The issue of barriers to exit has been neglected by competition authorities and by competition policy research. This is somewhat surprising as it is a topic which goes to the heart of why competition policy exists; if barriers to exit prevent or delay inefficient firms from leaving the market, then the normal competitive process of driving up market efficiency is hampered. This in turn reduces the benefits to other, more efficient firms, and to customers in terms of lower prices, better quality, etc. This article explores the reasons why, despite the importance of barriers to exit in the economic framework that underpins competition policy, very few competition authority decisions discuss the issue. It considers the approach to barriers to exit in different types of competition investigation, such as merger assessment, Article 101 and 102 TFEU cases, and State aid. The article also considers the scope for cross-disciplinary research and collaboration, such as in the design of insolvency or bankruptcy laws.
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Deba Das, Daniel Wylde and Sophie Tang
In Stamatis and Davies v. Competition and Markets Authority, Re Fourfront Group Ltd, the English High Court has for the first time considered aspects of the CMA's directors disqualification regime. The CMA regards the power to disqualify directors for competition law infringements as an important tool in its enforcement of competition law. The judgment in Stamatis and Davies v. CMA provides useful guidance on the approach of the English courts to applications by an individual subject to a competition disqualification undertaking for permission to act as a director, under section 17 of the Company Directors Disqualification Act 1986. This article looks at the way the court approached the principles that apply to applications in the non-competition context and highlighted some important considerations that are specific to the competition regime. This article also considers how the judgment may influence the manner in which the CMA approaches its use of its director disqualification powers in the future.
Sally Evans and Chris Boyd
The long awaited publication of the decision of the European Commission in Canon/Toshiba Medical Systems Corporation provides insight into the Commission's standpoint on the use of warehousing structures in transactions that are notifiable under the EU Merger Regulation and guidance on potential concerns relating to these arrangements. The decision is also a further illustration of the Commission's strict enforcement of procedural infringements (a fine of EUR 28 million was imposed in this case). The US and China also imposed fines for gun jumping in this case, with Japan also issuing a warning to the parties of a potential violation.
Mark Jephcott and Ruth Allen
The powers of the CMA to obtain information about a merger and to prevent (or even unwind) integration of merging businesses pending the conclusion of an investigation into the competitive effects of the merger are an extremely important part of the UK's voluntary merger control regime, which has no mandatory notification or standstill obligations. The CMA has adopted a series of decisions over the last two years which indicate that it is taking an increasingly robust approach to compliance with notices and orders issued in this context. This is line with both the global trend towards tougher enforcement of procedural merger control rules, and the CMA's increasingly strict approach to enforcement of procedural rules in other contexts, such as antitrust investigations and market studies. This article explores this trend and highlights some key lessons from recent cases for merging parties and their advisers, focussing in particular on fines imposed for breach of interim measures and non-compliance with formal information requests. It also identifies some possible reasons for the toughening of the CMA's stance including, in particular, the interplay with the anticipated impact of Brexit.
Eleni Gouliou, Colin Raftery, James Brassington and Juste Kapustaite
This article considers, with reference to recent cases, the approach of the Competition and Markets Authority in investigating mergers in dynamic markets. It examines the CMA's jurisdictional and substantive tools, sources of evidence, the use of counterfactuals, the assessment of when a merger may result in a substantial lessening of competition and appropriate remedies. The article concludes with a brief discussion on whether existing merger control tools are likely to be sufficient to ensure that merger control is able to continue to adequately protect consumers in dynamic markets in the future.
The field of artificial intelligence or ‘AI’ has been reshaping virtually every industry built on the idea that machines could be used to simulate human intelligence through so-called ‘machine learning’. Antitrust interest in this topic has been generated among regulators, policy-makers, academics and business in the EU and internationally. This article explores the extent to which AI may raise competition or other concerns for consumer welfare and whether existing legal and policy instruments are appropriate to deal with the emerging opportunities and challenges.
Andreas Lober and Timo Conraths
This article considers the legal issues surrounding the use of cheat software in online games, especially with reference to those games featuring significant online multiplayer functionality, such as massively multiplayer online games. Given the propensity of cheat software to ruin the gaming experience of bona fide players in such multiplayer settings, potentially resulting in significant economic and reputational losses for game publishers, the article evaluates the methods which may be employed by the game publisher to restrict the development, distribution and use of cheat software by the latter's developers, publishers and users. Using provisions of trademark, copyright and competition law, the authors examine the tools available to game publishers to stifle the spread of cheat software and maintain a fair playing field within their online multiplayer games.
The Competition and Markets Authority has recently opened an expanded office in Edinburgh. This article reviews the history of the enforcement of competition law (whether in antitrust, markets or merger control) by the CMA and its predecessors and in the Competition Appeal Tribunal and the Scottish courts. With Brexit, calls for increased devolution in competition law and a possible second referendum on Scottish independence, there will be further changes in the enforcement of competition law in Scotland, with the future likely to see more, rather than less, competition law enforcement there than has been the case to date.
Scott M. Kelly and Alex Nealon
A June 2019 appellate decision marked the end of the patent assertion by Game and Technology Co. (GAT) against Activision Blizzard and Riot Games.1 The patents at issue related to equipping virtual avatars with game items. Activision Blizzard was able to successfully invalidate the patent through inter partes review (IPR) proceedings at the US Patent and Trademark Office. This case illustrates the important role that IPRs play in US patent litigation, as well as the double-edged sword of obtaining very broad patent claims. The article walks through the history of the assertion, the invalidity arguments at the USPTO, and the final decision on appeal to the Federal Circuit, and discusses how IPRs may provide an effective response to patent assertions in the US.