United Kingdom: Cartel Enforcement
This is an Insight article, written by a selected partner as part of GCR's co-published content. Read more on Insight
The UK Competition and Markets Authority (CMA) is the primary enforcement authority in the United Kingdom for civil cartels under article 101 of the Treaty on the Functioning of the European Union (TFEU) and the equivalent Chapter I prohibition under section 2 of the UK Competition Act 1998 (CA98), 1 as well as criminal cartels under section 188 of the UK Enterprise Act 2002 (EA). Under the criminal cartel offence, the CMA may seek the disqualification for up to 15 years of directors of companies that have infringed competition law.
In a speech published on 13 November 2018, 2 the CMA’s senior director for antitrust enforcement, Ann Pope, noted that ‘the CMA is on an upward trajectory’ and that it ‘is committed to continuing that trend’. The speech also made reference to a cartel awareness campaign launched by the CMA in October 2018, targeted at industries that the CMA identified as particularly susceptible to cartels, including construction, manufacturing, recruitment, estate agents and property management and maintenance. 3 However, Ann Pope’s speech also noted that the rate at which the CMA has initiated investigations has ‘slowed down a little this year given the scale and complexity of the cases we are still investigating – most of those cases we opened last year are still ongoing and we’re having to use some resources to prepare for Brexit’.
Civil enforcement under article 101 TFEU and section 2 CA98
In the second half of 2018 and in early 2019, the CMA issued only a single infringement decision under Chapter I of the CA98 (Chapter I), in relation to the provision of airport parking facilities. The CMA concluded its investigation in that case pursuant to a settlement agreement. 4
In February 2018, the Financial Conduct Authority (FCA) issued its first infringement decision under CA98 finding that three asset management firms had breached competition law by sharing strategic information during one initial public offering (IPO) and one placing. 5
Damages actions against payment schemes
On 14 July 2016, the Competition Appeal Tribunal (CAT) found for Sainsbury’s, a UK retailer, in an action for damages against MasterCard, in the UK’s first stand-alone damages action. 6 The claim by Sainsbury’s was issued pursuant to a European Commission decision (upheld by the General Court (GC) and the Court of Justice of the European Union (CJEU, and together with the GC, the European Court)) finding that MasterCard’s European Economic Area (EEA) multilateral interchange fees (MIFs), governing fee payments between banks relating to transactions made using payment cards, breached article 101 of the TFEU (Article 101). Sainsbury’s brought a stand-alone claim for damages from MasterCard in relation to losses suffered as a result of the MasterCard UK MIF in force from December 2006 onwards. The CAT held that the MasterCard UK MIF was a restriction on competition by effect under Chapter I and Article 101. Accordingly, Sainsbury’s was entitled to recover an amount equivalent to the extent to which the MasterCard UK MIF paid by it over the claim period exceeded the amount that it would have been charged absent the relevant MIF. Sainsbury’s was awarded £68.6 million plus interest in damages. MasterCard appealed the CAT’s judgment to the Court of Appeal.
By contrast, on 30 January 2017, in a separate but similar stand-alone action, the High Court of England and Wales (High Court) rejected an action for damages brought by several other UK high street retailers (namely, Asda, Arcadia, Next, B&Q, Comet, New Look, Iceland, Argos, WM Morrisons and Debenhams), ruling that MasterCard’s UK, Irish and EEA MIFs were not restrictive of competition under Chapter I and Article 101. 7 The High Court held that it was not bound by the CAT’s findings of law or fact. The retailers appealed the judgment to the Court of Appeal.
In separate but related proceedings, Sainsbury’s (together with a number of other UK retailers that have since settled) brought a stand-alone damages action against Visa as regards Visa’s UK MIFs under Chapter I and Article 101. On 30 November 2017, the High Court held that Visa’s UK MIFs did not restrict competition for the purposes of Chapter I and Article 101. 8 Each of Sainsbury’s and Visa appealed aspects of the judgment to the Court of Appeal.
The appeals relating to all the MIF judgments (namely, the CAT’s and the High Court’s MasterCard MIF judgments and the High Court’s Visa MIF judgment) were heard jointly by the Court of Appeal in April 2018. On 4 July 2018, the Court of Appeal determined that it was bound to follow the CJEU’s 2012 decision against MasterCard and held that the setting of the UK MIFs were a restriction of competition under Article 101(1). The Court of Appeal remitted to the CAT for reconsideration the possible application of Article 101(3) and quantum. 9
MasterCard and Visa have appealed the Court of Appeal’s judgment to the Supreme Court. The outcome of the appeal will have an impact on the multiple pending damages actions against MasterCard and Visa regarding the MIF.
Furthermore, in September 2016, a collective damages action was brought against MasterCard on behalf of consumers under the ‘opt out’ regime in section 47B CA98 in Walter Hugh Merricks CBE v MasterCard Inc and Others. 10 On 21 July 2017, the CAT held that the claims were not eligible for inclusion in collective proceedings 11 and refused permission to appeal. 12 In October 2017, the lead claimant applied to the Court of Appeal for permission to appeal and to the Administrative Court for permission to challenge the CAT’s decision by way of judicial review.
