aspect, is unlikely to be the last word on questions of comity and the proper role of foreign courts; the dictates of non-discrimination; or the drafting and interpretation of ‘adjustment’ clauses, and how they will operate in practice. Moreover, other national courts may well start asserting jurisdiction over these disputes, particularly in countries which account for a far greater proportion of relevant sales than the UK market. The questions posed by this article are therefore likely to play out before the English courts in coming years.

 

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by | April 16, 2019 · 8:11 pm

Merricks v MasterCard: Collective Actions Reinvigorated

The Court of Appeal today gave its much-anticipated judgment in the application to bring collective proceedings against MasterCard: see Merricks v MasterCard Incorporated and others [2019] EWCA Civ 674.  It is a major victory for the Applicant and will reinvigorate the collective proceedings regime, which has seen disappointingly few cases brought since its introduction in 2015. Continue reading →

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by | March 5, 2019 · 12:38 pm

A warning before bringing an appeal to the CAT? Costs after the BCMR decision

The Court of Appeal’s judgment in the recent BCMR costs case is a stark warning to all those considering challenging a regulatory decision in the Competition Appeal Tribunal: even if you win, you may still face a big costs bill.  See British Telecommunications plc v Office of Communications [2018] EWCA Civ 2542.

Unlike the position in most civil courts under the CPR, in the CAT there is no prima facie rule that the unsuccessful party must pay the costs of the successful party. By rule 104(2) of the CAT Rules 2015, the CAT has a discretion to make “any order it thinks fit in relation to the payment of costs in respect of the whole or part of the proceedings.” Rule 104(4) sets out a list of factors that may be taken into account when making an order under rule 104(2) determining the amount of costs which includes, amongst others, whether a party has succeeded on part of its case, even if that party has not been wholly successful.

The previous practice of the CAT in relation to costs distinguished between certain categories of case. In relation to “dispute resolution appeals” (i.e. appeals against decisions made by Ofcom resolving a price dispute under s.185 of the 2003 Act) the starting point was that there would be no order as to costs against Ofcom if it had acted reasonably and in good faith. That made good sense because, in such a case, Ofcom simply acts as an arbiter between two competing private parties. However, in the case of “regulatory appeals” (i.e. appeals made against decisions made by Ofcom in the regulatory context) the starting point was that costs follow the event. This approach was developed by the CAT in Tesco plc v Competition Commission [2009] CAT 26 and PayTV [2013] CAT 9.

Ofcom’s principal submission in the BCMR case was that the Tesco and PayTV decisions were based on a fundamental misunderstanding of the applicable authorities. The Court of Appeal agreed, finding that the CAT had taken inadequate account of principles set out in analogous cases in the regulatory context. Principally, in Perinpanathan [2010] EWCA Civ 40 at §76, Lord Neuberger summarised the position as follows:

“[i]n a case where regulatory or disciplinary bodies, or the police, carrying out regulatory functions, have acted reasonably in opposing the granting of relief, or in pursuing a claim, it seems appropriate that there should not be a presumption that they should pay the other party’s costs.”

The Court of Appeal held that those principles are directly applicable to the current case even though, as it acknowledged, Perinpanathan was not a competition case and did not concern an appeal in a specialist tribunal such as the CAT (at §69).

The important point was that, in each case, the regulators were acting solely in pursuit of their public duty and in the public interest in carrying out regulatory functions. The question which the CAT should have asked was whether there were specific circumstances of the costs regime which rendered the principles inapplicable. As a matter of principle, if Ofcom has acted purely in its regulatory capacity in prosecuting or resisting a claim before the CAT and its actions were reasonable and in the public interest, the Court of Appeal concluded that “it is hard to see why one would start with a predisposition to award costs against it, even if it were unsuccessful.” (at §§72, 83). The decision has therefore been remitted to the CAT for reconsideration, in view of the principles set out in the judgment.

The Court of Appeal added for good measure the CAT had made the same error, of giving inadequate weight to the relevant authorities, in the Tesco case (at §§70, 82). Tesco concerned a successful judicial review under s.179(1) of the Enterprise Act 2002 of the Competition Commission’s decision to introduce a competition test as part of planning applications. The CAT ordered the Commission (now Competition and Markets Authority) to pay Tesco’s costs.

Given the Court of Appeal’s comments, it seems likely that the CAT will be required to reconsider the appropriateness of the loser pays principle not only in regulatory appeals but also in statutory judicial review applications against the CMA’s decisions when the issue next arises.  It is still open to the CAT to decide that, notwithstanding that there is no presumption in favour of costs following the event, it would still be appropriate for the regulator to pay the costs of the losing party, perhaps to avoid what BT says would be the ‘chilling effect’ of depriving the winning party of its costs in such cases. However, the Court of Appeal has made clear that successful appellants can no longer assume that their claims for costs will be looked on favourably.

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by | February 19, 2019 · 9:36 pm

Retrospective interpretation: DSG v MasterCard

The latest battle over limitation in Competition damages claims was a victory for the claimants – see DSG Retail Ltd v MasterCard Inc [2019] CAT 5.  In some ways it is a surprising decision, because the Competition Appeal Tribunal has decided that when s.47A of the Competition Act was enacted in 2003, certain claims which were time-barred prior to its enactment were revived.  The Tribunal frankly acknowledged that it did not find the matter straightforward, and looking at the rules it is easy to see why.

It used to be the case that competition damages claims could only be brought in the civil courts, where they would be subject to the usual six-year limitation rule (subject to extensions in various circumstances which need not concern us here).  In 2003 a new route was introduced: claimants became entitled bring follow-on claims in the CAT under s.47A, which had its own bespoke limitation regime.  That regime included this provision, which was found in rule 31(4) of the 2003 CAT Rules:

“No claim for damages may be made if, were the claim to be made in proceedings brought before a court, the claimant would be prevented from bringing the proceedings by reason of a limitation period having expired before the commencement of section 47A.”

Rule 31(4) was dropped when the rules were revised in 2015.  The position now is that claimants can still bring s.47A follow-on claims, including for periods pre-2015, but such claims are no longer subject to rule 31(4). The Tribunal had to decide the related questions of what the consequence was of dropping rule 31(4), and what the rule meant in the first place.

The most obvious interpretation of rule 31(4) is that claimants could not bring follow-on claims under s.47A if the claims would have been time-barred in 2003 when s.47A was introduced.  Thus, if an infringement lasted from 1993 to 2003 (and assuming that it was not deliberately concealed), the claimants could have brought a s.47A claim for damages going back as far as 1997 but no earlier.  That would make good sense because it would mean that the introduction of the s.47A regime did not ‘revive’ claims that had otherwise expired.

