EU/UK Competition Law Newsletter – May 2013

Not Just Because You Say So; EU General Court Guidance on Proving Parallel Behaviour Is Not Independent

An EU General Court (GC) judgment has considered the difficult issue of independent parallel behaviour by competitors under EU competition law, and in particular when this strays into a "concerted practice". This issue is important since an illegal anticompetitive agreement (such as a cartel) can arise under EU law not only when there is a true agreement or understanding between parties, but also simply on the basis of a "concerted practice".

The judgment, handed down on 12 April 2013, concerned an appeal against a 2008 European Commission (EC) decision concerning 24 European collecting societies (which manage copyright relating to musical and other works in individual countries). One part of the decision found a concerted practice between the collecting societies, under which each collecting society limited, in its reciprocal representation agreements with other collecting societies, the licence granted to another society to the territory of that other society.

The GC found that the EC did not have documents proving the existence of concertation between the collecting societies as regards the territorial scope of the mandates which they granted each other. Further, the EC had not shown that it was implausible that the parallel conduct of the collecting societies was due to the need to fight effectively against unauthorized musical works, as opposed to being due to concertation.

The judgment therefore confirms once again that genuine unilateral decision making does not raise competition law concerns, even where competitors take the same approach. In order for apparently independent behaviour to become potentially problematic on the basis that it amounts to a concerted practice, the EC (or other competition regulators) must provide evidence of concertation or at least show that the explanations provided by the parties under investigation are implausible and that the only reasonable explanation is concertation.

UK Court Awards Damages for Abuse of Dominance

On 28 March 2013, in a very unusual case, the UK Competition Appeal Tribunal (CAT) awarded damages in a private claim relating to an abuse of dominance. The claim was based on the finding, also made by the CAT, that water company Dŵr Cymru had infringed the UK prohibition on abuse of dominance (it was therefore a "follow-on" claim). This earlier finding of the CAT was that the price at...