On 13 November 2018, the Court of Appeal ruled that there is a right to appeal a CAT ruling refusing an application for a collective proceedings order. Further, where the appeal raises a point of law, the Court of Appeal held that it is the correct forum with jurisdiction to hear and determine that appeal. 13 The appeal is due to be heard in April 2019.
Appeal against the CMA’s decision in Galvanised Steel Tanks
On 15 February 2019, the Court of Appeal dismissed an appeal by Balmoral Tanks Ltd and Balmoral Group Holdings Ltd against the CAT’s judgment of 6 October 2017, which had upheld the CMA’s fining decision against the parties. 14 In December 2016, the CMA had issued two decisions finding that suppliers of galvanised steel tanks had infringed Chapter I and Article 101 in relation to the supply of galvanised steel tanks for water storage. In the relevant decisions, the CMA found that Balmoral Tanks Ltd, together with three of the parties to the main cartel – Franklin Hodge, Calglass and KW Supplies – had infringed Chapter I and Article 101 by exchanging commercially sensitive information at a meeting in July 2012. 15 In October 2017, the CAT dismissed an appeal by Balmoral challenging the CMA’s decision finding an information exchange. 16 On appeal, Balmoral challenged the CMA’s finding that the 2012 meeting gave rise to a concerted practice whereby confidential information was exchanged between the parties. It also challenged the CMA’s decision to impose a fine on Balmoral and the amount of that fine. The CAT held unanimously that Balmoral was party to the infringement identified by the CMA and that there was no basis for criticising the fine imposed. In its appeal to the Court of Appeal, Balmoral argued, among others points, that the CAT had failed to recognise the inconsistency of the CMA issuing the information exchange decision against Balmoral as separate from the main cartel, and that the CAT had adopted an impermissibly strict approach to the test on ‘by object’ infringements within the context of information exchanges. The Court of Appeal dismissed Balmoral’s claims in their entirety.
CMA search warrant challenged
On 16 January 2019, the High Court rejected a challenge by Concordia, a pharmaceutical company, against parts of an ex parte search warrant issued to the CMA under section 28 CA98, in connection with an investigation into alleged anticompetitive agreements in the pharmaceutical sector. 17 Such a warrant is granted when there are reasonable grounds to suspect that documents required under the CMA’s search powers have not or will not be produced. Concordia applied to partially discharge or vary the warrant in relation to aspects of an ongoing investigation. The CMA contended that the warrant was justified because of new information as regards the ongoing investigation, but withheld the provision of that information to Concordia on the grounds of public interest immunity (PII). The High Court rejected Concordia’s argument that the CMA had no reasonable basis for seeking a warrant at an advanced stage of investigations concerning Concordia and reached the conclusion that the relevant warrants were justified on the basis of the PII evidence which Concordia had not seen.
This judgment followed judicial consideration of the preliminary issue of whether the CMA was required to disclose to Concordia all of the material that had been considered at the ex parte warrant application, including the PII material. In November 2017, The High Court held that:
- when the CMA applies for the relevant warrant, the judge must receive all the information the CMA proposes to rely upon, including PII material; and
- if the warrant is granted, then prior to the addressee making any application to vary or revoke the warrant, the CMA must identify and exclude PII material.
The hearing will then proceed on the basis of the evidence not excluded. 18
On 7 August 2018, following an appeal by the CMA against the High Court order, the Court of Appeal held that a judge considering an application to set aside or vary a warrant is entitled, and indeed is obliged, to consider all relevant material regardless of the fact that some of it may be subject to PII. Evidence that is subject to PII, and which cannot be disclosed to the investigated party, may be taken into account by using a ‘closed material procedure’ to determine the investigated party’s challenge. The Court of Appeal also ruled that the appropriate time for a court to form a definite view as to what is protected by PII is when an application is made by the subject of a warrant for the warrant to be varied or set aside. 19 On 12 December 2018, the High Court ruled that a special advocate could not be appointed in connection with such a challenge to have access of the PII material on behalf of the challenging party. 20
Appeal against CMA’s decision in Sports Equipment
On 7 September 2018, the CAT rejected an appeal brought by Ping Europe Ltd, a manufacturer of golf clubs and accessories, challenging the CMA’s infringement decision fining the company for imposing an online sales ban on retailers. 21
In August 2017, the CMA had imposed a fine of £1.45 million on Ping under Chapter I and Article 101 for preventing two UK retailers from selling Ping’s golf clubs on their website. The CMA found that, while retailers may be required to meet certain conditions before being allowed to sell online, such conditions must be compatible with competition law and that, while Ping was pursuing a genuine commercial aim of promoting in-store custom fitting, it could have achieved this through less restrictive means. 22
While the CAT considered that the CMA had erred in law in conducting a full proportionality analysis in its assessment of whether Ping’s internet policy was objectively justified, it concluded that this error made no difference to the overall conclusions reached by the CMA and was not a ground for quashing the CMA’s decision. The CAT went on to uphold the CMA’s finding that the ban on internet selling within the agreements constituted a restriction of competition ‘by object’. However, with regard to the fine imposed by the CMA, the CAT concluded that the CMA had erred on the facts of the case in treating director involvement as an ‘aggravating factor’ and accordingly reduced the level of the fine from £1.45 million to £1.25 million. On 15 November 2018, the CAT refused Ping’s permission to appeal against its judgment. 23
Territorial jurisdiction in damages actions
On 24 July 2018, the Supreme Court refused Samsung, Philips, and LG permission to appeal against a Court of Appeal judgment that ruled on jurisdiction issues in two separate damages actions arising from the LCD and CRT cartel infringement decisions by the European Commission. 24
Further to the European Commission’s infringement decisions in relation to the LCD cartel and the CRT cartel, of 8 December 2010 and 5 December 2012 respectively, the claimants brought two separate damages actions against the addressees of the decisions. In response to both actions, the defendants applied to have the actions struck out or for summary judgment on the basis that the English courts had no jurisdiction to hear the actions. 25 The defendants’ argument was based on the fact that the products had first been supplied to entities outside the EEA, then to a claimant holding company also outside the EEA, which in turn supplied the products to the claimant subsidiary companies within the EEA for onward sale and distribution within the EEA.
