The CMA has today issued the first decision in which it has fined a retailer for resale price maintenance (RPM). To date, fines have only been imposed on the manufacturer or wholesaler requiring that the minimum price be charged to customers.

A retailer of musical instruments, GAK, had complied with the minimum pricing rules of its supplier, Yamaha. GAK agreed to pay the CMA a maximum fine of more than a quarter of a million pounds to settle the case. However, in a cruel twist of fate, Yamaha was not fined, as it was granted leniency from punishment in return for bringing its own infringement to the attention of the CMA.

The CMA also announced today that it is now using software to monitor pricing practices in the musical instruments sector, to enable it to spot RPM. It plans to roll out this monitoring tool to other sectors shortly.

In light of these developments, distributors and retailers should review their pricing practices to ensure they are not engaging in RPM. Supply contracts should be checked to ensure they do not contain inappropriate pricing clauses, such as those in which the supplier sets the resale price or, though not fixing the price, encourages, or discourages, compliance with a suggested resale price or RRP. If they do, seek further advice on what to do.
The CMA has today given businesses reassurance that, if they need to cooperate to respond to the covid crisis this cooperation will not necessarily be treated as a breach of the competition rules. However, the CMA guidance was caveated, maining businesses should still take care and seek legal advice first:

"...the CMA has no intention of taking competition law enforcement action against cooperation between businesses or rationing of products to the extent that this is necessary to protect consumers – for example, by ensuring security of supplies.

"At the same time, the CMA will not tolerate unscrupulous businesses exploiting the crisis as a ‘cover’ for non-essential collusion. This includes exchanging information on longer-term pricing or business strategies, where this is not necessary to meet the needs of the current situation. More guidance on this will follow from the CMA in due course." (Emphasis added.)
The CMA has made it clear that its substantive assessment of merger clearance applications will not change as a result of the coronavirus crisis. However, while still in line with this approach, the impact of the crisis has led to the CMA’s first provisional decision to clear a merger based on the “failing firm defence.”

On 27 December 2019, the CMA referred the acquisition by Amazon of a minority stake in Deliveroo for an in-depth Phase 2 review. It had concerns that the transaction may be expected to result in a substantial lessening of potential competition, on the basis that Amazon would be discouraged from independently re-entering the online restaurant food market and from further developing its position within the online convenience grocery delivery market in the UK.

Deliveroo subsequently presented evidence, including from its financial advisers, that persuaded the CMA that Deliveroo’s exit from the market would be inevitable without access to significant additional funding, which only Amazon would be willing and able to provide at this time. The CMA accepted that the imminent exit of Deliveroo would be worse for competition than allowing the Amazon investment to proceed. Although securing additional funding from other sources may have been possible before the COVID-19 outbreak, the CMA agreed that the pandemic has severely limited the availability of finance for businesses.

The case is also of interest in that the CMA has claimed jurisdiction to review the merger even though Amazon is acquiring only a 10-16% shareholding and certain accompanying rights, including board representation.

Third parties have until 11 May 2020 to provide their views to the CMA on its provisional findings. The CMA has until 11 June 2020 to reach its final decision.
On 27th March 2020, the Government passed emergency legislation to amend UK competition law to help healthcare, grocery and ferry companies maintain the provision of essential goods or services during the COVID-19 pandemic. The emergency legislation, made up of three Orders, excludes certain activities from the UK ban on anti-competitive agreements and practices contained in Chapter I of the Competition Act 1998.

The Orders only apply to activities undertaken in relation to the Covid-19 response. Any form of information sharing in relation to costs and pricing between businesses is expressly excluded, and all relevant agreements must be notified to the Secretary of State within 14 days of being entered into, if they are to benefit. EU competition law still applies but only to agreements capable of affecting trade with the EU.

The Orders are as follows:

The Competition Act 1998 (Health Services for Patients in England) (Coronavirus) (Public Policy Exclusion) Order 2020 (SI 2020/368). This Order excludes certain agreements relating to information sharing, staff sharing and deployment, joint purchasing, sharing facilities and division of activities between independent healthcare providers and between independent healthcare providers and NHS bodies from the Chapter I prohibition. This will allow health care companies to ensure the continuity of supply of essential healthcare products and services to the NHS.

The Competition Act 1998 (Groceries) (Coronavirus) (Public Policy Exclusion) Order 2020 (SI 2020/369). This permits (a) agreements relating to co-ordination about quantities and ranges of groceries, staff deployment, stock levels, store opening hours and the supply of goods to vulnerable customers between grocery suppliers and (b) certain agreements relating to sharing information on staff availability, storage capacity and vehicles and co-ordination of staff deployment between logistic service providers to ensure continuity of food deliveries.

The Competition Act 1998 (Solent Maritime Crossings) (Coronavirus) (Public Policy Exclusion) Order 2020 (SI 2020/370). This provides flexibility for operators of ferry services between the Isle of Wight and mainland UK.

The exclusions from the Chapter I prohibition are backdated to apply to agreements relating to relevant activities from 1 March 2020 in relation to health services and groceries, and 16 March 2020 for Solent crossings, until a date to be declared by the Secretary of State.
Although the UK has left the EU, in name, at least, it remains bound by the EU's State Aid rules durig the Transition Period. This means that the Government's powers to stem the damage to the economy caused by the Covid-19 pandemic are limited by EU law and subject to the prior approval of the European Commission.

Usually, such a decision takes weeks or months, but the European Commission looks to be moving more quickly in the current climate. The first State Aid scheme in response to the COVID-19 crisis, notified by Denmark, was cleared by the Commission within 24 hours. The Danish scheme is to compensate organisers of postponed or cancelled events with either (1) more than 1,000 participants, or (2) targeted at designated risk groups, such as the elderly or vulnerable people, irrespective of the number of participants.

