European Commission confirms final texts for new EU rules for vertical agreements

On 10 May, the European Commission (the ‘Commission’) published final texts of the new Vertical Agreements Block Exemption Regulation (‘VBER’) and the accompanying Guidelines on Vertical Restraints (‘Guidelines’).  These two documents set out the full legal framework for the assessment of vertical agreements under EU competition law that will apply from 1 June. 

Although the process leading up to this moment started back in 2018, this means that businesses and their advisers have been given only three weeks to digest the final texts before they come into force.  While the main changes that will come into force on 1 June are largely as previewed in the draft texts that were published for consultation back in July last year, there are some surprises.

To discover and be surprised, download a copy of our briefing.

Becket McGrath quoted in GCR “Epic Games files new claims against Apple and Google in UK”

The UK’s Competition Appeal Tribunal yesterday published Epic’s separate claims against Apple and Google, which accuse the companies of abusing their dominance in the markets for distributing apps and processing in-app payments in their respective app stores.

Becket McGrath, a partner at Euclid Law in London, said substantive differences in UK, US and Australian law mean it is “perfectly conceivable” that Epic could have a successful abuse of dominance claim in the UK and an unsuccessful monopolisation claim in the US, or indeed vice versa.

Most of the ongoing discussions around digital markets and competition law concern the balance between regulation – such as the European Commission’s Digital Markets Act or the introduction of the UK’s digital markets unit – and public competition enforcement by authorities, he said.

“While that is very important, this is a good reminder that there is the private litigation aspect of it too”, which on this occasion involves an aggrieved and well-resourced claimant and a system that welcomes these types of claims, McGrath said

To read the full GCR article: https://globalcompetitionreview.com/digital-markets/epic-games-files-new-claims-against-apple-and-google-in-uk

Becket McGrath quoted in GCR article: “CMA proposes regulatory reform to combat big tech”

The UK’s Competition and Markets Authority has called for a new regime to regulate the online economy, after its digital advertising study found the market power of Google and Facebook is causing substantial harm to “society as a whole”.

The enforcer today asked the UK government to create a digital markets unit and empower it to break up big tech companies and enforce a code of conduct among online platforms to resolve competition concerns in that sector. It did not specify if the new unit should function within an existing body or be created as a new standalone regulator.

The EU enforcer launched a public consultation on its proposed market investigations tool in May. EU competition commissioner Margrethe Vestager has cited the CMA’s similar power as an efficient way of tackling competition concerns in fast-moving markets.

Euclid Law partner Becket McGrath, who advised a publisher during the UK enforcer’s market study, said it is understandable why the CMA asked the government to introduce a new regulatory regime. Conduct that is not good for competition does not necessarily infringe antitrust law, but it could be addressed through careful, targeted regulation, he said.

Combating concerns related to the market power of big tech requires difficult public policy trade-offs that extend well beyond competition law, McGrath added. 

“With all these moving pieces, there has to come a point when the CMA, as an independent and unelected agency, hands over to the government,” he said.

McGrath also questioned if the UK could effectively implement some of the CMA’s proposals without aligning with reforms emerging elsewhere, particularly in the EU. “Solutions need to be closely coordinated – it’s not good for businesses if there is too much divergence,” he warned.

To read the full article on GCR website, click here.

KNOW YOUR ABCS, KNOW YOUR DATA

Inventus and Euclid Law have teamed up to write a series of articles highlighting what companies and their legal and compliance teams need to know about the use of technology in competition law as well as guiding on how to tackle each step and overcome the challenges that come with it. Download the first article written by Inventus’ Jérôme Torres Lozano, Director of Professional Services, and Euclid’s Marie Leppard, Partner, as they go over the ABC’s of knowing your data. 

In this article, you’ll learn:

– How to identify data and understand the sources

– Correctly collect data and preserve it

– Use of technology to assist during crucial data identification, collection, and preservation steps

To read the full article, click here.

Digital markets and merger control: some reflections on the CMA’s Lear Report

Sarah Long

Ex-post evaluation of competition authorities’ decisions is a very valuable exercise, and something that the OECD Competition Committee has been championing for many years. The Lear Report is good example of why ex-post evaluation should be carried out, and exemplifies the challenges faced by competition authorities when assessing mergers in digital markets.In particular there are some interesting lessons from the assessment of the Facebook/Instagram merger, which is often cited as the reason why a more draconian approach should be taken to intervene in digital markets. While it is clear Facebook no longer faces the competitive constraint that might have been exerted by Instagram, the Lear Report acknowledges that the merger has generated significant efficiencies to the benefit of users and advertisers. Instagram quickly developed into an entirely different product after the merger, through offering direct messaging and social media tools. Facebook drove that development. A conclusion that Instagram would have been directly competing with Facebook absent the merger is therefore potentially misleading – Instagram may not have had developed in the same way, or as quickly.The Lear Report will do little to quell current public opinion of Facebook. However, the findings do demonstrate the need to be mindful when looking at things with hindsight. It is clear that the current competition framework is not entirely fit for purpose in a digital age. But we must be careful not to undermine the rigorous legal assessment that underpins our merger control regime and its voluntary nature. For example, I would have some reservations around the Lear Report’s recommendations for competition authorities to simply accept more uncertainty in the counterfactual analysis. I also have concerns around the proposal for dawn raids in the context of merger investigations.The Lear Report also identifies that one of the main issues for competition authorities is a lack of understanding of digital markets, particularly for online advertising. One solution may be the inclusion of stakeholder meetings with independent industry experts early on in the process, or commissioning an independent expert report on a particular feature of a market, in order to bridge the knowledge gap.

*The CMA commissioned Lear Report on Ex-post Assessment of Merger Control Decisions in Digital Markets was published on 9 May 2019.

Sarah Long to speak on digital markets panel at the Competition Section Annual Conference 2019

Sarah Long will join the panel on competition and digital markets at the Competition Section Annual Conference held at the Law Society on 9 May 2019, where she will be discussing antitrust enforcement and the use of interim measures in digital markets. Sarah advised the complainant BidOnThis in the Auction Services case, which is to date the CMA’s only abuse of dominance case in digital markets, and the only case in which the CMA has considered interim measures. A link to an article on the case, co-written with Simon Chisholm from CRA and Helen Parker from BidonThis, and published in the International In-house Counsel Journal is available here.