On 16 February 2018, the Court of Appeal rejected the defendants’ application, ruling that the issue of territorial jurisdiction cannot be determined adversely to the claimants on a summary basis and that the analysis of the territorial application of Article 101 would depend on a full examination of the intended and actual operation of the cartels. Accordingly, the Court of Appeal concluded that the claimants’ actions should proceed to trial. 26 The Supreme Court refused the defendants permission to appeal on the basis that the defendants’ applications did not raise a point of law of general public importance which ought to be considered at this time, bearing in mind that the case had already been the subject of judicial decision and review on appeal.
Damages actions against truck manufacturers
In June and July 2018, the CAT published a number of High Court orders transferring to the CAT a number of damages actions brought against five truck manufacturers (MAN, Volvo/Renault, Daimler, Iveco and DAF) arising out of the European Commission’s decision on 19 July 2016 that the truck manufacturers had participated in a cartel in breach of Article 101. The damages actions were brought by Royal Mail, 27 Ryder Limited and Hill Hire Limited, 28 Dawsongroup plc, 29 Wolseley UK Limited, 30 Veolia Environnement SA, 31 Suez 32 and BT Group plc. 33
Separately, in May 34 and July 2018, 35 the CAT also registered two applications to commence collective proceedings under section 47B of the CA98 on the basis of the European Commission’s truck cartel decision. Where there are competing applicants seeking approval to act as the class representative in respect of the same claim, the CAT, in determining whether to authorise an applicant to act as a class representative, will consider, inter alia, which applicant is the most suitable to do so. 36 The two applications will be heard together in June 2019.
Appeal against the CMA’s decision in Paroxetine
On 8 March 2018, the CAT handed down its judgment in the appeals brought by five pharmaceutical companies challenging the CMA’s infringement decisions fining the companies for agreeing to delay generic entry into the market for the drug paroxetine. 37
In February 2016, the CMA imposed fines totalling £44.99 million on GlaxoSmithKline, Alphapharm Ltd and Generics (UK) Ltd under Chapter I and Article 101 as regards a series of pay-for-delay agreements that were aimed at delaying generic entry for the drug paroxetine. 38 In a number of recent decisions, the European Commission has found that certain pay-for-delay arrangements in patent disputes breach Article 101 where the originator pharmaceutical firm makes a ‘value transfer’ (essentially, a payment) to generic firms to delay the market entry of generic medicines. The CMA found that, between 2001 and 2004, GlaxoSmithKline (the supplier of branded paroxetine) had agreed to make payments and other value transfers totalling over £50 million to Alphapharm Ltd and Generics (UK) Ltd (suppliers of generic versions of paroxetine), which were aimed at delaying the potential entry of the generic firms on the UK market for paroxetine.
GlaxoSmithKline, Generics (UK) Ltd, Xellia and Alpharma, Actavis UK and Merck filed appeals against the CMA’s infringement decision. The appellants claimed that the CMA erred in finding that the agreement with the generic firms had as its object or effect the restriction of competition and that the CMA erred in finding that the agreements did not benefit from exemption under the Competition Act 1998 (Land and Vertical Agreements Exclusion) Order 2000 (Exclusion Order), which at the time excluded certain vertical agreements from the scope of competition law. Generics (UK), Actavis and Merck argued in addition that the CMA had infringed their rights of defence due to the passage of time between the agreement and the CMA’s investigation. Xellia and Alpharma argued that the CMA erred in holding them jointly and severally liable with Actavis. In its appeal, GlaxoSmithKline claimed that the CMA erred in:
- finding that the agreements did not benefit from an exemption under the Vertical Block Exemption Regulation or from an individual exemption;
- defining the relevant market;
- finding that GlaxoSmithKline held a dominant position under Chapter II of the CA98 (Chapter II) and article 102 of the TFEU (Article 102); and
- finding that GlaxoSmithKline had abused its dominant position.
