Tag: UK market investigations

Reforming Competition and Consumer Policy

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Response to the Public Consultation by the Department for Business, Energy and Industrial Strategy

Proposals on Markets and Merger Control Jurisdiction

Euclid Law Ltd

We are submitting this paper from the position of practitioners who strongly believe that consumers, businesses and practitioners benefit from rational, predictable and up to date competition and consumer law regimes. The views stated are our own and do not necessarily represent the views of any client of our firm.

While the Government’s reform proposals are extremely wide-ranging, we have focused this response on the two areas where the proposed changes cause us most concern, namely the markets and merger control regimes.

[…] The Government’s consultation looks at strengthening the somewhat unique feature of market investigations. This allows the CMA to impose remedies in markets where there is no evidence of wrongdoing. It is essentially the exercise of a Ministerial power delegated to the CMA, enabling the CMA to regulate parts of the economy without any Ministerial or Parliamentary involvement. Few other competition authorities enjoy such wide-ranging powers. The flipside of that coin is that the process involves a lengthy and rigorous review by independent Panel Members, only at the end of which remedies can be imposed – so-called “Market Investigation References”. The Panel Members are part-time and are independent of the CMA and its Board. It is that independence that is seen as an integral part of the system.

While the CMA has the ability to conduct Market Studies without a full market investigation (and thus without the involvement of independent Panel Members), it lacks the power to impose a binding remedy in such cases. If the CMA wishes to impose remedies, the only option is for the Board of the CMA to refer the matter to an independent Panel for a market investigation. Of course, the CMA already has other options available to it short of imposing remedies, such as seeking voluntary undertakings from market participants in lieu of a reference or making recommendations for others to take action (including other regulatory bodies or Government).

Download and read the full response here.

European Commission Consultation on New Competition Tool

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Justification for a New Competition Tool

Based on our experience of the operation of the UK market investigations regime, we agree that a new tool that goes beyond the options currently available to the Commission under Articles 101 and 102 TFEU, and that enables the Commission to identify and tackle structural market issues, is likely to be a useful addition to the EU competition regime. As far as jurisdictional scope is concerned, however, while digital markets may be particularly prone to structural issues, and the need for rapid action may be greater, there is nothing inherently novel or ‘digital’ in the desirability of a ‘backstop’ regime that empowers an authority to take specific action if harms arise for which traditional antitrust tools are insufficient.

UK experience has demonstrated that, as well as being helpful for tackling issues in potentially oligopolistic markets (such as groceries or audit), such a tool can be valuable where markets are not functioning well due to wider factors, including the interplay with regulatory regimes (for example, rolling stock leasing, energy or private health care) or past government decisions (for example, airports). Each case will turn on its facts, however, justifying the need to individual assessments, within a clearly defined legal framework.

Our response to the European Commission Consultation

As lawyers qualified in the UK and Member States with significant expertise in advising clients on EU and UK competition law, our views also draw on personal experience of enforcing the UK competition regime gained by members of the firm while working for the UK Competition and Markets Authority and its predecessor, the Office of Fair Trading. Our hope is that this experience can provide useful pointers that may assist the Commission in the design of a new competition tool. To read our full response, click here.