The main problem with that ‘obvious’ interpretation is that it would lead to very strange consequences when, in 2015, rule 31(4) was dropped.  One possibility is that the effect of dropping rule 31(4) was that, all of a sudden and for no apparent reason, from 2015 claimants were allowed to bring claims for damages which were time-barred in 2003 and which had remained time-barred until 2015.  That would be very surprising.  The only way to avoid such a result would be to say – and this is essentially what MasterCard said – that the rules should continue to be applied as if rule 31(4) still applies.  But that is  an ambitious argument given that the rule was deliberately dropped.

The Tribunal resolved these problems by deciding that what I have called the ‘obvious’ reading of rule 31(4) is wrong.  In fact, the Tribunal held, rule 31(4) required one to ask whether the entire proceedings would have been time-barred in 2003 when s.47A was introduced.  If the answer is that the proceedings would not have been time-barred, because some of the damage was still within the limitation period, then the claimants could have started s.47A follow-on proceedings for the entire loss.  Thus, to take my example of an infringement lasting from 1993 to 2003, the fact that the 1997-2003 period was not limitation-barred in 2003 meant that claimants were entitled to start s.47A proceedings for the entire 1993-2003 period.  Section 47A therefore did, in this limited sense, revive claims that had otherwise expired.

This approach to rule 31(4) has the particular attraction of enabling one to explain why the rule was dropped in 2015.  The explanation, according to the Tribunal, is a practical one: it is extremely unlikely that there will be an infringement decision after 2015 which relates to damages which were entirely limitation-barred in 2003.  Thus, rule 31(4) is no longer practically necessary; the problem with which it was concerned will no longer arise.

The upshot of all of this is that the Tribunal has decided that rule 31(4) never prevented claimants from pursuing claims going back as far as 1993 (or earlier), provided that some part of the damage was suffered in or after 1997, and the fact that rule 31(4) has now been dropped is entirely understandable and makes no practical difference.  Claims can still be brought going back to 1993 (or earlier).  It is undoubtedly a neat solution.

On the other hand, consider this.  It seems pretty unlikely that any claimant who had brought a claim in, say, 2004, or 2014, would have been able to persuade the Tribunal that the 2003 rules had revived claims that were otherwise time-barred.  It is only because the rule was revoked in 2015, and because the Tribunal used the fact of revocation as being relevant to its meaning when originally enacted, that the Tribunal interpreted the rule in the way that it did.  Thus, claims which were time-barred in 2003, and which would probably have been treated as time-barred up until 2015, are now to be treated as having been revived in 2003.  That may well be the least bad interpretation of the regime, but one can well understand why the Tribunal did not find the matter at all easy.

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by | September 7, 2018 · 10:32 am

Anchoring claims to a UK subsidiary

The recent decision of the High Court in Vattenfall AB v Prysmian SpA [2018] EWHC 1694 (Ch) is another example of claimants being allowed to use non-addressee English subsidiaries as anchor defendants for their competition damages claims.  It is also another example of the court considering but not actually having to decide the interesting legal points around attribution of liability which potentially arise in such cases.

There have now been several cases with the same basic structure: the European Commission decides that a company is liable for a competition law infringement and some claimants then start proceedings against that company’s English subsidiary in order to establish jurisdiction in England.  The defendant objects to the claimants’ attempt to sue an entity which was not, after all, an addressee of the Commission’s decision simply to use it as a means of bringing proceedings in London.

The problem which defendants face in such a scenario, and the reason why they keep losing these cases, is that it is relatively easy for claimants to allege that the English subsidiary was knowingly involved in the infringement.  If the Commission has found that there was an EU-wide infringement then it will often be entirely proper for the claimants to infer, at least sufficiently to meet the low threshold for establishing jurisdiction, that the infringement was implemented in England through the English subsidiary.  In Vatenfall the claimants had the additional benefit of being able to point to concrete evidence in support of their knowing implementation plea.  Provided that such a plea is properly made, a standalone claim can be run against the English subsidiary which can then be used as the anchor defendant.

The more interesting legal question is what the position would be if a claimant cannot properly plead a standalone case of knowing implementation against the English subsidiary.  Could the parent’s liability be attributed to the subsidiary so that the subsidiary can be sued and used as an anchor defendant even though it was not involved in the cartel?  The English judges who have considered this question have expressed different views about it.

One view is that the answer is that liability can be attributed from an infringing subsidiary to its parent company but not the other way round.  Supporters of this view point to the fact that, when discussing attribution of liability in the line of cases starting with Akzo Nobel NV v European Commission [2009] 5 CMLR 23, the European Courts have been concerned only with imputing liability to a parent company, and that they only permit such attribution if the parent exercised a ‘decisive influence’ over the infringing subsidiary.

The problem, however, is that the reasoning in the Akzo Nobel line of cases is expressed in quite wide-reaching terms.  The basic logic is that if the parent and subsidiary are part of the same single economic unit then they form a single undertaking, and that if an undertaking infringes competition law then all of its legal entities are liable for the breach.  The ‘decisive influence’ test is really about determining whether the parent and subsidiary are part of the same economic unit, not an additional threshold for the attribution of liability between companies which are in the same economic unit.

Thus the alternative view is that the liability can be attributed between any and all companies in the same undertaking.  This has caused some consternation among English judges because of its apparently wide-reaching consequences.  Does it mean that liability could be attributed to a subsidiary with no knowledge of or involvement in a cartel?  Or even from one subsidiary to another?

In the Sainsbury’s case ([2016] CAT 11) at [363] the CAT suggested something of a compromise: liability could be attributed between companies in the same undertaking but only if they had “in some way” participated in the breach or otherwise exercised a decisive influence over a company which did.  That is a sensible solution, but it might be said that it still sits somewhat uncomfortably with the reasoning in Akzo Nobel.

A different way of formulating the point might be as follows.  In accordance with the reasoning in Akzo Nobel, liability can always be attributed between companies in the same undertaking.  However, when asking whether companies are in the same “undertaking” one needs to keep in mind that the identification of an undertaking depends on the circumstances.  In a competition infringement case, the question is whether the companies acted as a single economic unit for the purposes of the infringement.  If they did then they are all part of the same undertaking and they are all liable.  If they did not then they are not part of the relevant undertaking and liability cannot be attributed to them from any other company in the group.

If this approach is correct then a subsidiary which genuinely had nothing to do with an infringement will not be liable for it.  But a subsidiary which, whether knowingly or not, acted in concert with other group companies such that they operated as a single economic unit to implement an infringement will be liable for it.  That is essentially (with slightly different reasoning) the approach which appealed to the CAT in Sainsbury’s, and it is a solution which avoids some of the extremes of other proposed solutions.

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by | August 4, 2017 · 5:33 pm

Collective (in)action? The CAT’s recent judgments on collective proceedings orders

At first glance, two recent judgments from the CAT may give the impression that the new UK class action regime is dead in the water. However, on closer inspection there is much in these judgments that prospective claimants will welcome.