As there were significant overlaps between the five appeals, the CAT heard them together. In its judgment, the CAT referred a number of the questions under appeal to the CJEU for a preliminary ruling, while ruling on some of the other points of appeal in favour of the CMA.
With regard to Chapter I and Article 101, the CAT referred for a preliminary ruling to the CJEU questions relating to whether the generic companies were potential competitors of GlaxoSmithKline and whether the agreements restricted competition ‘by object’ or ‘by effect’. The CAT also made a reference to the CJEU with regard to the CMA’s decision under Chapter II and Article 102 in respect of GlaxoSmithKline.
In addition to the questions referred to the CJEU, the CAT dismissed arguments raised by the appellants that the CMA had erred in finding that the agreements did not benefit from exemption under the exclusion order and that the CMA had erred in finding that the agreements did not benefit from either a block exemption or an individual exemption, as raised by GlaxoSmithKline. The CAT also dismissed the arguments relating to the infringement of the rights of defence, as well as Xellia and Alpharma’s argument that the CMA erred in holding them jointly and severally liable with Actavis. The matters dismissed by the CAT were not referred to the CJEU for a preliminary ruling.
Roofing materials investigation
On 27 March 2019, the CMA issued a statement of objections alleging that three suppliers of rolled lead (Associated Lead Mills Limited, Jamestown Metals Limited, HJ Enthoven Limited and Calder Industrial Materials Limited) had infringed Chapter I and Article 101, by taking part in an anticompetitive agreement to share the market in relation to the supply of rolled lead in the United Kingdom. 39 The CMA alleges that the parties to the alleged cartel colluded on prices, exchanged commercially sensitive information, refrained from targeting some of each other’s customers and collectively refused to supply another company whose business threatened to disrupt their market sharing arrangement.
Fine in the musical instruments and equipment investigation
On 20 March 2019, the CMA imposed issued a fine of £25,000 on Fender Musical Instruments Europe Limited (Fender) for failure to provide material during a dawn raid. 40 The CMA launched an investigation in April 2018 into, among others, Fender for suspected breaches of Chapter I and Article 101 in the musical instruments and music making equipment sector. 41 The CMA simultaneously conducted a dawn raid of Fender’s premises pursuant to the CMA’s powers under section 27 of the CA98. In the course of the dawn raid, a senior officer of Fender failed to disclose certain notebooks, alleging that the notebooks had been destroyed and did not contain relevant information. Three weeks after the inspection, Fender provided 10 additional notebooks to the CMA, explaining that they had not been provided during the inspection as the senior officer thought the notebooks did not contain relevant material. However, following a review of the notebooks by the CMA, the CMA identified entries relevant to its investigation. The CMA was also subsequently informed that the notebooks had been removed by the senior officer during the inspection and had been stored off-site.
The CMA found that the breach of the obligation to produce documents was intentional and that Fender was liable for the actions of its senior officer. However, the CMA did not impose the maximum penalty of £30,000 as Fender had taken prompt action to rectify the breach.
Design, construction and fit-out services
On 1 March 2019, the CMA issued a statement of objections to five businesses, which, as part of a settlement process, had accepted liability for at least one infringement in the design, construction and fit-out services sector. According to the CMA, the infringement took the form of cover bidding in relation to contracts for the supply of services involving the fit-out, design and refurbishment of commercial and non-residential premises during the period of 2006 to 2017. Cover bidding involves companies agreeing between them to place bids that are intended to lose the contract, thereby reducing the intensity of competition during the bidding process. The companies agreed to pay fines totalling over £7 million. The statement of objections was also addressed to a sixth company, JLL, an immunity applicant that brought information about the conduct to the CMA’s attention. 42 In issuing the statement of objections, the CMA noted that it ‘is seeing a lot of evidence of anticompetitive conduct in the construction industry’. 43
Pay-for-delay in the pharmaceutical sector
On 28 February 2019, the CMA issued a statement of objections to two pharmaceutical companies, Auden Mckenzie and Waymade, alleging that they had entered into a pay-for-delay arrangement further to which Auden Mckenzie had incentivised Waymade not to enter the market for hydrocortisone with its own competing version of the drug in breach of Chapter I and Article 101. 44
The CMA is also proceeding with a number of investigations in the pharmaceutical sector, some of which were opened in October 2017. These investigations, inter alia, relate to alleged anticompetitive agreements in breach of Chapter I and Article 101, as well as alleged excessive pricing by dominant firms in breach of Chapter II and Article 102. In November 2018, the CMA announced that it had decided to close certain aspects of an investigation into suspected anticompetitive agreements in the pharmaceutical sector on the grounds of administrative priority. 45
Precast drainage products (civil investigation aspect)
On 13 December 2018, the CMA issued a statement of objections alleging that three suppliers of precast concrete drainage products had breached competition law by taking part in a cartel to fix or coordinate prices and to share the market in relation to the provision of certain precast concrete drainage products in Great Britain. As part of the CMA’s settlement process, two of the suppliers under investigation, CPM Group Limited and Stanton Bonna Concrete Limited, admitted to participating in the alleged cartel and agreed to pay fines. A third company under investigation, FP McCann Limited, made no admissions and is not a party to the settlement. 46 The CMA’s civil investigation follows the conclusion of the CMA’s criminal investigation in this case in 2017, which resulted in one conviction following a guilty plea.
