EU and Competition

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The investigation is being carried out under the CMA’s competition law powers rather than under its consumer protection functions.

By John D. Colahan and Anuj Ghai

On 18 June, the CMA released an update noting that it had launched an investigation under Chapter II of the Competition Act 1998 into suspected breaches of competition law by four pharmacies and convenience stores. In particular, the investigations relate to suspected charging of excessive and unfair prices for hand sanitiser products during the COVID-19 pandemic.

As noted in a prior blog post, the CMA believed that there was a significant risk that prices would rise above justifiable levels in a number of sectors because of the COVID-19 outbreak, coupled with the restrictions on businesses and people. As of 17 May, the CMA had written to more than 200 traders about this issue. In its communication, the CMA asked for more information or expressed concern about what the CMA considered may be unjustifiable price increases.

The UK government has relaxed the application of UK competition law to certain types of agreements across sectors.

By John D. Colahan and Anuj Ghai

On 21 May 2020, the CMA published a register containing links to each public policy exclusion order and notified agreement related to COVID-19 in the UK. A public policy exclusion order is a legislative tool used by the Secretary of State for Business, Energy and Industrial Strategy to relax UK competition law for certain agreements that may normally be considered anti-competitive.

The Secretary of State has made several public policy exclusion orders to enable a coordinated response to the COVID-19 pandemic. In March, for example, the UK government considered it necessary to relax the application of UK competition law to certain types of agreements in the groceries sector, in order to ensure a smooth and efficient supply of food and essential grocery products to isolated and vulnerable consumers.

The taskforce continues to receive and monitor complaints about unfair practices in relation to cancellations and refunds and potentially unjustifiable price rises.

By John D. Colahan and Anuj Ghai

On 21 May, the CMA released a further update setting out the work of its COVID-19 Taskforce in responding to complaints regarding competition and consumer protection problems arising from the novel coronavirus and measures taken to contain it. This follows a 30 April report (summarised here) which set out the programme of work the CMA intended to undertake to deal with complaints about unfair practices in relation to cancellations and refunds.

Based on the complaints received and additional information received from consumer bodies, such as Which? and Citizens Advice, the CMA’s principal concerns continue to relate to unfair practices in relation to cancellations and refunds and unjustifiable price increases, particularly for essential goods. The CMA notes that from 10 March to 17 May it was contacted more than 60,000 times about coronavirus-related issues; further, the rate at which consumers are contacting the CMA has increased in recent weeks suggesting that problems continue to persist.

The CMA has launched a programme of work to investigate reports of businesses failing to respect cancellation rights during the COVID-19 pandemic.

By John D. Colahan and Anuj Ghai

The CMA’s COVID-19 Taskforce Update on 24 April 2020 noted that its COVID-19 Taskforce had received a significant volume of complaints about unfair practices in relation to cancellations and refunds. On 30 April, the CMA released a further update setting out the programme of work it intends to undertake to deal with the issues raised. The CMA will act under its consumer protection powers, rather than under competition law, to deal with unfair practices relating to cancellations and refunds.

The CMA has launched a programme of work to investigate reports of businesses failing to respect cancellation rights during the COVID-19 pandemic.

By John D. Colahan and Anuj Ghai

The CMA’s COVID-19 Taskforce Update on 24 April 2020 noted that its COVID-19 Taskforce had received a significant volume of complaints about unfair practices in relation to cancellations and refunds. On 30 April, the CMA released a further update setting out the programme of work it intends to undertake to deal with the issues raised. The CMA will act under its consumer protection powers, rather than under competition law, to deal with unfair practices relating to cancellations and refunds.

The CMA is concerned that businesses may be engaging in unfair practices in relation to cancellations and refunds, and unjustifiable price increases.

