President Biden’s unprecedented July 9, 2021, Executive Order 14036 represents a potential watershed moment in U.S. competition policy. The wide-ranging Executive Order (EO) includes 72 initiatives that aim to enforce existing antitrust laws and other consumer protection regulations, to be undertaken by at least 15 federal departments, offices, and agencies. The Biden Administration’s stated hope is that these efforts will drive down prices for consumers, increase wages for workers, and facilitate innovation.
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An Unusual Purchasing Cartel: EU Fines Ethylene Purchasers
On July 14, 2020, the European Commission adopted its 33rd cartel settlement decision: an unusual one involving a purchasing cartel, in the ethylene merchant market. Four companies were found liable for having colluded for over 5 years to drive down the prices in monthly ethylene merchant bidding markets. Westlake was the first to apply to the Commission and received immunity from fines (which would have been about Euro 190M). The other three were fined in aggregate Euro 260M.
What are the interesting features of this cartel decision?
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CMA Guidance on its Approach to Merger Assessments during the COVID-19 Pandemic
The CMA has provided guidance on its expected approach to merger assessments during the Covid-19 pandemic. While the timescales and substantive assessment of a merger’s effects on competition remain unchanged, the CMA has made a number of adjustments to its working arrangements in order to meet deadlines and progress cases. However, it is likely that some aspects of investigations may be subject to some delay.
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Joint DOJ/FTC Antitrust Statement on US Labor Markets in the COVID-19 Crisis
On Monday April 13, 2020, DOJ and the FTC issued a joint statement warning employers that COVID-19 does not provide a reason to tolerate anticompetitive conduct that harms workers. The agencies said that they are on alert for collusion and other anticompetitive conduct in labor markets during the crisis. They are focused on agreements to
Changes to Merger Rules
At the EU level, Commission staff have adapted to working from home but are aware of the challenges in dealing with tight timeframes presented by merger notifications (including securing meaningful input from industry participants which may be affected by a transaction). The Commission has therefore issued an appeal to request parties to delay merger filings as much as possible. Other authorities have indicated that review timeframes may be extended.
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Changes to State Aid Rules
In these extraordinary times, economies around the World including Member States are pumping money into their economies. Businesses and whole sectors are crying out for special support. State support in the EEA above a low de minimis threshold is subject to strict state aid rules which requires pre-clearance by the European Commission under strict conditions.
Collaboration Between Competitors in Times of Crisis
It is important to remember that as businesses struggle in these times to cope with issues like distribution, sourcing ingredients, components and other resources, they may look to collaborate with rivals. In fact, many businesses have been doing exactly that. Collaboration between competitors can be perfectly benign and may no anti-competitive effects (for example, in setting standards, lobbying efforts). However, competition rules do apply and coordination of prices, market sharing, cost allocation, coordinated output reductions or sharing competitive sensitive information, would be prohibited. Some restrictions are regarded as ‘hard core’ and rarely worthy of exemption (price fixing, customer and market allocations and quantity restrictions). Penalties for infringement could lead to significant fines and possible private damages litigation.
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Measures to Protect Against Predatory Conduct
Perhaps the first authority to warn about the perceived risks, the UK’s CMA issued a warning on 6rh March 2020 to traders about taking advantage of the COVID-19 pandemic. CMA chief executive Andrea Coscelli said: “We urge retailers to behave responsibly throughout the coronavirus outbreak and not to make misleading claims or charge vastly inflated prices. We also remind members of the public that these obligations may apply to them too if they resell goods, for example on online marketplaces.” This warning was triggered by the rising cost of hand sanitisers. The CMA went on to warn that it would take enforcement action against those suspected of such conduct and, if necessary, would also consider requesting the Government to introduce price controls. It has created a taskforce to monitor market behaviour during the crisis. Details about the Taskforce, its mandate and how to lodge complaints can be found here.
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Brexit – A Long Goodbye
On January 31, the UK exited the EU, after more than three years of constitutional turmoil. The UK now embarks on a year of transition and negotiations as it heads out into a world of new trade relations, with opportunities and challenges in equal measure. This is a watershed moment for all companies who trade in or out of the UK or the EU. Whether trading in goods or services, companies face strategic re-assessments not just of where they trade, but how they organize their trading activities: upstream for inputs and downstream to their customers and markets. How will they be affected – from a regulatory, trade, customs, commercial, investment and disputes perspective?
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UK Competition Law Enforcement Post-Brexit: Choppy Waters Ahead
CMA Brexit Draft Guidance
On 28 January 2019 the UK Competition and Markets Authority (‘CMA’) issued draft guidance on the effects of any no-deal Brexit on the CMA’s functions and its enforcement approach. This guidance has been made more urgent by the continuing UK political divisions that have plagued the Brexit process and which could see the UK crash out of the EU without any deal in place on 29 March 2019.
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