Price comparison website: use of most favoured nation clauses
On 2 November 2018, the CMA announced that it had issued a statement of objections to BGL (Holdings) Limited, BGL Group Limited, BISL Limited (BISL) and Compare The Market Limited (together, CompareTheMarket), which operate a price comparison website, alleging an infringement of Chapter I and Article 101. 47 According to the CMA, the use by CompareTheMarket of most favoured nation clauses in contracts with home insurance providers has prevented rival comparison sites and other channels from trying to win home insurance customers by offering cheaper prices than CompareTheMarket. The CMA alleges that, as a result, consumers of home insurance could be missing out on cheaper premiums.
Parking facilities at airports
On 25 October 2018, the CMA issued an infrigement decision against Heathrow Airport and Arora Holdings Limited (Arora) for breach of Chapter I. 48 The parties had entered into an agreement in relation to the lease of Arora’s airport hotel, which included a clause that restricted how parking prices should be set by Arora for non-hotel guests. On 18 September 2018, following the CMA’s provisional findings that the parties had infringed competition law, the CMA announced that it had agreed a settlement with the parties, further to which Heathrow would pay a fine of £1.6 million. 49 No fine was imposed on Arora as it had been granted immunity under the CMA’s leniency process. The CMA noted that this was the first time it had taken competition enforcement action in a case involving a land agreement.
Other civil enforcement action
In 2018, the CMA also launched investigations into suspected anticompetitive arrangements in the financial services sector, 50 in the supply of musical instruments and equipment 51 and in relation to the Atlantic Joint Business Agreement between American Airlines, members of International Airlines Group, and Finnair. 52 In early 2019, the CMA initiated an investigation into the supply of construction services. 53 These investigations are in addition to the CMA’s ongoing cases into the provision of residential estate agency services, 54 the provision of products and services to the construction industry 55 and the pharmaceuticals sector. 57
Criminal enforcement under EA section 188
Following a change in the law, for conduct after 1 April 2014, it is no longer necessary for the CMA to prove that individuals acted ‘dishonestly’ to commit the cartel offence in order to secure a disqualification order – effectively creating a strict liability offence. As a result of this, in December 2016, the CMA secured its first disqualification of a director of a company found to have infringed competition law. 58 The CMA demonstrated its determination to continue pursuing the disqualification of directors by securing the disqualification of two directors involved in an estate agency cartel on 10 April 2018. 59 In addition, on 26 February 2019, the CMA issued proceedings in the High Court seeking the disqualification of a further two directors in relation to the same cartel. 60
Future criminal enforcement
The first disqualification order secured by the CMA in 2016 was an important milestone in its criminal cartel enforcement record. As noted above, the CMA has continued to pursue the disqualification of directors in late 2018 and early 2019. As a sign of the CMA’s increased drive to pursue director disqualifications, it published its revised guidance on director disqualification orders on 6 February 2019. The revised guidance includes a list of non-exhaustive factors that the CMA will consider in deciding whether or not to apply for a disqualification order. 61 These factors include:
- the nature and seriousness of the competition law infringement;
- the conduct of the director during the CMA investigation;
- the nature of the director’s responsibility for or involvement in the breach, by act or omission; and
- the deterrent effect of a disqualification order in the relevant market.
In a speech of 13 November 2018, 62 Ann Pope, the CMA’s senior director for antitrust enforcement, noted that the CMA’s intention is ‘to continue to use our powers in this regards and to actively consider director disqualification orders in appropriate cases going forwards’.
On 23 June 23 2016, the UK voted to leave the 28-nation European Union. On 29 March 2017, the UK government gave the European Council formal notification under article 50 of the Treaty on European Union (TEU) of its intention to withdraw from the EU and from the European Atomic Energy Community (Euratom). This notice was originally due to expire on 29 March 2019 and on that date the UK was going to leave the EU. However, the EU and the UK agreed to extend the two-year article 50 period on 22 March 2019 and again on 10 April 2019. At the time of writing, the day on which the United Kingdom is expected to leave the European Union is 31 October 2019, with the option of an earlier exit date if the UK ratifies the withdrawal agreement agreed between the UK government and the European Commission on 14 November 2018 (the Withdrawal Agreement).
