Reform of Private Enforcement of Competition Law in the UK: the Government’s Proposals
[Our friends Christopher Brown (Matrix Chambers and Eutopialaw) and Scott Campbell (Stewarts Law LLP) have kindly offered us a very interesting post on the reform of private enforcement of competition law in the UK. To the best of my knowledge, this is the first written piece commenting on the substance of the proposed reform. With those proposed changes, the UK may be trying to position itself as the leading forum for private actions in Europe. An absolute must read].
A while back, one of us blogged on the UK Government’s consultation, launched in April 2012, on possible reform of the private actions regime in the UK. The consultation was wide-ranging and included several radical proposals designed to facilitate redress for victims of anti-competitive conduct – most notably, the introduction of an ‘opt-out’ collective actions mechanism. Reaction to the consultation from lawyers and business was extensive: the Government received 129 formal responses, and opinion was sharply divided on some issues.
It has inevitably taken some time for the Government to take on board the responses and consider the way ahead, but, since the publication last week of its response to the consultation, we now know what it intends to do. In summary, the Government proposes to
- Strengthen the private law jurisdiction of the specialist judicial body, the Competition Appeal Tribunal (CAT);
- Introduce a “limited” opt-out collective actions regime, with “safeguards” designed to prevent frivolous or unmeritorious claims being brought;
- Promote alternative dispute resolution (ADR); and
- Take some limited action designed to ensure that private enforcement complements public enforcement.
In this post, we take a look at the main proposals, considering some of the likely practical implications of the reforms in the event that they are passed into law.
1. Putting the CAT front and centre of private enforcement in the UK
The first broad proposal is one on which most respondents agreed, at least in broad outline: to make the CAT the ‘go-to’ venue for private competition litigation in the UK. Since acquiring its private law ‘follow-on’ jurisdiction upon the entry into force of the Enterprise Act in 2003, the Tribunal has seen relatively little action, and much of the action it has seen has been in the form of procedural skirmishes relating to the ambit of that jurisdiction (several of which have gone on appeal to the higher courts). In many cases, claimants have preferred to commence follow-on proceedings in the High Court instead.
Revolving doors
Those days, I feel strongly about conflicts of interests.
Not those that affect lawyers and economists. Almost inevitably, their prose is influenced by the business interests of their clients. We all know this. And subject to full disclosure, I see no evil in the fact that lawyers and economists publish papers in academic journals.
No, those that affect the EU institutions. Yesterday, M-Lex reported a blatant example of “revolving door“.
V. Kreuschitz will succeed to J. Azizi as the Austrian Judge at the General Court.
In a previous life, Kreuschitz served as a Commission legal adviser on State aid and antidumping.
It certainly makes sense to have this kind of expertise at the Court. But the cumulative effect of appointing previous Commission officials as judges, plus the very many référendaires who have spent some time in the EU administration may give rise to a pro-Commission bias at the Court. This, in turn, is not in line with the right to equality of arms in legal proceedings, as protected under Article 6 ECHR.
There would also be much to say about the conflicts of interests that plague academia. On this, I leave you with a reference to the great documentary the “Inside Job“, where Ferguson showed how the banking industry litteraly “bought” dozens of influential US scholars, to shut out any sort of academic criticism against nefarious financial practices.
Search engines and competition law
Just in case you haven’t yet registered…. 😉
Lunch Talk Series – Searh Engines and Competition Law- Friday 8 February 2013
Programme
12:00 – 12:30: Sandwich lunch and socializing
12:30 – 13:45: Presentations and comments
- Mr Cédric ARGENTON, TILEC – Tilburg University
- Mr Alfonso LAMADRID, Garrigues
- Ms Anne PERROT, MAPP
13:45 – 14:00: Q&A
Registration
Please register online at: http://63rdgclclunchtalk.eventbrite.com
Registration is open until 6 February 2013.
Standard rate: 35 EUR (VAT incl.) – free seats available for sponsors.
Inquiries
Global Competition Law Centre
College of Europe, Bruges
E-mail: info.gclc@coleurope.eu
Website: gclc.coleurope.eu
The Odds of Commission v Google
A few days ago, a funny post of mine scheduled for publication was deleted by my one-handed friend Alfonso.
With his dysfunctional arm he can’t write. But he certainly can press the erase button.
I will not ressuscitate this post on pain of causing him a heart attack.
But I have decided to write something in the same spirit. After all, we (luckily) don’t live in North Korea. I leave it to our readers to guess what my censored post was about.
So here we go. With the expiration of Commissioner Almunia’s ultimatum on 31 January 2013, journalists were star crazy yesterday.
Habemus papam “It has arrived” said today a popelike Joaquin Almunia, alluding to Google’s proposed settlement package.
Now the question is as follows. In Commission v Google:
I will try to run more polls of this kind in the future (subject to the prior authorization of my learned co-blogger).
Antitrust and the political center
A few weeks ago I published a post called “Antitrust and political imbecility“. The raw ideas in it had been in my mind for a while, but conscious that I would likely not take the time to refine them, I chose to publish them on this blog with the hope that they would benefit from public discussion. I wasn’t particularly proud of this post, but Lindsay Mcsweeney (Competition Policy International) thought it was original and asked me to develop it for a special issue of CPI’s Antitrust Chronicle to be published right after Christmas. I accepted thinking that it would only take a few hours of my holidays; little did I know that I would break my arm and go through some pains to finish it! (btw, I’m back on track as of today). In any event, and thanks to Lindays’s pressure encouragement, it’s done.
