Competition Section seminar 13 Oct 2015
Abuse of dominance - overview of
recent case law
Robert O’Donoghue, barrister, Brick Court Chambers
Essay competition
• Horsfall-Turner Essay Competition
– Prizes:
• 1st prize is £1,000
• 2 x Highly commended prizes of £250
• All winners will be invited as guests to
the Competition Section’s Annual Dinner,
where their prizes will be presented by
our keynote speaker
– Question: Brexit: what would it mean for
the UK competition law landscape?
– Entry deadline: 12 Nov 2015 5PM
www.lawsociety.org.uk/competition
Dinner and Awards
• 3 Dec - Competition Section Dinner and Awards
– Section members £125 + VAT
– Non member £170
– Exclusive table for up to 10 guests £1450 + VAT
Book event
www.lawsociety.org.uk/competition
Section LinkedIn Group
• Come and join our Competition Section LinkedIn
discussion group (members only)
– To join go to our
home page and
click on
‘LinkedIn Group’
www.lawsociety.org.uk/competition
Competition Section seminar 13 Oct 2015
Abuse of dominance - overview of
recent case law
Robert O’Donoghue, barrister, Brick Court Chambers
Litigating Abuse of Dominance
Cases in the English Courts
Law Society, 13 October 2015
Robert O‟Donoghue
brickcourt.co.uk
+44 (0)20 7379 3550
Topics
• Main actions in High Court (standalone and/or
follow-on/hybrid)
• Injunctive relief in High Court
• Implications of the new CAT regime for abuse of
dominance cases:
• Fast-track proceedings (FTP)
• Injunctions
• Standalone actions
• Collective actions
Main actions
(High Court)
Survey of the landscape (1)
• Surprisingly large number of standalone,
follow-on and/or hybrid abuse of dominance
actions in High Court:
• Series of FRAND/IP cases:
•
•
•
•
Unwired Planet v Samsung et al
IP Com v Nokia
Ericsson v Samsung [2007] EWHC 1047 (Pat)
Intel v Via Technologies (duty to license)
• Google cases:
• Streetmap v Google (trial November 2015)
• Foundem v Google
• Access to facilities/supplies:
• Purple Parking
• Arriva v Luton Airport
• Chemistree v AbbVie [2013] EWCA Civ 1338
Survey of the landscape (2)
• IP/environmental law intersection:
• EWRG & CEF v Recolight & ors
• Standardisation:
• Sel-Imperial v British Standards Institute
• Aftermarkets:
• GTS v Rolls-Royce
• Interconnection terms:
• Digicell v Cable & Wireless
• Excessive pricing:
• ATTHERACES Ltd & Anr v The British Horse Racing
Board & Anr, [2007] EWCA Civ 388
• Humber Oil v APB [2011] EWHC 352
• BHB Enterprises v. Victor Chandler (International)
Limited [2005] EWHC 1074
Survey of the landscape (3)
• Cumulative exclusionary behaviour:
• The Leaflet Company v The Royal Mail
• Sporting associations/rules:
• Adidas-Salomon AG v Draper [2006] EWHC 1318
(Ch)
• Margin squeeze:
• Unipart v O2 (CA), 30 July 2004
• Abusive supply terms:
• Ineos Vinyls Limited v Huntsman Petrochemicals (UK)
Limited [2006] EWHC 1241 (Ch)
• Follow-on damages cases:
• Albion Water (£1.7 million)
• Cardiff Bus (£33,818.79 in compensatory plus
£60,000 award of exemplary damages)
• Enron (failed on causation of loss)
Features of abuse of dominance
litigation (1)
• Stricter pleading requirements than
secret cartels:
• Sel-Imperial v BSI, Victor Chandler
• Expedited trials commonplace:
• GTS v Rolls-Royce
• Arriva v Luton
• Chemistree v TEVA
• Split trial on liability/quantum trials
commonplace:
• Leaflet Company Ltd v Royal Mail Group Ltd [2008] EWHC
3514 (Ch)
• British Afternoon Greyhound Services v AMRAC
• Chemistree v TEVA
• But see EWRG & CEF V Recolight & ors
Features of abuse of dominant
litigation (2)
• Trend towards proceeding on basis of
assumption of dominance
• Streetmap v Google
• Foundem v Google
• GTS v Rolls-Royce
• Trend towards targeted, or staged,
disclosure:
• Streetmap v Google
• Foundem v Google
• Precedent H cost budgeting used to reduce
costs/scale of litigation for both parties:
• GTS v Rolls-Royce
Injunctions
Documents – what you need
• Claim Form – always better, if not essential, to
have Particulars of Claim (see Dahabshill &
ors v Barclays Bank (High Court, 5.11.13))
• Application Notice
• Draft Order
• Affidavit in support, plus exhibits of core
documents (contract (if applicable),
correspondence, etc)
• Evidence of financial standing (accounts,
failing which bank guarantee)
• Claimant‟s undertaking in damages
Procedure – the basics
• In High Court, competition claims must be
brought in the Chancery Division unless matter
is a “commercial claim” under CPR 58.1(2).