The first decision was in the Pride mobility scooters case (see Tom Coates’ blog here). The CAT made clear that it might have been prepared to grant a collective proceedings order (“CPO”), but on a basis so narrow that the claimants chose not to proceed. In the second decision, Merricks v Mastercard Inc & Ors [2017] CAT 16, the CAT rejected the CPO application, bringing an end to what would have been an extraordinarily ambitious claim—on behalf of 46.2 million people, seeking aggregate damages of approximately £14 billion, for Mastercard’s unlawful setting of fallback multilateral interchange fees in breach of Article 101 TFEU.

Under the new provisions in s.47B of the Competition Act 1998, a CPO application must satisfy the CAT of two criteria. They are, in brief, that (i) the person bringing the proceedings is an appropriate representative of the class of claimants, and (ii) the claims are eligible for inclusion in collective proceedings.

In Merricks, as in Pride, the applicants succeeded on the first criterion but failed on the second. The CAT adopted a relatively liberal approach to certifying the class representative in both cases: a former ombudsman and consumer protection advocate in Merricks (§§93-94), and an advocate for pensioners’ rights in Pride (§§125-139).

The CAT was also satisfied with the litigation funding arrangements in both cases (Pride, §§140-145; Merricks, §§95-140); although it strongly criticised the “impenetrable” drafting of the American-style funding agreement in Merricks, and was only prepared to approve it in light of amendments proposed at the hearing: §§121-127. Prospective claimants will welcome the fact that, in neither Pride nor in Merricks was the CAT unduly concerned by the prospect of a shortfall between the applicants’ costs cover and respondents’ likely costs.

Where both claims failed, however, was on the eligibility criterion. This second criterion is further broken down in rule 80 of the CAT Rules 2015, which provides that claims will be eligible for inclusion in collective proceedings where they (a) are brought on behalf of an identifiable class of persons; (b) raise common issues; and (c) are suitable to be brought in collective proceedings.

In both cases, the CAT was prepared to accept that the claims were brought on behalf of an identifiable class of persons. In Pride that conclusion was uncontroversial, given that the class was defined as “any person who purchased a new Pride mobility scooter other than in the course of a business in the UK between 1 February 2010 and 29 February 2012” (§§5, 85). In Merricks, however, the CAT’s apparent acceptance of the class was no small matter. The class included all individuals who were over 16 years old at the time of the transaction, resident in the UK, and who purchased goods or services from UK businesses which accepted MasterCard cards, at any time over a 16 year period (§1). This included more than 46 million potential claimants; and yet, the CAT was untroubled by the “identifiable class” criterion.

As to the requirement that the claims raise common issues, in both cases the CAT emphasised that the appropriate approach was that followed in Canada, rather than the much stricter approach in the United States (Merricks, §58; Pride, §105). Although only three of the six issues in Merricks could properly be regarded as common, the CAT considered that to be sufficient.

In Pride, the applicant faced the difficulty of proving causation in circumstances where the regulator had focused on a small sample of infringing agreements (“the low-hanging evidential fruit”: §109), and the claimants were time-barred from pursuing anything other than a follow-on claim for the infringement (§110). The CAT’s decision on this issue may well create difficulties for other follow-on vertical infringement claims, but that category of claims is likely to be quite narrow.

In Merricks, the CAT was concerned about the methodology by which the applicant proposed to assess individual losses. The methodology needed to distinguish between three sets of issues: “individuals’ levels of expenditure; the merchants from whom they purchased; and the mix of products which they purchased” (§88). Regrettably, there had been “no attempt to approximate for any of those in the way damages would be paid out” (§88). The CAT observed that the experts’ oral evidence in response to questions from the Tribunal was “considerably more sophisticated and nuanced than that set out, rather briefly, in their Experts’ Report” (§76), but it still could not be satisfied that the damages sought would broadly reflect “the governing principle of damages for breach of competition law”, that is, “restoration of the claimants to the position they would have been in but for the breach” (§88). The judgment sounds a valuable warning to future claimants of the necessity for a detailed and precise methodology for calculating both individual and aggregate losses.

The CAT showed little sympathy for the applicant’s argument that refusing the CPO would result in a vast number of individuals who suffered loss going uncompensated, since there was no realistic prospect of claimants pursuing Mastercard individually. The CAT observed shortly that this was “effectively the position in most cases of widespread consumer loss resulting from competition law infringements” (§91).

The judgments in Pride and Merricks provide important guidance on the CAT’s likely approach to CPOs in future. In spite of the outcomes in both cases, the CAT’s ready acceptance of the proposed class representatives, its flexibility in regard to litigation funding, and its affirmation of the Canadian approach to collective action, are all likely to give heart to prospective claimants. Further, the judgment in Merricks leaves the door open to mass claims in the future, while signalling the heightened importance which expert evidence on calculating losses is likely to assume in such cases.

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by | April 28, 2017 · 11:42 am

Illegal counterfactuals: the Court of Appeal shuts the back door

Suppose a defendant to a competition claim runs a defence that, in the counterfactual world in which no anticompetitive conduct occurred, pricing would have been no different; and that the claimant replies, “maybe so, but only because you were at the same time operating some independent anti-competitive scheme, which must also be purged from the counter-factual”. Can the claimant amend his claim to plead the independent anti-competitive scheme raised in his Reply as the basis for a new substantive claim even where it would ordinarily be time-barred?

In February last year, Barling J appeared to answer, “Yes”, in a judgment given in the MasterCard litigation. On one view, the curious result of that judgment was that a claimant could apparently circumvent limitation rules by introducing a time-barred allegation of unlawfulness in his Reply, then using that as a basis to apply to amend his original claim. In other words, when a limitation point blocked the front door, claimants could still bring in new claims through the back.

The Court of Appeal, however, has now shut this back door, by overturning the High Court’s judgment. For the background to the judgments, and the details of Barling J’s decision, see my previous post here.

The issue before the Court was whether or not the new claim, premised on MasterCard’s Central Acquiring Rule (CAR) arose out of the same or substantially the same facts as the existing claim, premised on MasterCard’s Multilateral Interchange Fees (MIFs) (see CPR 17.4 and section 35(5) of the Limitation Act 1980). If it did, the Court could permit an amendment notwithstanding that it was time-barred. Barling J had held that it did on the following two grounds: first, the existing claim would already require an investigation into and evidence on the CAR; and, secondly, the claimants’ reply had pleaded that the CAR was unlawful and had to be excised from MasterCard’s counterfactual – so the new claim arose out of facts already in issue with respect to the existing claim.