The implications of Brexit from an antitrust perspective will depend on the basis of the UK’s ongoing relationship with the EU, which is not clear at the time of writing. Under the Withdrawal Agreement, EU law would continue to apply to and in the UK during the transition period as if the UK continued to be a member state, and the UK courts would continue to interpret UK competition law in accordance with EU competition law until at least the end of the transition period. The competition law landscape that would apply after the transition period would be governed by the rules negotiated and agreed by the United Kingdom and European Union during the transition period.
At the time of writing, the UK parliament has rejected the Withdrawal Agreement on three occasions. Accordingly, a scenario where the UK leaves the EU without any transitional arrangements in place (No Deal Brexit) remains a possibility. On 30 October 2018, the CMA published a notice on antitrust enforcement in the event of a No Deal Brexit 63 and on 18 March 2019 the CMA published a guidance on its functions after a No Deal Brexit. 64
In a speech of 13 November 2018, 65 Ann Pope noted that in October 2018 the CMA opened its first Brexit case, by launching an investigation of the Atlantic Joint Business Agreement between four airlines under Chapter I and Article 101, despite the agreement having already been investigated by the European Commission, further to which the European Commission had accepted commitments from the parties. 66 In opening its investigation, the CMA noted that the expiry of the commitments is due in 2020, and that since five out of the six routes subject to the commitments are from the UK, and ‘to prepare for the time when the European Commission may no longer have responsibility for competition in the UK’, the CMA decided to review afresh the competitive impact of the agreement.
In practice, a No Deal Brexit (and potentially Brexit further to a withdrawal agreement) is expected to significantly increase the CMA’s workload of antitrust and merger cases having an effect in the UK and which would have previously been within the jurisdiction of the European Commission. The CMA would also become responsible for state aid in the UK. As a result of this, the CMA has warned that ‘[d]iscretion to carry out other work, such as market studies and further enforcement, would narrow considerably, and [the CMA] will need to take tough decisions on priorities, at pace, to be flexible to new circumstances’. 67
This update covers the period from March 2018 to March 2019.
1 Article 3(1) of Council Regulation 1/2003 provides that the CMA has to apply article 101 TFEU where the CMA applies section 2 of the Competition Act 1998 (national equivalent to article 101 TFEU) to conduct which may affect trade between EU member states.
3 See CMA press release of 20 March 2017, ‘CMA launches campaign to crack down on cartels’, available at www.gov.uk/government/news/cma-launches-campaign-to-crack-down-on-cartels.
6 Sainsbury’s Supermarkets Ltd v MasterCard Inc and Others  CAT 11, judgment of 14 July 2016 available at http://catribunal.org/files/1241_Sainsburys_Judgment_CAT_11_140716.pdf.
8 Sainbury’s Supermarkets Limited v Visa Europe Services LLC and others  EWHC 3047, judgment of 30 November 2017, available at http://www.bailii.org/ew/cases/EWHC/Comm/2017/3047.html.
9 Sainsbury’s Supermarkets Limited v MasterCard Incorporated & Ors  EWCA 1536 (Civ), judgement of 4 July 2018 available at https://www.bailii.org/ew/cases/EWCA/Civ/2018/1536.html.
10 Section 47B allows representative litigants to apply to the CAT to bring proceedings for damages on an ‘opt out’ basis on behalf of a class of claimants.
11 Walter Hugh Merricks CBE v MasterCard Inc and Others  CAT 16, judgment of 21 July 2017, available at http://www.catribunal.org.uk/files/2.1266_Walter_Hugh_Judgment_CAT_16_210717.pdf.
12 Walter Hugh Merricks CBE v MasterCard Incorporated and Others  CAT 21, judgment of 28 September 2017.
13 Walter Hugh Merricks CBE v MasterCard Incorporated & Ors  EWCA 2527 (Civ) judgement of 13 November 2018 available at https://www.bailii.org/ew/cases/EWCA/Civ/2018/2527.html.
14 (1) Balmoral Tanks Limited and (2) Balmoral Group Holdings Limited v. Competition and Markets Authority  EWCA Civ 162, judgment of 15 February 2019 available at https://www.bailii.org/ew/cases/EWCA/Civ/2019/162.html.
15 CE/9691/12 – Galvanised steel tanks for water storage information exchange infringement, CMA decision of 19 December 2016, available at https://assets.publishing.service.gov.uk/media/58db746440f0b606e300003c/ce-9691-12-information-exchange-decision.pdf.
16 (1) Balmoral Tanks Limited and (2) Balmoral Group Holdings Limited v Competition and Markets Authority  CAT 23, judgment of 6 October 2017, available at http://www.catribunal.org.uk/files/1277_Balmoral_Judgment_061017.pdf.
17 Competition and Markets Authority v Concordia International RX (UK) Ltd  EWHC 47 (Ch), judgment of 16 January 2019 available at https://www.bailii.org/ew/cases/EWHC/Ch/2019/47.html.