• Application must be made to a Judge (see ChD
Guide, §5.2)
• Timing:
• In theory can proceed without notice –almost
certainly a bad idea in competition cases (ChD
Guide, §5.4)
• Normally 3 clear days‟ notice required
• In practice first hearing used for directions and
then contested hearing follows, say, 1-2 weeks
afterwards
Injunctions – the basic test
• American Cyanamid still applies
• Does claimant have a “seriously arguable
case”?
• Network Multimedia v Jobserve [2002] UKCLR 814
• Would damages be an adequate remedy for each
party?
• Holleran v Thwaites [1989] 2 CMLR 917
• Does balance of convenience favour an
injunction?
• Which course involves the least risk of injustice?
• What is the status quo ante?
• Does strength of the merits enter into it?
Mandatory injunctions
• Interim mandatory injunctions: “high degree of
assurance” (Zockoll Group Limited v Mercury
Communications Limited [1998] FSR 354 at 366)
• National Commercial Bank Jamaica Limited v Olint
Corpn Ltd [2009] UKPC 16, §17: “the court should
take whichever course seems likely to cause the
least irremediable prejudice.”
• Dahabshill & ors v Barclays Bank (2013), §49:
“„high degree of assurance‟” comes into play only
where the court is satisfied that the grant of the
injunction is likely to cause irremediable prejudice
to the Defendant.”
Main Competition Injunction Cases (1)
• Packet Media Limited v Telefonica UK Limited, [2015]
EWHC 2235 (Ch) (injunction granted)
• Dahabshill & ors v Barclays Bank, [2013] EWHC 3379 (Ch)
(injunction granted)
• Arriva v Luton Airport [2013] EWHC 1833 (injunction
refused but expedition ordered)
• The pharmaceutical cases (2012-2014):
• Intecare v Sanofi-Aventis (provisional injunction granted,
case then settled)
• IDL v Pfizer (injunction refused)
• Chemistree v Teva (injunction refused but expedition
ordered)
• Chemistree v AbbVie [2013] EWHC 264 (injunction
refused)
• AAH Pharmaceuticals v Pfizer [2007] EWHC 565
(injunction refused)
• Software Cellular v T-Mobile [2007] EWHC 1790 (injunction
granted)
Main Competition Injunction Cases (2)
• Adidas v Draper [2006] EWHC 1318 (injunction granted)
• ATTHERACES v BHB Limited [2005] EWHC 1553
(injunction granted)
• Getmapping plc v Ordinance Survey [2002] EWHC 1089
(injunction refused)
• Network Multimedia v Jobserve [2002] UKCLR 814
(injunction granted)
• Claritas Limited v Post Office [2001] UKCLR 2
(injunction refused)
• Sockel GMBH v The Body Shop International plc, [2000]
EuLR 276 (injunction refused)
• Holleran v Thwaites [1989] 2 CMLR 917 (injunction
granted)
Main Competition Injunction Cases (3)
• Countless injunction applications issued but
then settled, e.g.,:
•
•
•
•
Choice Money Transfer v Barclays
Commonwealth FS Bank v Lloyds Bank
iDealing v LSE
European Climate Exchange Limited v
LCH.Clearnet Limited
• Purple Parking v Heathrow
Tips and tactics (1)
 Is injunctive relief imperative? Would an
expedited trial suffice?
 Purple Parking v Heathrow [2011] EWHC 987
(Ch), Sockel GMBH v The Body Shop International
plc, [2000] EuLR 276, Arriva The Shires v. London
Luton Airport, Chemistree v Teva
 Know your Judge!
 Some anecdotal evidence that competition judges
less likely to grant injunctions so Cs may fare better
with non-specialist and Ds with specialist
 Judge(s) in charge of Interim List changes week to
week
Tips and tactics (2)
• Claimant has the advantage of head-start:
• As claimant always good to try to get provisional
order in place since may create de facto status
quo. May lead to settlement.
• Don‟t delay – delay can itself lead to refusal of
injunction
• Try to tee up correspondence with hearing in
mind – openness and consistency of position
key
• Remember that documents prepared in haste
may come back to bite (e.g., affidavit)!
Tips and tactics (3)
• Point selection particularly critical at interim
injunction hearing:
• Unlikely to be fruitful for D to engage on
market definition or dominance (Dahabshill &
ors v Barclays Bank)
• Relatively easy for C to posit market definition
or share that suffices for interim purposes
(Software Cellular v T-Mobile) (25%!)