The Court of Appeal disagreed with Barling J on both scores. Sales LJ said that the facts underlying each claim could not be said to be the same because the counterfactual inquiry required by each claim was so different (§46). On the existing claim, the counterfactual world was one in which the MasterCard rules in dispute (principally the MIFs) were excised but the CAR remained in place. On the new claim, however, the Court would have to investigate both the counterfactual world in which the MasterCard rules were excised as well as the CAR and the counterfactual world in which all the MasterCard rules remained in place but the CAR was excised.

Sales LJ, doubting the obiter comments of Waller LJ in Coudert Brothers v Normans Bay Ltd [2004] EWCA Civ 215, further said that the claimants could not introduce the new claim by pointing to their reply and saying that the CAR’s lawfulness was already in issue. The proper rule was that, where the defendant had pleaded facts by way of defence to the original claim, the claimant could introduce a new claim premised on those facts: Goode v Martin [2002] 1 WLR 1828. However, that was not the case here because MasterCard did not specifically rely on the CAR in its defence.

The Court of Appeal was further clearly motivated by a concern about the avoidance of limitation rules. Sales LJ said at §64:

“…it would be unfair to a defendant and would improperly subvert the intended effect of limitation defences set out in the Limitation Act if a claimant were to be able to introduce new factual averments in its reply (which are not the same as or substantially the same as what is already pleaded in the claim), after the expiry of a relevant limitation period, and then rely on that as a reason why it should be able to amend its claim with the benefit of the “relation back” rule to circumvent that limitation period.”

The curious result of Barling J’s judgment has therefore been reversed by the Court of Appeal. A claimant can no longer pull himself up by his own bootstraps; limitation now guards the back door as jealously as the front.

 

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by | April 6, 2017 · 10:12 am

Collective Proceedings in the CAT: mobility scooters roll on for now

Last Friday the CAT handed down a judgment on the first ever-application for a collective proceedings order under the new regime introduced by the Consumer Rights Act 2015. The judgment will generally be welcomed by potential claimants, but it has a sting in the tail which may cause serious difficulties for class actions in other vertical infringement cases.

The new collective proceedings regime, contained in section 47B CA98 and CAT Rules 75-98, was one of a suite of claimant-friendly measures aimed at improving the remedies for individual victims of competition infringements whose losses were low (other measures included, for example, the new fast-track procedure). Consistently with the regime’s objective, the CAT, although stopping short of reaching a final decision, said much about the scheme which will encourage claimants.

The proposed collective action is a follow-on claim against Pride, formerly the UK’s largest supplier of mobility scooters. The OFT (the national competition regulator) had found that Pride infringed the Chapter I prohibition by object by entering into 8 vertical agreements with retailers forbidding them from advertising mobility scooters online at prices below RRP. Those 8 agreements were in fact the result of a market-wide policy that Pride had been operating and which it had communicated to all of its retailers.

The key issues before the CAT were (broadly) the authorisation of Dorothy Gibson as the class representative (under section 47B(5) and CAT Rule 78), and certification of the claims for inclusion in collective proceedings on the basis that they raised common issues. On both issues, the CAT’s approach to the claimants was benevolent.

The CAT first dismissed the defendant’s preliminary objection. Pride pointed out that both the OFT decision and the underlying infringement pre-dated the introduction of the collective proceedings regime. On that basis, it fired a salvo of arguments based on Article 1 Protocol 1 of the ECHR, the EU Charter, and EU principles of legal certainty/legitimate expectations, the thrust of which was that the CAT should interpret the regime so as to disallow its “retrospective” application. The CAT shot down all these arguments in a comprehensive discussion that should see the end of any similar threshold points about collective proceedings applications.

The CAT also had little difficulty in authorising Ms Gibson as the class representative. Although not a mobility scooter consumer, her status as an advocate of pensioners’ rights (she is the chair of a representative body, the National Pensioner Convention), who had experienced lawyers, satisfied the CAT that she would act fairly and adequately in the interests of the class (§139; see CAT Rule 78(2)(a)). Moreover, the CAT was not concerned about her ability to pay Pride’s costs (see CAT Rule 78(2)(d)). Even though Ms Gibson’s ATE insurance cover level was less than Pride’s anticipated costs, the CAT stated shortly that those costs might not be reasonable or proportionate, so it would not be appropriate to disallow collective proceedings at that stage (§145).

The CAT’s approach to certification and commonality was also – in principle – liberal. Although it said that it could not “simply take at face value” (§102) the applicant’s expert evidence, it nonetheless rejected Pride’s submission that it should take a hyper-rigorous US-style attitude. Rather, the CAT endorsed the Canadian approach, approving at §105 the following comment of Rothstein J in Pro-Sys Consultants Ltd v Microsoft Corp [2013] SCC 57:

“In my view, the expert methodology must be sufficiently credible or plausible to establish some basis in fact for the commonality requirement. This means that the methodology must offer a realistic prospect of establishing loss on a class-wide basis so that, if the overcharge is eventually established at the trial of the common issues, there is a means by which to demonstrate that it is common to the class (i.e. that passing on has occurred). The methodology cannot be purely theoretical or hypothetical, but must be grounded in the facts of the particular case is question.”

The stumbling block for the claimants, however, was the CAT’s reasoning on the proper counterfactual. The claimants posited a world in which not only the 8 infringing vertical agreements were absent but also where Pride had operated no policy of prohibiting below-RRP advertising at all. The CAT, however, endorsed a narrower counterfactual from which only the specifically unlawful agreements (i.e. the 8 vertical agreements about which the OFT had made findings) were assumed to be absent (§112). With this narrower counterfactual, the CAT held that it was not clear whether there was sufficient commonality in the issues of loss, or whether the likely damages would justify the costs of collective proceedings. However, the CAT (again perhaps generously) did not dismiss the application altogether but rather adjourned it to enable the claimants’ expert to formulate a case on common loss on the basis of the revised counterfactual.

Notwithstanding the generally claimant-friendly approach, the CAT’s reasoning on the counterfactual could render other collective cases premised on vertical restraints very difficult in practice. In a large number of vertical restraint decisions, the infringer has adopted a market-wide policy but the regulator focuses, for practical reasons, on a small number of ‘implementations’ of the policy as the basis for its infringement findings. If one only excludes from the counterfactual the particular instances of unlawful implementation, rather than the more general policy which underlay them, the issues between class members may diverge: some will have been direct victims of the anti-competitive agreements, while others will have suffered only from what would have to be characterised as an “umbrella effect”. In addition, if claimants cannot proceed on the basis that the entire policy should be excluded from the counterfactual, the likely quantum may fall to a level where collective proceedings are not worth the candle. It remains to be seen whether the mobility scooter claimants will overcome these difficulties.