18 Competition and Markets Authority v Concordia International RX (UK) Ltd  EWHC 2911, judgment of 16 November 2017 available at http://www.bailii.org/ew/cases/EWHC/Ch/2017/2911.html.
19 Competition And Markets Authority v Concordia International RX (UK)  EWCA Civ 1881, judgment of 07 August 2018 available at https://www.bailii.org/ew/cases/EWCA/Civ/2018/1881.html.
20 Competition And Markets Authority (CMA) v Concordia International Rx (UK) Ltd  EWHC 3448, judgment of 12 December 2018 available at https://www.bailii.org/ew/cases/EWHC/Ch/2018/3448.html.
21 Ping Europe Limited v Competition and Markets Authority  CAT 13, judgment of 7 September 2018 available at https://www.catribunal.org.uk/sites/default/files/2018-10/1279_Ping_Judgment_CAT_13_070918.pdf.
22 50230 – Online sales ban in the golf equipment sector, CMA decision of 24 August 2017, available at https://assets.publishing.service.gov.uk/media/5a3b7d11e5274a73593a0ce5/sports-equipment-non-confidential-infringement-decision.pdf.
23 Ping Europe Limited v Competition and Markets Authority  CAT 16, judgment of 15 November 2018 available at https://www.catribunal.org.uk/sites/default/files/2018-11/1279_Ping_Judgment_CAT_16_151118.pdf.
24 Supreme Court Permission to Appeal results – End of June and July 2018, available at https://www.supremecourt.uk/docs/permission-to-appeal-2018-0607.pdf.
25 Iiyama Benelux BV & Ors v Schott AG & Ors  EWHC 1207 (Ch), judgment of 23 May 2016 available at https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWHC/Ch/2016/1207.html, and Iiyama (UK) Ltd & Ors v Samsung Electronics Co Ltd & Ors  EWHC 1980 (Ch), judgment 29 July 2016 available at https://www.bailii.org/ew/cases/EWHC/Ch/2016/1980.html.
26 Iiyama (UK) Ltd v Samsung Electronics Co Ltd  EWCA Civ 220, judgment of 16 February 2018 available at https://www.bailii.org/ew/cases/EWCA/Civ/2018/220.html.
27 Royal Mail Group Limited v DAF Trucks Limited and Others Case 1284/5/7/18, registered on 21 June 2018. Case information available at https://www.catribunal.org.uk/cases/12845718-t-royal-mail-group-limited.
28 Ryder Limited and Another v MAN SE and Others Case 1291/5/7/18 registered on 26 July 2018. Case information available at https://www.catribunal.org.uk/cases/12915718-t-ryder-limited-and-another.
29 Dawsongroup plc and Others v DAF Trucks NV and Others Case 1295/5/7/18, registered on 31 July 2018. Case information available at https://www.catribunal.org.uk/cases/12955718-t-dawsongroup-plc-and-others.
30 Wolseley UK Limited and Others v Fiat Chrysler Automobiles NV and Others Case 1294/5/7/18, registered on 26 July 2018. Case information available at https://www.catribunal.org.uk/cases/12945718-t-wolseley-uk-limited-and-others.
31 Veolia Environnement S.A. and Others v Fiat Chrysler Automobiles NV and Others Case 1293/5/7/18, registered on 26 July 2018. Case information available at https://www.catribunal.org.uk/cases/12935718-t-veolia-environnement-sa-and-others.
32 Suez Groupe SAS and Others v Fiat Chrysler Automobiles NV and Others Case 1292/5/7/18, registered on 26 July 2018. Case information available at https://www.catribunal.org.uk/cases/12925718-t-suez-groupe-sas-and-others.
33 BT Group PLC and Others v DAF Trucks Limited and Others Case 1290/5/7/18, registered on 23 July 2018. Case information available at https://www.catribunal.org.uk/cases/12905718-t-bt-group-plc-and-others.
34 UK Trucks Claim Limited v Fiat Chrysler Automobiles N.V. and Others Case 1282/7/7/18, registered on 18 May 2018. Case information available at https://www.catribunal.org.uk/cases/12827718-uk-trucks-claim-limited.
35 Road Haulage Association Limited v Man SE and Others Case 1289/7/7/18, registered on 17 July 2018. Case information available at https://www.catribunal.org.uk/cases/12897718-road-haulage-association-limited.
36 The Competition Appeal Tribunal Rules 2015, Rule 78(2)(c).
37 Generics (UK) Limited and Others v Competition and Markets Authority  CAT 4, judgment of 8 March 2018, available at http://www.catribunal.org.uk/files/1.1251-1255_Paroxetine_Judgment_CAT_4_080318.pdf.
38 CE/9531/11 – Paroxetine, CMA decision of 12 February 2016 available at https://assets.publishing.service.gov.uk/media/57aaf65be5274a0f6c000054/ce9531-11-paroxetine-decision.pdf.
