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Friday, 25 January 2013

Environmental concerns, non-economic objectives and washing machines

Having just marked a whole bunch of essays where students discussed the role, if any, of non-competition concerns in Article 101(3) TFEU analysis, which involved a discussion of the CECED decision by the Commission, I thought the following link was of interest: http://greedgreengrains.blogspot.co.uk/2012/12/do-consumers-benefit-from-energy.html It tells the story of what happened when the US Department of Energy increased standards for washing machines in 2007. The short version is that sales of less efficient washers reduced, although their prices increased and sales of more efficient washing machines increased significantly. The big point, however, is that the prices of the more efficient washing machines fell sharply around the time of the policy change. To quote: "… the price declines of the efficient washers was larger the price increases of the less efficient washers. And while overall quality of washers increased, average prices declined. Thus, not counting public and private benefits from energy saving, it seems pretty clear that consumers gained substantially from the policy change."

This is interesting because the CECED decision is often discussed as a case where the environmental objectives, energy efficiency, overruled or were at least of equal importance to the economic benefits to consumers, which were said to be less energy consumption and therefore cheaper bills. The analysis of the US case suggests that actually, and unexpectedly, there was no necessity to discuss environmental benefits – there were concrete economic benefits for consumers. It is politically useful to show competition law marching in step with environmental policy, but that is another issue.

My thanks to the Twitterfeed of Mark Thoma: @MarkThoma

Monday, 21 January 2013

The singing Professor


Congratulations to Amelia Fletcher, who has been appointed Professor of Competition Policy at the Centre for Competition Policy, University of East Anglia. The CCP's take is here: http://researchatccp.wordpress.com/2013/01/21/coverage-of-amelia-fletcher/

Professor Fletcher's side-line can be found here: http://www.myspace.com/tendertrap
Any other competition law and policy practitioners with interesting alternative activities?

St Gallen Competition Conference




St.Gallen International Competition Law Forum ICF - April 4th and 5th 2013


The 20th St.Gallen International Competition Law Forum ICF will be held on April 4th and 5th 2013. Once more, it will feature a thrilling selection of hot topics in current competition law issues and some of the most distinguished speakers in the field, including JoaquĆ­n Almunia (Vice-President of the EU Commission and Commissioner for Competition), Andreas Mundt (President of the German Competition Authority) and William Kovacic (Former Commissioner of the U.S. Federal Trade Commission ). Taking place in one of Switzerland's most beautiful cities, the St.Gallen ICF gives you the opportunity to meet, discuss and mingle with fellow competition lawyers and leading competition law experts from all over the world. Further information including a detailed programme are available on the conference website:http://www.sg-icf.ch/.



Topics:                         Current issues and developments in competition law
Programme:                 http://www.sg-icf.ch/programme/
Date:                         April 4th and 5th 2013
Location:                         St.Gallen, Switzerland
Registration:                 Registration is now open on our website (http://www.sg-icf.ch/conference-registration/)

Wednesday, 9 January 2013

Regulators and competition law enforcement

One of the slightly mysterious aspects of competition law enforcement in the UK is that, although a number of the independent regulators have concurrent competition powers alongside the OFT, they only use them rarely. The BIS consultation on the reform of competition law in the UK identified only two infringement decisions and there have not been any since the consultation paper. As one of the aims of the reforms has been to increase the number of enforcement decisions, the Enterprise and Regulatory Reform Bill included a number of changes to the legislation in order to encourage the regulators to use their competition law powers (contained in Clause 54 and Schedule 14).

Before Christmas, the government introduced a new clause into the Bill (http://www.publications.parliament.uk/pa/ld201213/ldhansrd/text/121218-gc0001.htm#12121867000429 at column GC 509). This clause would allow the Secretary of State, using a statutory instrument, to amend the Competition Act and/or the Enterprise Act to remove the concurrent competition powers that the regulators currently have (with the exception of Monitor). There are certain consultation requirements and the affirmative resolution procedure would have to be followed. The Minister, Lord Marland, explained that this was a reserve power, to be used if the new concurrency arrangements do not work or if there was "abuse of the system". This is a strong signal to the regulators that they will have to do better.

It is easy to state this, but more difficult to work out what it means. Presumably the regulators will not only have to bring more cases, but these cases will have to be successful, because bringing lots of unsuccessful cases would show that you are not using the system properly. How many cases could be expected in particular sectors of the economy? Some of the regulators, Ofwat, the CAA and the Northern Ireland regulator, might well struggle to generate all but the occasional case, for perfectly understandable reasons. The focus will presumably be on the performance of Ofcom, Ofgem and the Rail Regulator. Ofcom in particular, may well be under the spotlight, given that the CMA is to be chaired by Lord Currie and the chief executive designate, Alex Chisholm, has come from the Irish communications regulator. More decisions would mean more appearances in front of the CAT, something Ofcom, in particular, will not relish.

Who knows what the target will be? Where will the Minister obtain the information to assess the regulators' performance? Government departments are not in close contact with the relevant industries, except perhaps in rail, and the specialist consumer bodies have been closed down. If the nuclear option is exercised, there will be great pressure on the CMA to bring a case or cases soon after this has been done.

This is a policy based on assumption, for which there does not seem to be any evidence, that there are a number of competition problems in these industries, which the regulators need to solve through using their competition law powers. As Lord Berkeley spotted in the debate on the clause, this is a government impinging on the independence of the regulators through a strong suggestion that there are a series of correct decisions to be made.