International Competition Update | October 2018

Written on 11 Oct 2018

Summer may be over, but the Commission's focus on tackling anti-competitive behaviour in e-commerce market set to continue: the fining of four electronics manufactures of over €111 million for fixing online resale prices is a sign that the Commission is serious about dealing with the findings of its e-commerce sector enquiry, which highlighted resale price maintenance as a 'hardcore' restriction of competition online.

National competition authorities, too, continue to be active in investigating and dealing with online sales restrictions. In September, the CAT dismissed PING’s appeal against a £1.45 million fine imposed by the CMA in 2017 for implementing an online sales ban. The decision serves as a reminder that outright online sales bans, in all but the most exceptional circumstances, are incompatible with competition law.

It is not just anti-competitive behaviour under Article 101(1) which is being tackled by regulators; in two key decisions in the UK and France, abuse of dominance by companies has been challenged. In the UK, Royal Mail was fined £50m by Ofcom (the first fine to be imposed by Ofcom) after a customer complained about a series of structural price increases for wholesale customers, while in France, the French Competition Authority imposed a €199,000 fine for unjustifiable rate increases for hospitals and clinics for waste disposal.

In Spain, decisions in several recent follow on damage claims in relation to a price-fixing and market-sharing cartel has brought about some welcome news for potential claimants, as the decisions will make it harder for defendants to use certain procedural exceptions to tactically slow down the claims.

Finally, we look at two areas of potential reform: the UK government is following several other countries in considering how to modernise, and increase, its powers to control foreign investment. Should the current proposals be enacted, they will entail substantial changes to the M&A landscape.  The UK government is also conducting a review on an issue that is also high on the agenda for the German competition authority and the European Commission: how should competition law apply to the digital economy?

Resale price maintenance under the spotlight: Commission fines manufacturers of consumer electronics over €111 million for fixing online resale prices

In September 2018, the European Commission published summaries of its decisions to impose over €111 million in fines on four consumer manufacturers for breaching competition law. In engaging in fixed or minimum resale price maintenance, the Commission found that the manufacturers had restricted the ability of their online retailers to set their own retail prices for widely used consumer electronics products, resulting, the Commission said, in higher prices for “millions of European consumers”.

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CAT dismisses Ping’s appeal against online sales ban fine

In what the CMA is calling a “landmark case”, the Competition Appeal Tribunal has dismissed Ping’s appeal against the CMA’s decision last year to fine it for restricting competition by operating an online sales ban. The CAT’s decision serves as a warning that attempts to restrict the ability of resellers to sell online can expose companies to significant risk, even where the ban is in pursuit of a legitimate, and even potentially pro-competitive, commercial aim.

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Ofcom fines Royal Mail £50m for abuse of dominant position

Ofcom (the communications services regulator) has announced that it is to fine Royal Mail £50m for abuse of its dominant position in the UK wholesale bulk-mail delivery sector following a complaint by one of its wholesale customers. The fine is the first antitrust fine imposed by Ofcom, and received widespread press coverage. Royal Mail has announced its intention to appeal the decision.

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Competition and fairness | French Competition Authority imposes fine for abuse of a dominant position in the medical waste management sector for unfair and excessive pricing

On 20 September 2018, the French Competition Authority (FCA) imposed a €199,000 fine on a company for abusing its dominant position in the Corsican medical waste management market from 2011 to 2015 by having abruptly, significantly, persistently and unjustifiably increased the rates charged to Corsican hospitals and clinics for waste disposal.

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Spain | Recent developments in competition damages claims

Recent judgements of mercantile courts in Madrid and Barcelona, related to the Spanish envelopes cartel, clarify how certain procedural issues should be dealt with and how jurisprudence should be applied to damages claims in Spain.

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Government looking to tighten national security controls on M&A in the UK

The UK government is currently consulting on reforms which would substantially increase its powers to scrutinise M&A transactions for the purposes of protecting national security. Under the reforms, the government would have the power to “call in” transactions for review where a “trigger event” gave rise to a reasonable suspicion of a national security risk.

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Have your say | How should competition law apply to the digital economy?

Three separate recent developments confirm the focus of competition authorities across Europe on the digital sector, but also highlight the wider question of whether competition law is fit for purpose in the digital revolution era.

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