• Focus on legal points that do not depend on
trial/evidence, at least that much
• Objective justification and efficiency arguments
likely to be matters for trial par excellence
Tips and tactics (4)
• Be realistic: usually much easier to ask the
Court to hold the ring than to do something
new:
• Court will inherently dislike imposing new terms,
relationships, or structures
• Interim relief cannot exceed final relief: Arriva v
Luton Airport [2013] EWHC 1833
• Inexcusable not to have documents in order:
• Presence of PoC gives confidence as to
seriousness of case
• Absence of complete/audit accounts cause for
concern
• Order must be practicable
Abuse of dominance &
new CAT regime
Fast-track procedure (1)
• See Rule 58 CAT Rules & Section 5 of CAT
Guide to Proceedings (¶5.139ff)
• CAT Rules provide:
• Fast-track can be ex officio or applied for (r58.1)
• Main substantive hearing asap and not later than 6
months from fast-track order (r58.2(a)))
• Capping of recoverable costs (r58.2(b)))
• Available for s47A claim but not collective action
(r74(3)(d))
• “Particular regard” criteria (non-exhaustive)
(r.58.3):
•
•
•
•
•
•
SME (<250 staff, turnover <€50m, balance sheet <€40m)
Time estimate (<3 days)
Complexity/novelty (more complex/novel = less FTP)
Witnesses
Extent of disclosure (if any)
Remedy sought
Fast-track procedure (2)
• Practical tips:
• Claim may be expedited even if FTP is not
granted so consider trade-offs
• FTP will often be considered at same time as
injunction application
• Apply at earliest opportunity – usually at same
time as Claim Form service
• Provide budget and draft directions to show how 6
month long-stop can be accommodated – be
realistic!
• FTP not precluded in damages case but requires
an “exceptionally focused approach”
• Standard disclosure not available under FTP so
consider carefully staged disclosure workability
• FTP can be stopped so Cs may be able to hedge
bets to some extent
CAT Injunctions (1)
• See Rules 67-70 CAT Rules & Section 5 of
CAT Guide to Proceedings (¶5.119ff)
• Only applies to proceedings in England &
Wales or Northern Ireland, not Scotland
• Rules quite similar to High Court save:
• In FTP case applicant may not be required to
provide an undertaking as to damages or
amount may be capped (r68.5)
• More express requirements on applicant‟s
ability to satisfy undertaking in damages
(r69.3)
• Breach of CAT injunction must be certified
to the High Court (r70.1)
CAT Injunctions (2)
• Other issues:
• CAT will apply American Cyanamid principles
• Serious question to be tried
• damages inadequate for claimant
• cross-undertaking in damages from claimant would
be adequate remedy for respondent
• balance of convenience
• other special factors
• Does injunction effectively give final relief?
• Have (i) evidence in support, (ii) draft order and
(iii) adequacy of undertaking in damages teed
up in advance (inc. additional security if
required)
• CAT generally expects applications with notice
– without notice “wholly exceptional” in
competition case (Guide, ¶5.136)
CAT standalone claims (1)
• CRA 2015 and CAT Rules 2015 create real
practical issues in terms of long-lasting effects
of (impractical) transitional rules
• Critical issue for application of transitional
rules will be whether cause of action “accrued”
before 1 October 2015 – usually means when
damage was suffered
• Practical upshot is that unless cartel/abuse was
implemented entirely after 1 October 2015,
claim will be subject to transitional rules, inc.
(dreadful) “old” CAT rules (e.g., standalone
claim damages either impossible or limited at
most to preceding 2 years)
CAT standalone claims (2)
• CAT Rules likely to stymie many cartel
damages actions for several years to come due
to long latency between harmful event and its
actual coming to light
• Chapter II/Art. 102 claims are inherently less
likely to be adversely affected since:
• they will typically be prospective in nature (and/or
may only straddle 2 year period before 1.10.15)
• may be only/mainly concerned with injunctive relief
• But claims arising out of long-running
investigations likely to be affected
• e.g., Google
Collective actions (1)
• Collective actions cover both Chapter I/101 and
Chapter II/102 claims
• No reason in principle why Chapter II/102 claims
should not be subject to collective actions in
practice
• Rules and transitional arrangements make Chapter
I/101 collective actions far less likely in next
several years. But Chapter II/102 claims likely to
be less adversely affected
• Rules favour UK claimants – who are automatically
included unless they opt-out - whereas non-UK
domiciled claimants must actively opt-in
• Practical question will be whether CAT is more
adept at managing complex multi-party proceedings
than High Court
Collective actions (2)
• Chapter II/Art. 102 collective actions more
likely all else equal not to raise “red flags”
that might apply in multi-level
direct/indirect collective claims arising
under a cartel:
• B2B victims of abuse more likely to have
unified common interest
• Conflicts between collective actions also
less likely
• Issues of pass-through typically less
relevant or even irrelevant
• Some of Chapter I/Article 101 issues
may arise in connection with excessive
pricing
Q&A
Essay competition
• Horsfall Turner Essay Competition
– Prizes:
• 1st prize is £1,000
• 2 x Highly commended prizes of £250
• All winners will be invited as guests to
the Competition Section’s Annual Dinner,
where their prizes will be presented by
our keynote speaker
– Question: Brexit: what would it mean for
the UK competition law landscape?
– Entry deadline: 12 Nov 2015 5PM
www.lawsociety.org.uk/competition