On 12 February 2019, the UK Competition and Markets Authority (CMA) imposed a fine of £200,000 on Electro Rent for gun-jumping.[1] This is the third occasion on which the CMA has penalised a company for breaching “standstill” or “hold-separate” obligations under the UK merger rules, and comes only one day after the Competition Appeal Tribunal (CAT) upheld the CMA’s first gun-jumping fine (imposed on Electro Rent in June 2018 for a separate infringement).[2] The CMA has shown increased readiness to penalise companies for breaching procedural rules, in particular in relation to merger proceedings, consistent with recent action by the European Commission (EC) and national agencies in the EU. The CAT’s judgment strongly endorses the CMA’s approach: “[i]t is a matter of public importance that the merger control process, and the duties it creates, are strictly and conscientiously, observed.”[3]
Mr David Henry v Office of Communications
On 6 February 2019, the CAT ruled that it had no jurisdiction to review Ofcom’s decision to approve the BBC’s
La Gaitana Farms SA and Others vs. British Airways Plc
On January 29, the Court of Appeal held that the English courts lacked jurisdiction to find a standalone infringement in
J Sainbury PLC and ASDA Group Limited vs. CMA
On January 18, the CAT quashed the procedural timetable set by the CMA in the Phase 2 review of the Sainsbury’s/Asda merger. The CMA had given the parties a little over two weeks to respond to over 400 pages of working papers and scheduled the Main Party Hearings during the same period. The CAT found the deadlines were unreasonable and unfair given the volume and complexity of the papers, the CMA’s failure to engage in a longer pre-notification period despite the parties’ requests, and the overlap of the deadlines for the main hearing and response to the working papers. The CAT did not specify new deadlines, which were left to the CMA’s discretion, having regard to the overall statutory review period.
CMA vs Concordia International RX (UK)
In October 2017, the CMA obtained a warrant to enter Concordia’s (now called Advanz Pharma) business premises and search for documents relating to suspected anticompetitive behaviour in the pharmaceutical sector. Concordia applied to have the warrant discharged because it had been cooperating with the CMA’s investigation, and so there was no basis for the CMA to suspect that it would tamper with evidence.
2018 Review
CMA Activity
As in 2017, the CMA leadership devoted much of 2018 to preparing for Brexit – publishing draft regulations, revising guidance, and increasing the CMA’s workforce.