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by | March 7, 2017 · 10:15 pm

When is an antitrust/competition claim caught by an arbitration clause? The Microsoft Mobile decision

The decision of the High Court in Microsoft Mobile Oy (Ltd) v Sony offers some helpful guidance as to when a competition law tort claim will be caught by an arbitration clause in a sale or supply agreement.

Competition law claims frequently complain about prices, on ground of collusion or abuse.  Those prices may already have been charged, or they may yet to be charged.  If the price in issue has already been charged then it will almost invariably be contained in a written sale or supply agreement.  It may be the product of a specific contractual mechanism to settle a price.  If the relevant agreement contains an arbitration clause, does it catch a competition law claim complaining about the price charged?

The starting point in this regard is that a detailed semantic analysis of the particular arbitration clause in question is unlikely to provide the answer.  As Lord Hoffmann observed in Fiona Trust v Privalov [2007] 4 All ER 951 at para 13:

“…the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to have entered to be decided by the same tribunal. The clause should be construed in accordance with this presumption unless the language makes it clear that certain questions were intended to be excluded from the arbitrator’s jurisdiction.”

This “one-stop shop” presumption has helped greatly in reducing disputes about the ambit of arbitration clauses.  But its application in the competition law context has been less straightforward, because of debates about precisely what the rational businessman would intend in respect of such claims.

The net effect of the law to date is that competition law claims will be regarded as coming within an arbitration clause only if they are closely related factually to a viable contractual claim which has already been, or could be, made.  Thus, for example, in ET Plus SA v Welter [2006] I.L.Pr. 18, the key consideration for Gross J in finding that competition law claims were within an arbitration clause was that they were “simply a variant on the familiar factual theme” which could be discerned from contractual claims already made (see para 51).

Conversely, in Ryanair Ltd v Esso Italiana Srl [2015] 1 All ER (Comm), the Court of Appeal held that the absence of any viable form of contractual complaint about an allegedly cartelised price rendered it impossible to claim that a competition law complaint about the same price was within an exclusive jurisdiction clause.  Having referred to the one-stop shop presumption in Fiona Trust, Rix LJ then held at para 53 that:

“Such reasoning, however, does not carry over into a situation where there is no contractual dispute (by which I intend to include disputes about contracts), but all that has happened is that a buyer has bought goods from a seller who has participated in a cartel. I think that rational businessmen would be surprised to be told that a non-exclusive jurisdiction clause bound or entitled the parties to that sale to litigate in a contractually agreed forum an entirely non-contractual claim for breach of statutory duty pursuant to article 101, the essence of which depended on proof of unlawful arrangements between the seller and third parties with whom the buyer had no relationship whatsoever, and the gravamen of which was a matter which probably affected many other potential claimants, with whom such a buyer might very well wish to link itself.”

The English Courts therefore treat competition law claims essentially as falling outside the one-stop shop presumption unless they are, factually, simply a variant on the theme of an arguable contractual claim.  This was, furthermore, the approach of the CJEU in Case C-352/13 CDC v Akzo [2015] QB 906, in which it was held that a clause “…which abstractly refers to all disputes arising from contractual relationships” would not cover tortious liability as a result of a cartel, because “…the undertaking which suffered the loss could not reasonably foresee such litigation at the time that it agreed to the jurisdiction clause” (paras 69-70).

The latest word on this topic is the Microsoft decision.  Microsoft brought a claim in the English Courts for damages for the allegedly anti-competitive tortious conduct of Sony, LG and Samsung in relation to the pricing of Li-Ion batteries.  All the allegedly cartelised supplies by Sony had been made pursuant to an agreement with an arbitration clause requiring “any disputes related to this Agreement or its enforcement” to be settled by ICC arbitration.  Sony applied to stay the proceedings under section 9 of the Arbitration Act 1996, arguing that the arbitration clause covered the tort claims made against it.

Mr Justice Marcus Smith held that, on an orthodox application of the principles identified in Ryanair, the question of whether the tortious claims were within the arbitration clause depended on whether the conduct giving rise to the tortious claims also gave rise to an arguable contractual claim.  As he observed, “…it is difficult to see how a tortious claim can arise out of a contractual relationship when the only claim in contract that can be said to be related is unarguable” (para 54).

The unusual incentives created by this (correct) understanding of Ryanair can be seen from the fact that Sony was accordingly required, in order to succeed in its application, to formulate a contractual claim against itself which Microsoft had not advanced.  Sony argued that because the relevant prices had been subject to an express obligation that they be negotiated in good faith, and because Sony was subject to a further obligation to disclose events that reasonably may affect its ability “to meet any of its obligations” under the agreement, the operation of a cartel would have been a clear breach of contract as well as tortious.

The Court accepted this submission, holding that it was “very difficult” to see how Sony could have engaged in the conduct complained of in the tort claims, without also breaching the contract.  On that basis, the competition law claims fell within the arbitration clause.  It did not matter in this regard that Microsoft had not advanced the contractual claim which Sony successfully contended it could have done, because otherwise “…it would be easy for a claimant to circumvent the scope of an arbitration or jurisdiction clause by selectively pleading or not pleading certain causes of action” (para 72(ii)).

The upshot for practitioners is that a decisive consideration when assessing whether a competition law claim falls within a jurisdiction clause is likely to be whether there are any viable contractual claims which “…would be sufficiently closely related to the tortious claims actually advanced by the Claimant so as to render rational businessmen likely to have intended such a dispute to be decided (like a contractual dispute) by arbitration” (Microsoft at para 72).  The existence and extent of any express or implied contractual obligations to observe competition law therefore looks set for detailed examination in competition law claims in the future.

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by | July 27, 2016 · 12:41 pm

Can several wrongs make a right? Gallaher v CMA in the Court of Appeal

When a public body makes a mistake in its treatment of one person, can fairness require it to treat other people in the same way – even if that means amplifying the effects of the mistake?

According to the Court of Appeal in the latest instalment of the tobacco litigation, the answer is yes.  The history of the case is well-known.  The Office of Fair Trading’s decision, that various manufacturers and retailers had committed an infringement in the setting of tobacco prices, collapsed on appeal to the CAT in 2011.  Gallaher and Somerfield, who had entered into early resolution agreements (“ERAs”) with the OFT and therefore decided not to appeal the infringement decision, then sought to appeal out of time.  The Court of Appeal rejected their attempt in 2014, emphasising the importance of finality and legal certainty (see my blog here).

Undeterred, Gallaher and Somerfield pressed on with a different aspect of their case.  They had discovered that another company, TM Retail, had been assured by the OFT when it entered into its ERA in 2008 that, in the event that any other party succeeded on appeal, TM Retail would have the benefit of that appeal.  The OFT’s assurance to TM Retail was based on a mistaken view of the law, since a successful appeal by one addressee of a decision does not normally let non-appellants off the hook.  However, following the successful CAT appeal in 2011, the OFT decided to honour its assurance to TM Retail.  TM Retail’s penalty was repaid (although for reasons which need not detain us the OFT has refrained from calling it a ‘repayment’).  But the OFT also decided that, given that it had not given any similar assurance to Gallaher or Somerfield, it would not repay their penalties.