 By John D. Colahan and Anuj Ghai

Background

On 24 April 2020, the Competition and Markets Authority (CMA) published an update on the work of its COVID-19 Taskforce (the Taskforce) (the Update Report). Shortly after establishing the Taskforce, the CMA launched an online service to allow businesses and consumers to report “unfair practices” related to COVID-19. The  Update Report summarises the nature and volume of complaints that the CMA has received so far and the actions it has taken in response. The CMA intends to publish additional reports while unfair practices related to COVID-19 persist.

The guidance includes a refresher on “failing firm” defence claims, for which the CMA will maintain a high bar.

By John D. Colahan, Stephanie Adams, and Peter Citron

On 22 April 2020 the UK’s Competition and Markets Authority (CMA) published guidance on its assessment of mergers during the COVID-19 pandemic. This follows the guidance the CMA issued on 18 March 2020 regarding its working arrangements during the pandemic.

The new guidance is welcome as a clear statement that it is business as usual in terms of the ability of parties to notify mergers and engage with the CMA, but that the CMA is ready to adapt within the framework of its existing rules to the particularities of the present crisis.

Although the decision appears on its face to be a positive development for online marketplaces, it is does not definitively resolve questions of liability.

By Deborah J. Kirk and Elva Cullen

On 2 April 2020, the Court of Justice of the European Union (CJEU) delivered its ruling in Coty Germany v Amazon — marking a development for online marketplaces in relation to liability issues. The case had raised the possibility that online marketplaces could be found directly liable for infringing products sold on their platforms.

Currently, if a third party sells infringing products, within the EU, on an online marketplace, the online marketplace has (i) no liability if it  does not have actual knowledge of the infringement or where it acts promptly to remove the infringing content once it becomes aware of it: and (ii) only secondary liability where it has knowledge and fails to remove the infringing content.

The German Federal Court had requested a preliminary ruling on the interpretation of Article 9(3)(b) of the 2017, and Article 9(2)(b) of the now-repealed 2009, Trade Mark Regulations (Council Regulation 2017/1001 and Council Regulation No 207/2009 (as amended by Regulation 2015/2424) respectively) asking: Does a person who, on behalf of a third party, stores goods which infringe trade mark rights, without being aware of that infringement, stock those goods in order to offer them or put them on the market for the purposes of those provisions, if that person does not itself pursue those aims?

The CJEU addressed this question by ruling that a person who, “on behalf of a third party, stores goods which infringe trade mark rights, without being aware of that infringement, must be regarded as not stocking those goods in order to offer them or put them on the market for the purposes of those provisions, if that person does not itself pursue those aims” [emphasis authors’ own].

D.P.C.M. now includes measures for certain manufacturing industries, as well as call centres and civil engineering works, but excludes employment agencies.

By Giancarlo D’Ambrosio and Giovanni B. Sandicchi

By decree of the Ministry of Economic Development, adopted yesterday and in force since today, March, 26, 2020, several amendments have been made to the list annexed to the D.P.C.M. of March 22, 2020.

Specifically, from March 28 to April 3, the suspension of activities comes into force for the manufacture…

The new decree imposes measures in effect from today until April 3, 2020 to combat the spread of COVID-19.

By Giancarlo D’Ambrosio and Giovanni B. Sandicchi

Yesterday evening, the Italian government adopted a new decree (D.P.C.M. of March 22, 2020), which suspends, as of today, non-essential industrial and commercial production activities throughout the country to contain the spread of COVID-19.

Among the provisions of the Decree, the following are particularly noteworthy:

i. All industrial and commercial production activities are suspended, with the exception of those providing public utilities and essential services, as well as a series of activities considered essential and contained in a list reported under Annex 1 of the Decree, which may be supplemented by subsequent decrees. The list includes, among other activities, the entire beverage and food supply chain, the pharmaceutical healthcare devices industry, strategic industries, and related production chains. In addition, the functional activities to ensure the continuity of the authorized supply chains will also remain open, subject to notification to the Prefect of the province where the production unit is located.

ii. Functional activities to deal with the emergency are permitted, including those relating to the production, transport, marketing, and delivery of medicines, health technology, and medical-surgical devices, as well as agricultural and food products.