Compliance Warning: Do Not Restrict Cross-Border Trade
The Swiss Competition Authority (SCC) fined German car manufacturer BMW CHF156
million (around USD163 million or EUR130 million) on 24 May 2012 for restricting
cross-border trade between the EU and Switzerland. Since the rules applied by
the SCC in this area are effectively the same as those which apply to trade
between EU/European Economic Area (EEA) countries, the case provides yet another
warning of the care which companies need to take in this area.
BMW had included in contracts with its dealers a clause requiring them to sell
new vehicles under its BMW and Mini brands only in the EEA. Switzerland is not
in the EEA so, for example, a dealer in neighbouring France or Germany could not
sell to a customer in Switzerland, even if approached directly. A number of
complaints were made to the SCC by Swiss customers who had therefore been unable
to purchase a BMW or Mini outside Switzerland. The SCC, like its counterparts in
the EU/EEA countries and like the European Commission (EC), is highly vigilant
in relation to restrictions against cross-border trade, particularly bald
restrictions such as that applied by BMW.
European Commission Seeks to Protect Customers and Competitors of Google
The EC’s highest-profile competition law investigation at the moment is one into
allegations that Google has illegally abused a dominant market position in the
EU. An announcement made by Competition Commissioner Joaquίn Almunia on 21 May
2012 concerning this case is of great interest to all of Google’s competitors
and customers, since it indicates that the company may be forced to change its
business practices in the EU.
Almunia announced that the EC has identified four activities which may be
considered as abuses of dominance and therefore illegal. He invited Google to
table proposals to deal with these points. The activities of Google identified
by the EC as potentially problematic are: displaying links to its own
specialized search services (e.g. for restaurants) differently than it does for
links to competing specialized search services; copying, without permission,
original material from the websites of competing specialized search services and
using that material on its own sites; using agreements which de facto
require third-party websites only to display search advertisements from Google;
and using agreements which restrict software developers from offering tools that
allow advertisers to transfer online search advertising campaigns from Google’s
AdWords platform to other search advertising platforms.
UK Government Supports Private Competition Law Actions
On 24 April 2012, the UK Government published a consultation document on methods
to promote private sector challenges to anti-competitive practices in the UK.
This is intended to cover actions by businesses seeking to stop anti-competitive
behaviour (for example seeking an injunction against termination of supplies by
a dominant company) as well as actions for damages by consumers and businesses
(such as in relation to cartel activity which has increased prices). The regime
would operate alongside the public enforcement regime operated in the UK by the
Office of Fair Trading and EC.
The document includes, amongst other things, consideration of: whether to
introduce a rebuttable presumption of loss for cartel cases, likely to take the
form of a presumption that a cartel had affected prices by a fixed amount, such
as 20 %; whether to introduce an opt-out collective actions regime for
competition law; the promotion of Alternative Dispute Resolution (ADR); and how
to ensure private actions complement the public enforcement regime. This is a
very significant consultation and has attracted great interest in the UK. The
consultation is open until 24 July.
Report on Competition Law Enforcement in the Food Sector
On 24 May 2012, the European Competition Network (ECN) (an informal grouping of
the EC and the 27 EU member state national competition authorities) published a
significant report on competition enforcement in the food sector across the EU.
The report shows that the food sector has been a priority of competition
authorities in the EU over the last few years and that their actions have
intensified since the food price crisis broke out in 2007. The largest number of
cases have concerned processing and manufacturing.
The report follows the EC’s Communication of 28 October 2009 on a
better-functioning food supply chain. It is clear that the food sector will
remain a high priority for EU competition authorities. They are currently
investigating about 60 competition law cases and carrying out other general
market monitoring actions.
Additional EU/UK competition law news coverage can be found in our
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