Gallaher and Somerfield challenged the OFT’s decision on fairness grounds.  The Court of Appeal has now held that the OFT, now the Competition and Markets Authority, is obliged by principles of fairness to treat Gallaher and Somerfield in the same way as it treated TM Retail.  That will mean repaying their penalties, at a cost of something north of £50 million.

The Court of Appeal’s decision recognises that the requirements of fairness will depend on all the circumstances of the case.  The decision is therefore based very heavily on the particular facts of this case.  Of particular importance was the fact that all ERA parties were told that they would be treated equally.  They therefore had a strong expectation of equal treatment.

Nonetheless, the case raises some important questions.

Firstly: what is the significance of detrimental reliance in an equal treatment case?  In cases concerning legitimate expectations, itself a branch of the law of fairness, it is generally the case that a party will not succeed unless he shows that he has suffered some detriment in reliance on the expectation in question.

In this case, Gallaher and Somerfield could not say that the OFT’s assurance to TM Retail was what made them decide not to appeal against the infringement decision.  They didn’t know about the assurance when they chose not to appeal.  The Court of Appeal answers this point by remarking at [44] that:

“the only reason why the appellants could not have claimed that they relied on assurances of the type given to TM Retail was because such assurances had not been given to them …”

But the question is surely not whether Gallaher and Somerfield could “claim” to have relied on assurances: it is whether or not they did in fact rely on such assurances.  They did not.  The absence of such a factor must be relevant to an assessment of what is fair in all the circumstances.

Secondly: what is the significance of the fact that assuring equal treatment will end up costing the public purse a huge amount of money?

The Court does not go into this question in any detail.  It rejects, as a statement of general principle, the contention endorsed by the High Court that a mistake should not be replicated where public funds are concerned.  Instead all depends on the circumstances.  But the Court’s discussion of the circumstances does not consider the significance of the impact on the public purse.

Of course, the point cuts both ways because the heavy impact on the public purse if the penalties are repaid is the mirror-image of the impact of the unequal treatment on Gallaher and Somerfield if the penalties are not repaid.  There is, however, an important question of principle as to how to balance the desirability of ensuring equal treatment, on the one hand, against the unattractiveness of requiring public bodies to magnify their errors at great expense, on the other.  The Court of Appeal explains in detail why the former consideration should weigh heavily in favour of repayment, but it remains unclear whether, or in what circumstances, such factors may be counter-balanced by public expense considerations.

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by | June 9, 2016 · 9:57 pm

Economic complexity: CAT vs High Court

One of the advantages of the Competition Appeal Tribunal is said to be the fact that its three-member panel typically includes an economist. But is that really such a big advantage over the High Court?

The question is particularly topical in light of a couple of recent trends. On the one hand, recent legislative developments have increased the jurisdictional overlap between the CAT and the High Court, so that litigants more frequently face a choice between the two. In making that choice, the CAT’s economic expertise can exert a strong pull. Claimants might plead their case narrowly in order to come within its limited powers. Or, parties might seek to transfer their case across to the CAT from the High Court (not always successfully – see here).

On the other hand, there have been several indications that more could be done to make economic issues accessible to High Court Judges. A high-profile example is the recent Streetmap case, in which the experts gave evidence concurrently in a “hot tub” arrangement. Another example comes from the MasterCard litigation, in which Mr Justice Flaux recently asked whether it might help for the trial judge to be assisted by an expert economist appointed as an Assessor under CPR 35.15. I understand that the suggestion has not been taken any further in that particular case, but the general idea of using Assessors was also endorsed by another judge at a recent lecture on competition litigation.

Another tool which could be used much more widely in competition cases is the use of ‘teach-ins’ at which an independent expert spends time (perhaps a couple of days) educating the judge on the basic economic concepts relevant to the case. Care obviously needs to be taken to ensure that the teacher does not take a stance on controversial issues in the case. But if it is done well, as a recent patent case shows, it can be an invaluable way of helping a judge to prepare for a complex trial.

Of course, all of these techniques could be used in the CAT as well as in the High Court. It is perhaps too easy for parties in the CAT to assume that, just because there is an economist on the Panel, there is no need to do any more to make the economic issues accessible. The economist can only do so much, and the role does not include providing formal training to the other Panellists.

Against that background, it is worth revisiting the advantages of having an economist on the CAT Panel. The first is that he/she is fully involved in the hearing, and able to ask questions of the parties’ expert witnesses. Anyone who appears regularly in the CAT will have seen cases in which it is the economist Panellist who manages to cut through the arguments and identify the central point.

But there is no reason in principle why that advantage could not be replicated in the High Court. An Assessor could be appointed with the function of (among other things) asking question of the expert witnesses.  In practice this would be an unusual request, and of course the parties would need to foot the bill.  But there is no reason in principle why it could not be done.

The other main benefit of having an economist on the Panel is that he/she participates fully in the decision making. He works collaboratively, in private, with the other Panellists as they reach their decision. In contrast, if an Assessor were appointed in the High Court to help the judge reach a decision on the economic issues in the case, his advice would need to be given in public so that the parties could comment on it (see the Court of Appeal’s guidance at paragraphs 18-21 of this patent case). Such a process would be much more cumbersome than that in the CAT, but it would at least ensure that the parties could engage fully with the thinking of every economist involved in the case.

I do not mean to suggest that parties in economically complex cases should flock to the High Court rather than the CAT. But it is worth thinking hard before tailoring a case to fit within the CAT’s limited powers, or getting into a procedural fight over the forum. With a bit of imagination, and provided the parties are willing to pay for it, much can be done to assist the judge in the High Court to match many of the advantages available as a matter of course in the CAT.

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by | April 3, 2016 · 8:18 pm

The Freight-Forwarding Cartels in the General Court: Lessons on Leniency and Discretion

On 29 February 2016, the General Court handed down its judgments in Case T-265/12 Schenker Ltd v European Commission; Case T-267/12 Deutsche Bahn AG and ors v European Commission, upholding the Commission’s decision on the freight forwarding cartels. The judgments provide some useful guidance on the operation of the leniency scheme and highlight the Commission’s broad discretion in deciding to whom it should attribute liability.

The Cartels

The applicants were found by the Commission to be participants in cartels relating to four different surcharges levied in the freight-forwarding sector between 2002-07.

