Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Grenfell discusses CMA’s enforcement activities against cartels, anti-competitive practices, (Nov 12, 2015)

By Michael Menzhuber, J.D., LL.M.

In a speech delivered today in London, Michael Grenfell, Competition Market Authority (CMA) Executive Director for Enforcement, discussed how the CMA tackles cartels and anti-competitive practices. As a preface, he emphasized the importance of not confusing how the CMA undertakes enforcement activities (the “means”) as opposed to the objective that it is seeking to achieve (the “end”).

The “means.” Grenfell noted that the CMA, in carrying out its enforcement activity, is committed to the highest standards of fairness in its dealings with businesses and individuals and that it does its best to be impartial and avoid bias. In furtherance of this commitment, he explained that the CMA is: (1) committed to listening to arguments and evidence with an open mind and (2) striving, in its evaluations and assessments, to safeguard against viewing matters through preconceptions and confirmation bias. That have been said, the CMA is alert to attempts to exploit this “fairness” approach by “gaming” the system through spurious procedural challenges and other delaying tactics.

The “end.” There was no inconsistency between the CMA’s “means” approach and being serious about the “ends”: fulfilling its statutory duty to promote competition, Grenfell stated. The CMA is determined to deploy its available resources as effectively as possible to:

• put an end to anti-competitive agreements, arrangements and concerted practices, abuses of dominance, and criminal cartels;

• penalize, where appropriate, those who engage in such practices; and

• send a strong message of deterrence.

He explained that this was not an anti-business message. Businesses lose out from anti-competitive practices, and vigorously combating illegal anti-competitive practices is a pro-business, as well as a pro-consumer, approach.

Principles in practice. According to Grenfell, the CMA’s means of enforcement, procedural fairness, and rigor has gone a long way in addressing many concerns that have been expressed. While the risk of confirmation bias never can be entirely eliminated, stringent safeguards have been put in place to guard against it. Also, after noting that decision-makers in criminal cartel offense proceedings are independent of the CMA, Grenfell discussed how the CMA learned from an adverse ruling in a case involving the galvanized steel tanks carte.

Number and speed of cases. The CMA should, and can, increase the number and the pace of competition enforcement cases without compromising its high standards of fairness and rigor, Grenfell explained. He noted that greater procedural fairness and robustness, through a Case Decision Group in which a new set of people look afresh at the evidence and arguments, will necessarily take more time. However, if cases are fairer and more robust, there is a lower chance of appeals and a consequential expectation that people will be deterred from “taking their chances” with unmeritorious appeals.

Because the CMA does not have infinite resources, it must prioritize its investigations. Grenfell acknowledged concerns that the CMA does not take seriously the complaints that people make about alleged anti-competitive practices and that it is barely worth submitting complaints to the CMA. In emphasizing that this was not the case, he noted the CMA’s prioritization criteria.

Large and small cases. Grenfell responded to criticism that the CMA seems to prioritize small-scale, local cases that have limited impact and weak deterrent effect. After noting a CMA investigation involving major corporates, he explained that it would be a mistake to underestimate the deterrent value of smaller-scale or local cases.

Deterring individuals. The official explained that, in terms of deterrence for individuals, the CMA was considering the implications of the acquittals in the galvanized steel tanks trial. For cartel activity after April 2014, prosecutors no longer need to prove dishonesty. The CMA would continue to assess pre-April 2014 prosecutable offenses on their merits and prosecute where appropriate.

Grenfell concluded by stating that the CMA is determined to protect consumers and benefit business and the wider economy by the vigorous enforcement of competition law, which involves increasing the volume and speed of cases while maintaining high standards of fairness and rigor.

News: Antitrust