40 Case 50565-3 - Penalty notice under section 40A of the Competition Act 1998, CMA decision of 20 March 2019, available at https://assets.publishing.service.gov.uk/media/5c9a1b27e5274a3cab0beb97/Fender_Europe_Penalty_Notice__26_March_2019__FINAL__Redacted.pdf.
41 Case 50565-3 - Musical instruments and equipment: suspected anti-competitive agreements, investigation opened on 17 April 2018. Case information available at https://www.gov.uk/cma-cases/musical-instruments-and-equipment-suspected-anti-competitive-agreements-50565-3.
42 50481 - Design, construction and fit-out services, investigation opened on 19 July 2017. Case information available at https://www.gov.uk/cma-cases/design-construction-and-fit-out-services.
44 hydrocortisone tablets: suspected excessive and unfair pricing, investigation opened on 8 March 2016. Case information available at https://www.gov.uk/cma-cases/pharmaceutical-sector-anti-competitive-practices.
45 50511 – Decision to close certain aspects of an investigation into suspected breaches of competition law in the pharmaceutical sector on the grounds of administrative priority, CMA decision of 7 November 2018, available at https://assets.publishing.service.gov.uk/media/5bec469740f0b667ce6707b5/case_closure_statement.pdf.
46 Supply of precast concrete drainage products: civil investigation, investigations opened on 15 April 2016. Case information available at https://www.gov.uk/cma-cases/supply-of-precast-concrete-drainage-products-civil-investigation.
47 Price comparison website: use of most favoured nation clauses, investigation opened on 26 September 2017. Case information available at https://www.gov.uk/cma-cases/price-comparison-website-use-of-most-favoured-nation-clauses.
48 Case 50523 – Conduct in the transport sector (facilities at airports), CMA decision of 25 October 2018, available at https://assets.publishing.service.gov.uk/media/5bf7c977e5274a3b2d4c837c/medway_full_text_decision.pdf.
50 Financial services sector: suspected anticompetitive arrangements, investigation opened on 13 November 2018. Case information available at https://www.gov.uk/cma-cases/financial-services-sector-suspected-anti-competitive-practices.
51 Case references 50565-2; 50565-3; 50565-4; 50565-5; and 50565-6 Musical Instruments and equipment: suspected anticompetitive agreements each opened on 17 April 2018. Case information available at https://www.gov.uk/cma-cases/musical-instruments-and-equipment-suspected-anti-competitive-agreements-50565-2; https://www.gov.uk/cma-cases/musical-instruments-and-equipment-
suspected-anti-competitive-agreements-50565-3; https://www.gov.uk/cma-cases/musical-instruments-and-equipment-suspected-anti-competitive-agreements-50565-4; https://www.gov.uk/cma-cases/musical-instruments-and-equipment-suspected-anti-competitive-agreements-50565-5; https://www.gov.uk/cma-cases/musical-instruments-and-equipment-suspected-anti-competitive-agreements-50565-6.
52 Investigation of the Atlantic Joint Business Agreement, investigation opened on 11 October 2018. Case information available at https://www.gov.uk/cma-cases/investigation-of-the-atlantic-joint-business-agreement.
53 Supply of construction services, investigation opened on 19 March 2019. Case information available at https://www.gov.uk/cma-cases/supply-of-construction-services.
54 Provision of residential estate agency services, investigation opened on 27 February 2018. Case information available at https://www.gov.uk/cma-cases/provision-of-residential-estate-agency-services.
55 Provision of products and/or services to the construction industry: civil investigation, investigation opened on 28 February 2017. Case information available at www.gov.uk/cma-cases/provision-of-products-and-or-services-to-the-construction-industry-civil-investigation.
56 Pharmaceuticals: suspected anticompetitive agreements case numbers 50511-1 and 50511-2, investigations opened on 10 October 2017. Case information available at https://www.gov.uk/cma-cases/pharmaceuticals-suspected-anti-competitive-agreements and https://www.gov.uk/cma-cases/pharmaceutical-drugs-suspected-anti-competitive-agreements.
57 Pharmaceutical drugs: suspected anticompetitive agreements and conduct, investigation opened on 10 October 2017. Case information available at https://www.gov.uk/cma-cases/pharmaceutical-drugs-suspected-anti-competitive-agreements-and-conduct.
59 See https://www.gov.uk/government/news/estate-agent-cartel-directors-disqualified. The disqualification undertakings are available at https://assets.publishing.service.gov.uk/media/5acc7c57e5274a7f23b8222a/Disqualification_Undertaking_Mr_Baker.pdf and https://assets.publishing.service.gov.uk/media/5acc7fa5e5274a7f20e713e0/Disqualification_Undertaking_Mr_Frost.pdf.
66 Investigation of the Atlantic Joint Business Agreement, investigation opened on 11 October 2018. Case information available at https://www.gov.uk/cma-cases/investigation-of-the-atlantic-joint-business-agreement.
67 See Competition and Markets Authority Annual Plan consultation 2019/20, available at https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/761071/annual_plan_consultation.pdf.