UK: Focus Antitrust - 2 April 2014

Last Updated: 9 April 2014
Article by Paul Stone and Elora Mukherjee

In the News

Competition and Markets Authority starts work

The CMA, the new UK competition regulator, took up its powers on 1 April 2014. The CMA has assumed the competition functions of the OFT and the Competition Commission, which have been abolished. The CMA will have strengthened powers to pursue competition cases and will enforce a revised cartel offence, which no longer includes a dishonesty element. The CMA will also have enhanced powers when reviewing mergers and markets, although will be subject to new statutory deadlines for its investigations. Click here.

CMA publishes final report in private healthcare market investigation

The final report follows a two-year investigation by the Competition Commission. The CMA has concluded that many private hospitals face little competition in local areas across the UK and that there are high barriers to entry, leading to higher prices for self-pay patients in many local areas – and for both self-pay and insured patients in central London, where HCA owns over half of the available overnight bed capacity. The remedies package that the CMA is putting in place includes: a restriction or ban on certain benefits and incentive schemes provided by private hospital operators to clinicians; a combination of measures to improve the public availability of information on consultant fees and of information on the performance of consultants and private hospitals; the divestiture by HCA of either the London Bridge and the Princess Grace hospitals or the Wellington hospital; and measures to ensure that arrangements between NHS trusts and private hospital operators to operate or manage NHS private patient units will be capable of review by the CMA. Click here.

European Commission starts proceedings against Marine Harvest for early implementation of merger

The European Commission has sent a statement of objections to Marine Harvest for early implementation of its acquisition of competitor Morpol. In December 2012 Marine Harvest acquired a 48.5% stake in Morpol, subsequently increasing its stake to 87.1% in March 2013 and to 100% in November 2013. The transaction was notified only in August 2013 and cleared subject to conditions in September 2013 (see IP/13/896). In the Commission's preliminary view, Marine Harvest failed to notify its project to acquire Morpol to the Commission before it was implemented, in breach of the EU Merger Regulation. If the infringement is confirmed, the Commission may impose a fine of up to 10% of the company's annual worldwide turnover. Click here.

EU

Articles 101 and 102

  • The ECJ has upheld Ballast Nedam's appeal against the General Court judgment which dismissed its appeal against the Dutch bitumen cartel decision. The ECJ held that Ballast Nedam was not given the opportunity to conduct its defence properly during the Commission's investigation, as the statement of objections was unclear as to why Ballast Nedam was liable for the conduct of one of its subsidiaries. The ECJ has set aside the General Court's judgment and annulled parts of the Commission's decision. Click here.
  • The Advocate General's opinion has been published in relation to Deltafina's appeal against the General Court judgment which dismissed its appeal against the Italian raw tobacco cartel decision. The Advocate General considers that Deltafina's appeal should be dismissed on the basis that, even though the General Court failed to adjudicate within a reasonable time, this gives Deltafina the right to bring an action for damages, rather than have the judgement annulled. The Advocate General also rejects the argument that the General Court erred in finding that Deltafina's disclosure of its immunity application without informing the Commission constituted a breach of its duty to co-operate under the 2002 Leniency Notice. Click here.
  • The Advocate General's opinion has been published in relation to the appeal by Groupement des Cartes Bancaires (GCB) against the judgment of the General Court, which upheld the European Commission's 2007 decision finding that it had breached Article 101 of the TFEU by adopting certain pricing practices that hinder the issuing of bank cards in France at competitive rates by certain member banks. The Advocate General considers that the General Court adopted an approach to the concept of restriction by object that was too broad. The Advocate General therefore recommends that the case be referred back to the General Court for it to examine whether the practices of GCB had the effect, rather than the object, of restricting competition. Click here.
  • The General Court has issued its judgment in relation to Saint-Gobain's appeal against the car glass cartel decision. The General Court reduced Saint-Gobain's fine from €880 million to €715 million, on the basis that the Commission had wrongly taken into account two previous infringements as evidence of recidivism. Click here.

UK

Competition Commission

  • The CC has formally cleared the completed joint venture between Tradebe Environmental Services Limited and SITA UK Limited. This confirms the CC's provisional findings, which were published in February. The CC's analysis showed that prior to the joint venture, SRCL, as the largest supplier of healthcare risk waste services, represented the main competition to the parties, while the parties did not provide strong competition for each other. Click here.
  • The CC has, by a majority, formally cleared the anticipated acquisition by Ericsson of Creative (owner of Red Bee), the two leading providers of linear playout services to broadcasters. The CC concluded that the merger would have little adverse impact on broadcasters. This confirms the provisional findings which were published last month. Click here.

OFT

  • The OFT has issued its final decision finding that Pride Mobility and some of its retailers infringed Chapter I of the Competition Act 1998. The OFT found that over various periods relating to different retailers between 2010 and 2012, Pride entered into arrangements with eight of its UK-wide online retailers which prevented them from advertising online prices below Pride's recommended retail price for certain models of mobility scooter. Click here.

CMA

  • The CMA has published its first Annual Plan, setting out how it proposes to seek to deliver on its strategy and vision in its first year of operation. Click here.
  • The CMA has published its prioritisation principles, setting out how it will decide which cases to pursue. Click here.
  • The CMA has published its first annual report on concurrency arrangements. The report seeks to assess the current state of the UK concurrency arrangements and to provide evidence to determine what further action is required to make improvements to the regime. The concurrency arrangements are the arrangements for co-operation between the CMA and sectoral regulators regarding the competition law functions that each regulator is empowered to exercise concurrently with the CMA in its sector. Click here.
  • The CMA has published guidance on its cartel informant rewards policy. Under this policy, the CMA offers financial rewards of up to Ł100,000 to individuals for information about cartel activity. Click here.
  • The CMA has published the final version of its rules of procedure for merger, market and special reference groups. Click here.
  • The CMA has published a questions and answers document about the application of the merger control rules to rail franchises. Under section 66(3) of the Railways Act 1993, entering into a rail franchise agreement constitutes an acquisition of control of an enterprise under the merger control provisions of the Enterprise Act 2002. Click here.

Other

  • The Financial Services (Banking Reform) Act 2013 (Commencement No 4) Order 2014 (SI 2014/823) has been published, giving the Payment Services Regulator concurrent powers under the market investigation provisions set out in Part 4 of the Enterprise Act 2002 as from 1 April 2014. Click here.
  • Ofgem is consulting on its proposal to make a market investigation reference to the CMA in relation to the energy markets. This follows the joint assessment by the OFT, Ofgem and the CMA of the state of competition in the energy markets. Click here.

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