The legal basis for the European Commission's decision was Art. 107(2)(b) TFEU. This rule provides that "aid to make good the damage caused by natural disasters or exceptional occurrences" are automatically "compatible with the internal market." EU law provides no precise definition of the notion of "exceptional occurrence" but the EU courts have consistently held that it must be interpreted restrictively. In the Danish decision, the European Commission states that COVID-19 crisis qualifies as an exceptional occurrence as it was not foreseeable and is not an ordinary event in terms of its effects on the economy and, therefore, it lays outside of the normal functioning of the common market.

As a result, interventions by Member States to compensate for damage caused by the response to the COVID-19 outbreak are justified. However, any aid provided by the UK must still receive EU approval and be fully compatible with its State Aid rules:
  • it must be proportionate to the damage caused by the exceptional occurrence,
  • it should only make good the damage caused by the exceptional occurrence, and
  • it must not over-compensate beneficiaries.
Vivienne Robinson has once again been ranked as the leading EU and competition lawyer in East Anglia by the legal publisher Legal 500:

"Vivienne Robinson Ltd, which is run by its name partner and sole practitioner Vivienne Robinson and specialises in competition law, is ‘worthy of a top ranking‘, according to one prominent lawyer in the region. Robinson ‘clearly has a tremendous amount of experience in dealing with EU competition law and is always willing to go the extra mile to get the job done‘. One client remarks that she is ‘an absolute pleasure to deal with‘. The firm, which was set up in 1995 and moved to East Anglia in 2009, has a long track record of acting for a wide range of businesses from SMEs to multinationals, and frequently works with national and international law firms to provide niche advice on competition law. Robinson’s recent highlights include advising SPAR on its involvement in the Competition and Markets Authority’s Phase 1 and Phase 2 investigation of the acquisition by Tesco plc of Booker Group plc, and handling the merger clearance aspects of a prospective acquisition for Novomatic Group. She also acted for a US company in a global acquisition, which involved checking competition law requirements in 41 countries."

On 11 June 2018, the Government made changes to the UK’s merger regime to recognise the growing importance of small British businesses in developing cutting edge technology products with national security applications. The government amended the threshold tests for businesses in the military, dual-use, computing hardware and quantum technology sectors to allow Ministers to intervene on certain grounds when the target business’s UK turnover is more than £1 million, down from £70 million threshold under the general merger clearance rules. They also removed the requirement that a merger or takeover in these sectors lead to an increase in the parties’ combined share of supply of relevant goods or services before the government is able to intervene.

The CMA has published guidance on the new rules at :
We are delighted that, today, The Legal 500 has recognised Vivienne Robinson as the number one lawyer in East Anglia for EU and competition law. Announcing the results of its investigations, The Legal 500 said, "At Vivienne Robinson Ltd, ‘excellent and practical’ name partner Vivienne Robinson is ‘a worthy competitor to established London practitioners’. Her niche focus on EU and UK competition law gives her ‘a keen understanding of the way competition authorities approach matters; she has a complete command of the topic and gives quick, sensible and commercial advice in a complex area of law’. Dual qualified in English and New York law, her previous experience includes stints at Stephenson Harwood and Dentons. On a large international matter involving some of the biggest names in technology and publishing she provided ‘brilliant service and business acumen’. Recent highlights include obtaining merger clearance for gaming technology group Novomatic to pursue its acquisition of Talarius. She also acted for bloodstock auctioneer Tattersalls on all competition aspects of its acquisition of a competitor."
CTFN News asked Vivienne for her view on Tesco's application to fast-track the CMA's investigation into its acquisition of Booker:

"UK competition expert Vivienne Robinson told CTFN that the CMA will decide on the fast track process within a few days. If the CMA agrees, it will save Tesco about a month's delay, Robinson expected. "The CMA is not obliged to agree to the fast track treatment. It can only do so if it believes that there is a realistic prospect that the merger will result in a substantial lessening of competition. The CMA will also only use the fast track in cases where the problems the merger raises relate to the whole of the transaction such that it looks like it may be blocked in its entirety.”

"Robinson suggested that the application for fast track treatment shows that Tesco and Booker know that the merger raises such serious issues that it might not be cleared. “The CMA will be concerned not only about the harm the merger will do in procurement markets but also in the markets for convenience retailing and for symbol group services. Tesco will be able to favor its owned stores in all local markets where it faces competition, whether from Booker symbols or third party symbols,” Robinson said.

"Robinson added that another potential harm would be that the combined company could “manipulate prices on a micro level to ensure it takes the retail margin wherever it operates.”"
Commenting on the day the surprise merger between Tesco and Booker was announced and the parties' confidence that they will obtain merger clearance from the CMA, the Grocer reports:

"Not everyone is as convinced the deal will sail through the competition process quite so smoothly. Independent competition solicitor Vivienne Robinson said the takeover will be the biggest case the CMA looks at this year.

""The CMA will examine if Booker does indeed have a decisive influence over the stores and to what degree any contractual arrangements give it control over the sites and what they stock,” she added.

""What regulators will be particularly concerned about is Tesco taking control of the supply chain to its downstream competitors in the smaller grocery store end of the market. It will ask what the implications are of Tesco being the distribution chain supplier to those stores and whether they could raise prices.”"

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Vivienne Robinson Solicitors is the trading name of Vivienne Robinson Ltd, a law firm regulated by the Solicitors Regulation Authority (SRA no. 598617) and covered for PII purposes by Liberty Mutual.
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