The operation of the cartels was no lesson in subtlety. In the new export system cartel, the participants had organised their contacts in a ‘Gardening Club’ and had re-named surcharges according to vegetables. One set of minutes of the cartel’s meeting distinguished ‘standard asparagus’ from ‘contractual asparagus’, while another email explained ‘new equipment is on its way to enable fresh marrows and baby courgettes to hit the shops this month. Up to my elbows in fertilizer’.

The Commission fined 14 groups of companies a total of €169 million. The applicants were fined approximately €35 million for infringements of Article 101 TFEU and Article 53 of the EEA Agreement.

Leniency

The Commission began its investigation after an application for immunity was submitted by Deutsche Post AG (‘DP’). DP and its subsidiaries received full immunity from fines, while some other undertakings (including the applicants) received a reduction in fines ranging from 5 to 50 per cent.

In order to qualify as an immunity applicant under the Commission’s 2006 Leniency Notice, the evidence provided to the Commission must enable it (inter alia) to ‘carry out a targeted inspection in connection with the alleged cartel’ (paragraph 8(a)) and must include a ‘detailed description of the alleged cartel arrangement’ (paragraph 9(a)). The applicants contrasted the information initially provided by DP with the Commission’s final findings to argue that these criteria had not been met – in particular, no information was provided about one of the specific cartels, the CAF cartel.

The General Court rejected the applicants’ comparative approach. It explained that the Leniency Notice did ‘not require that the material submitted by an undertaking should constitute information and evidence pertaining specifically to the infringements which are identified by the Commission at the end of the administrative procedure’ (at [338], paragraph references in this post are to T-267/12). It was sufficient that the information provided by DP ‘justified an initial suspicion on the part of the Commission concerning alleged anticompetitive conduct covering, inter alia, the CAF cartel’ (at [340]).

The applicants also argued that the Commission had breached the principle of equal treatment by treating DP’s immunity application differently from the leniency applications of other undertakings. When assessing DP’s immunity application, the Commission granted conditional immunity on the basis of the information it had at the time, and then granted final immunity by considering whether those conditions had been satisfied. In contrast, when considering the applications for reductions of fines made by other undertakings, the Commission considered at the end of its procedure whether the information provided had added value.

The General Court upheld this approach. It explained that the Leniency Notice is structured such that an ex ante assessment is to be carried out in respect of applications for immunity only (at [358]). This distinction is justified by the objectives of (i) encouraging undertakings to cooperate as early as possible with the Commission, and (ii) ensuring that undertakings which are not the first to cooperate do not receive ‘advantages which exceed the level that is necessary to ensure that the leniency programme and the administrative procedure are fully effective’ (at [359]).

Attribution of Liability

A further ground of challenge concerned the Commission’s decision to hold Schenker China solely liable as the economic successor for the conduct of Bax Global, rather than including Bax Global’s former parent company.

The General Court noted that the Commission had a discretion concerning the choice of legal entities on which it can impose a penalty for an infringement of competition law (at [142]), but that such a discretion must be exercised with due regard to the principle of equal treatment (at [144]).

In the present case, the Commission had decided to hold liable parent companies of subsidiaries, but not former parent companies of subsidiaries. The General Court was content that such an approach was within the discretion available to the Commission. It was perfectly legitimate for the Commission to ‘take into consideration the fact that an approach designed to impose penalties on all the legal entities which might be held to be liable for an infringement might add considerably to the work involved in its investigations’ (at [148]). This purely administrative reason was sufficient to entitle the Commission to decline to attribute liability to a party who would be jointly and severally liable for the same infringement, even if the necessary consequence were to increase the fine levied against the existing addressee.

Given the sums involved, it would be no great surprise if the General Court’s judgments were appealed to the Court of Justice. In the meantime, there is greater certainty regarding the Commission’s approach to the Leniency Notice, and it is clear that the Commission has broad discretion in identifying the relevant addressees of its infringement decisions.

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by | December 8, 2015 · 10:54 am

Standalone claims in the CAT: bypassing the transitional rules

We have written before about the problems inherent in the transitional provisions of the new Consumer Rights Act 2015 (see Tom de la Mare QC’s blog here). A recent decision from Mr Justice Barling in the Mastercard litigation places a (small) sticking plaster over some of the difficulties.

One problem is that the transitional provisions appear to severely limit claimants’ ability to bring stand-alone claims in the Competition Appeal Tribunal (“CAT”) – in theory you can bring such claims, but you may face much less favourable limitation rules than you would have faced had you started in the High Court.  It is difficult to see this as anything other than a drafting error, since part of the purpose of the new statutory regime was to do away with the oddity of having a specialist competition tribunal unable to hear such claims.

Barling J has found a partial solution to this problem. In Sainsbury Supermarkets Ltd v MasterCard Incorporated [2015] EWHC 3472 (Ch) (see here), he decided that Sainsbury’s standalone claim, issued in the High Court, could be transferred to the CAT – and that, importantly, such a transfer would preserve the limitation position in the High Court.

The Judge held that it did not matter whether or not the claim could have been started in the CAT (and he did not decide that particular issue). What mattered was that it could be transferred there.

The ability to transfer standalone claims to the CAT has obvious advantages for those cases which would benefit from the CAT’s economic and industry expertise. It is somewhat clunky for claimants to have to issue in the High Court (and incur fees there) only to then transfer to the CAT, but it is better than nothing.

It also means that claimants who wish to take advantage of the different limitation provisions in the High Court (in general, better for standalone claims) and in the CAT (in general, better for follow-on) now have the option of starting claims in both jurisdictions and then seeking to consolidate them in the CAT.

Of course, Barling J’s decision does nothing to fix the other problems highlighted in Tom’s blog. Most obviously, it does nothing for standalone class actions, which cannot be started in the High Court and still face the usual problems in the CAT. It is, however, a helpful ‘workaround’ which will go some way towards mitigating the problems caused by the transitional arrangements.

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by | October 9, 2015 · 2:41 pm

Appealing energy price controls: guidance for beginners from the CMA

The CMA recently published its final determinations in two appeals brought by British Gas and Northern Powergrid against Ofgem’s electricity price controls for the next 8 years (decisions here and here). The appeals were the first under section 11C of the Electricity Act 1989 and the CMA’s decisions will therefore be the first port of call for any practitioners considering appeals against not only price controls but also any modifications made by Ofgem to electricity distributors’ licences. Continue reading →

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by | October 1, 2015 · 2:45 pm

PRIVATE ACTIONS: The CRA 2015 giveth; and the 2015 CAT Rules taketh away

Introduction

Today, on the 1st October 2015, when we are supposed to be celebrating the brave new world of the Competition Act 1998 (“CA”) as amended by the Consumer Rights Act 2015 (“CRA”), cartelists and other competition law infringers up and down the land[1] must be rubbing their hands in glee at the transitional provisions contained in Rule 119 of the Competition Appeal Tribunal Rules 2015 (“the 2015 CAT Rules” or the “New Rules”).[2]

The glee stems from the fact that these transitional provisions are very broad in temporal and material scope and yet very narrow in terms of gateway they provide into the new promised lands of flexible standalone claims,[3] and of collective redress leading to effective enforcement of private damages claims.   The problem, in essence is this: these transitional rules set in aspic for an unnecessarily long time the old CAT regime and all its manifest defects, defects which were the express cause for reform in the first place. Continue reading →

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by | September 25, 2015 · 3:49 pm

When should a decision be remitted to a different decision-maker?