Those interested in reading my take on why antitrust law can be regarded as sensible centrist economic policy can do so here. Non-CPI suscribers can read it here (courtersy of CPI): Antitrust and the political center-
Any critical feedback would be most welcome!
New paper
I just posted a new paper on ssrn. It is entitled “New Challenges for 21st Century Competition Authorities“. It is a short and modest paper, which builds on my presentation in Hong Kong a few months ago. Hereafter, the abstract:
This paper discusses challenges for competition authorities in the 21st century. Those challenges were identified on the basis of a statistical review of the articles published since January 2011 in five major antitrust law journals. The assumption underlying this literature review is that the topics that statistically attract the most the attention from contemporary antitrust scholars are those that will likely constitute the main challenges for 21st century competition authorities.
On judicial appointments
We’re quite frustrated at the attitude of some Member States with regard to judicial appointments, which, to put it mildly, is disgraceful
First, because in spite of having been urged by the Court to confirm whether they would maintain or replace their judges, many Member States have remained totally inactive, thus effectively hampering the Court from planning its activities for the upcoming months. Second, because they fail to realize that continuity is a positive thing at an institution of this sort. Third, because they have found it impossible to agree on an increase in the number of judges and continue to lose time fighting as kids over who gets to nominate more judges. Fourth, because they fail to grasp the relevance of the Courts and of their members, and therefore take appointments lightly (hence the rejections of several unsuitable candidates proposed by Malta, Bulgaria, Sweden and Greece by the 255 Committee, which are shameful not for the individuals concerned, but for whoever nominates them).
We’ve said it before, but WE’LL SAY IT LOUDER NOW: WHY ON EARTH CANNOT MEMBER STATES FOLLOW THE EXAMPLE OF, E.G.,THE NETHERLANDS, THE UK, SLOVENIA OR CROATIA AND START SELECTING CANDIDATES PURSUANT TO OPEN MERITS-BASED FRAND COMPETITIONS?
Nailing Mittal?
Last week, the giant steel maker Arcelor Mittal announced the shutting down of several plants in Liege. 1,300 jobs are threatened.
This news has taken many by surprise. Politicians cry betrayal. Last year, Mittal had promised to invest millions of € in Liege.
In fairness, the posture of politicians is naive and cynical.
In Europe’s volatile and distressed economic context, how could politicians ever believe – and try to make believe – in the oral commitments made by Mittal (why did not they ask him to put commitments to paper?). All the more considering that since 20 years, industry analysts keep making cassandresque predictions, describing the steel industry in Liege as morribond.
At university, several colleagues asked me whether EU competition law could possibly undermine Arcelor Mittal’s proposed strategy. In the past hours, the debate has focused on whether a proposed nationalisation of the Liege plants by the Belgian State could constitute lawful/unlawful State aid. I am no State aid expert, so I’ll conveniently decline to answer.
A more powerful, yet wholly uncertain possibility would be to apply Article 102 (b) TFEU or its national equivalent under Belgian law. On its website, Arcelor Mittal says it enjoys a “leading market position and market share” in Western Europe and Eastern Europe. Under a narrow market definition, one may thus well find a dominant position. And given that the stated purpose of Arcelor Mittal’s strategy is to reduce overcapacities on Western steel markets and stabilize (or raise) prices, why not hold the shutting down of steel plants akin to unlawful abusive exploitation?
After all, if Mittal believes he can influence prices – and on this we may trust him – by closing off some plants, then this is implicit recognition that he enjoys some degree of monopoly power.
The bottom line: on cursory analysis, the law provides a legal basis to nail Mittal. But are the facts supportive?
If you need a fix
Has the Commission turned into a settlement junkie addict?
Until now, the Commission was ready to go through all sorts of legal compromissions to bring cases under the Article 9 commitments procedure:
- In Microsoft II, the Commission settled a case which 3 years before had been solved with a fine (thereby violating the principle that settlements are not apposite in cases where fines are warranted, see recital 13 of Regulation 1/2003).
- In S&P, IBM and in a gaggle of energy cases, the Commission settled cases where anticompetitive effects had lasted over a significant period of time, thereby failing to punish past anticompetitive conduct (and in turn, denying justice to the victims of the infringement).
- In the upcoming Google settlement, the Commission will close a case which raises novel legal and economic issues. Yet, how can the Commission possibly suspect an infringement short of any significant precedent?
As I was hearing exams all day, I had the occasion to read more on the commitments from Apple and four publishing groups for the sale of e-books.
I was truly baffled when I realized, in this case, that the Commission had accepted to settle what it otherwise deems a “hardcore restriction“, namely an industry-wide resale price maintenance scheme.
With this new precedent, the next question is: will the Commission ever cross the rubicon and accept to settle a cartel case? The Libor investigations could provide good candidates for such a new policy. In those cases, the Commission may be reluctant to hammer the Libor participants with fines, on pain of undoing 5 years of accomodating State aid policy with Article 101 TFEU penalties. An article 9 settlement would provide the Commission with a “good looking” exit strategy.
From a more general standpoint, the Commission’s “Settle ‘Em All” policy finds no merit in our opinion, and may well have adverse effects. After all, if firms know they can settle anything and face no penalties, why should they observe the law in the first place?
Should I Stay or Should I Go?
Comes the end of the day, most young lawyers face this question.
And many decide to stay at the office even if they have nothing to do, just to look busy before partners.
Courtesy of a keen reader of this blog possibly underoccupied in her own professional organisation ;): a nice chart on when to go home