The Court of Appeal’s answer to this question in HCA International Limited v CMA [2015] EWCA Civ 492  was, in effect: rarely. The judgment, which contains some serious criticism of the CMA even though it won the case, illustrates just how high the threshold is before a court will insist that a remitted decision should go to a new decision-maker. It is not enough for the original decision-maker to have made a mistake, however conspicuous. Rather, there needs to be a reasonable perception of unfairness or damage to public confidence in the regulatory process.

The background was the CMA’s private healthcare market investigation, which determined that HCA should divest itself of two hospitals in central London. That decision was premised in part on the CMA’s insured price analysis (“IPA”), which HCA argued (on an appeal to the Competition Appeal Tribunal) contained serious flaws. The CMA eventually accepted that its divestment decision should be quashed, and the CAT held that the matter should be remitted to the original CMA inquiry group for re-determination. Continue reading →

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by | September 18, 2015 · 8:46 am

Arcadia v Visa revisited: the Court of Appeal takes a strict approach to limitation

Competition damages claims can be notoriously complex. According to the Court of Appeal, however, that is no reason to free them from the ordinary English rules of limitation – however strict those rules might be.

Unlike the large majority of European limitation rules, where time starts running from the date of the victim’s knowledge, the English rule under the Limitation Act 1980 (“LA 1980”) is that time starts running from the moment the wrong is done, unless the victim can show that the wrong was concealed from him. The claimants in Arcadia Group Brands Ltd & Ors v Visa Inc & Ors [2015] EWCA Civ 883 argued that various relevant facts had been concealed. Ultimately, their difficulty was that they did have sufficient facts available to them to plead their case. Continue reading →

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by | March 20, 2015 · 2:13 pm

Fresh grounds and evidence before the CAT

On the face of it, BT was the main winner in this week’s ruling from the Competition Appeal Tribunal: see British Telecommunications plc v Office of Communications [2015] CAT 6. However, the decision, which makes interesting comments on the rights of parties to adduce new grounds and evidence on an appeal, raises important notes of caution to all parties which may wish to appeal or intervene in future cases. Continue reading →

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by | February 19, 2015 · 12:48 am

Gallaher and Somerfield: will the CMA change its approach to settlement?

The latest episode in the tobacco litigation saga has seen Gallaher and Somerfield’s attempt to benefit from the collapse of the OFT’s case in November 2011 rejected by the High Court in R (Gallaher Group Limited and Ors) v Competition and Markets Authority [2015] EWHC 84 (Admin). Although the CMA will breathe a sigh of relief, Collin J’s critical judgment will give it food for thought on how it conducts early resolution negotiations in competition infringement cases in future. Continue reading →

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by | December 11, 2014 · 11:26 am

The costs of intervening

There is an interesting little point on costs buried away in last week’s decision in the “Ethernet” disputes in the Competition Appeal Tribunal (see BT plc v Cable & Wireless Worldwide Plc and others [2014] CAT 20).

Parties which intervene in CAT proceedings generally know that they are unlikely to recover their costs, even if they intervene in support of the party which is ultimately successful. There are, however, various exceptions to that principle – – and, indeed, in the Ethernet case itself some of the intervenors recovered some of their costs from the unsuccessful party. Continue reading →

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by | October 31, 2014 · 10:25 am

“It’s too late baby, now it’s too late”: limitation, competition claims and knowledge

How much knowledge does a potential claimant need before time begins to run against a competition claim against a party alleged to have breached competition law? This was the key question addressed by Mr Justice Simon in the first case in which an English Court has had to consider the effect of s.32 of the Limitation Act 1980 (“LA”) in the context of a competition claim. Continue reading →

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by | October 30, 2014 · 11:24 am

High Court tests the limits of confidentiality in EC infringement decisions

The European Commission came in for some stern criticism from the High Court this week, in a case which looks set to test the boundaries of confidentiality in EC infringement decisions: see Emerald Supplies v BA [2014] EWHC 3515 (Ch).

The background is the 2010 EC decision fining BA and eleven other airlines a total of €800m for operating a global cartel for air freight services. Hundreds of claimants are seeking damages, and they sought disclosure of a copy of the decision – which, remarkably, has not yet been made public by the EC. Continue reading →

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by | September 28, 2014 · 10:02 pm

Skyscanner: CAT quashes commitments in the online booking sector

In a judgment handed down on Friday, the Competition Appeal Tribunal has quashed the Office of Fair Trading’s decision to accept commitments in the online hotel booking sector. As the first case to consider such commitments, Skyscanner Ltd v CMA [2014] CAT 16 contains some helpful guidance, albeit that Skyscanner’s success actually hinged on a fairly narrow point of regulatory law. Continue reading →

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by | July 10, 2014 · 1:49 pm

Dogma in telecoms, cream for the CAT: 08- numbers in the Supreme Court

The Supreme Court yesterday handed down judgment in British Telecommunications plc v Telefónica O2 UK Ltd & Ors [2014] UKSC 42. Reversing the decision of the Court of Appeal (blogged on here by Emily Neill), Lord Sumption for a unanimous Supreme Court held that there had been no basis for Ofcom to disallow BT’s introduction of “ladder pricing” in wholesale termination charges for certain non-geographic telephone numbers (specifically 080, 0845 and 0870, whence the litigation’s popular name among telecoms lawyers: “08- numbers”). Continue reading →

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by | April 13, 2014 · 6:21 pm

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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by | April 8, 2014 · 10:28 am

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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by | March 4, 2014 · 2:28 pm

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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by | February 25, 2014 · 4:26 pm

“What’s in a Commission Decision?” and other lessons for national courts

In a decision of 13 February 2014, the Court of Justice of the European Union (“CJEU”) added a little gloss to an otherwise well-trodden path in relation to the binding aspects of a Commission Decision. For instance, it is well established that assessments made in recitals to a decision “are not in themselves capable of forming the subject of an application for annulment” unless they are “the necessary support for its operative part” (see Case T-138/89 Nederlandse Bankiersvereniging and Nederlandse Vereniging van Banken v Commission [1992] ECR II-2181 at [31]). What of statements of position by the Commission subsequent to its Decision, e.g. in order to facilitate its enforcement at national level? Continue reading →

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by | January 15, 2014 · 11:59 am

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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