Ofgem consultation (11 pages, PDF) on ScottishPower EnergyNetworks' proposal (30 pages, PDF) to change the basis of calculation of electricity distribution use of system charges for independent distribution network operators. Responses by Tuesday 17 June 2008.

Update, 9 May 2008: ScottishPower EnergyNetworks has published additional documentation on this proposal: a detailed modification report (72 pages, PDF) and reviews by Frontier Economics (58 pages, PDF) and Reckon LLP (16 pages, PDF).

Competition Appeal Tribunal summary (2 pages, PDF) of National Grid's ground for appeal against Ofgem's decision that it had abused a dominant position by entering into and enforcing certain aspects of its contracts for supplying gas meters. National Grid seems to be challenging most of Ofgem's findings. Requests for third-party intervention by Wednesday 21 May 2008.

European Commission decision (77 pages, PDF, now a broken link) finding that Greece had breached Article 86(1) in conjunction with Article 82 by granting special rights to lignite to the largest electricity generator.

The decision was made on 5 March 2008. A one-page summary was put in the Official Journal on 15 April 2008. The full decision was on the relevant page of DG Competition's website on 24 April 2008.

Update, 3 May 2008: The full decision has been removed from the DG Competition's website. I have a copy of the file that was available on 25 April 2008 if anyone is interested (or wants to give me a good reason why it should not be relied on or quoted from). Franck

Competition Commission consultation (169 pages, PDF and appendices) on its market investigation into BAA under the Enterprise Act 2002.

This focuses on the possibility of ordering the divestment of some airports. According to the Competition Commission:

275 ... Others issues identified related to services to passengers: car parking; minibus, bus and coach operators; taxis; car hire; retail more generally; and also use of compulsory purchase order powers.

276. These concerns arise irrespective of common ownership, reflecting the strong position of any airport operator over the supply of services at an airport; some also relate to practices also at other airports. It is, however, currently not clear to us that they are appropriately addressed under the terms of this inquiry rather than by other competition legislation. But we invite further comments on concerns from concessionaires or other suppliers arising from BAA’s common ownership of its seven airports ...

As promised, there is some discussion of the economic regulation system (including the CAA's last-minute increases to capital expenditure forecasts) and the lack of financial ring-fencing. But this paper does not discuss what to do about it: this seems to have been treated as a question for a future consideration of remedies.

Responses by Friday 30 May 2008.

European Commission notice (1 page) that it has opened an investigation under the State aid rules into subsidies to the Scottish ferry companies CalMac and NorthLink. A public consultation on the Commission's concerns as to whether the payments are justified (presumably under Article 86(2)) is expected shortly.

Appeal court judgment (16 pages in French, PDF) reversing the Conseil de la concurrence decision that the pharmaceutical company GSK had committed predatory abuse through below-cost pricing of Zinnat (an antibiotic for surgery-induced infections).

The court endorses the Conseil's analysis of costs, including that GSK was not entitled to claim that the high transfer prices paid by its French business to its Swiss business (presumably for tax reasons) were irrelevant to the Akzo cost test.

The basis for the court's reversal of the finding of abuse is that the Conseil had not satisfactorily proved its assertion that below-cost pricing of one drug was part of a GSK strategy to establish a reputation for aggressivity so as to deter future competition in other markets. In reaching this view, the court relies on:

• The fact that other elements (e.g. threats to competitors, an intention to exclude) were present in the Akzo case and nothing similar is alleged here.
• Evidence from GSK that it had faced successful competitors in other markets, against the claim of a reputation for aggressive behaviour.

The matter may be appealed to the French supreme court (Court de cassation).

Comment, 22 April 2008: The Conseil's cost analysis, which survives the appeal court ruling, concluded that prices were below variable costs. The ECJ said at paragraph 71 of Akzo that “prices below average variable costs .... by means of which a dominant undertaking seeks to eliminate a competitor must be regarded as abusive”. I wonder whether the GSK case could have been decided on the basis of that first leg of the Akzo test: condemning the below-cost pricing behaviour simply because its object was to eliminate a competitor. But instead of that, the Conseil decided to launch into a general discussion (paragraphs 256-281 of the decision) on economic theories of predation and the alleged effects of GSK's strategy, drawing parallels with the strategy condemned in the Akzo case. That speculative section of the decision provided ample ammunition for GSK in this appeal. Franck

DG Competition consultation (12 pages, PDF plus 99 pages, PDF and 67 pages, PDF) on proposals to introduce additional procedures for victims of breaches of competition law to obtain compensatory damages.

Proposals for representative actions by “qualified entities” look similar to what is in place in the UK under the Enterprise Act 2002. There would also be an opt-in collective action without the need to involve a representative body.

On passing-on, the paper proposes that:

Defendants should be entitled to invoke the passing-on defence against a claim for compensation of the overcharge. The standard of proof for this defence should be not lower than the standard imposed on the claimant to prove the damage.

Indirect purchasers should be able to rely on the rebuttable presumption that the illegal overcharge was passed on to them in its entirety.

On leniency in cartel cases, the paper proposes that applications for leniency would be privileged, and suggests that the liability of infringers who benefit from leniency might be limited to their own (direct and indirect) customers.

A 671-page report (5.5M PDF) by various academics discusses costs and benefits of various options that had been considered by the Commission.

Accepted proposals would be implemented through a combination of EC directives and EC regulations.

Responses by Tuesday 15 July 2008.

DG Competition notice (about 1 page) that it will conduct an in-depth investigation, including consultation of third parties, before deciding on the compatibility with Article 87 of proposals for the UK government to grant £14 million of aid to Channel 4 “to assist it to meet the capital costs of digital switchover”.

DG Competition notice (about 1 page) that it will conduct an in-depth investigation, including consultation of third parties, before deciding on the compatibility with Article 87 of the UK's measures to restructure Northern Rock.

Advisory opinion (about 17 pages in French) of an advocate-general of the European Court of Justice in a dispute between the pharmaceutical company GSK and parallel traders from Greece. The parallel traders are complaining that GSK limits the quantities that it agrees to sell in Greece in order to prevent parallel trade to other EU countries. The dispute is closely related to the Syfait case in which the European Court declined jurisdiction.

The opinion explores the application of Article 82 to this dispute. It suggests that:

• There are no "per se" abuses under Article 82, even when anti-competitive intent and effect are clear.
• The supply restrictions imposed by GSK in this case are abusive unless objectively justified.
• The opinion considers the various lines of justification put forward by GSK, and rejects them all.

Even if the ECJ follows this advisory opinion, a possibility will remain that GSK might provide better evidence on justification to to the Greek court: the ECJ only provides a preliminary ruling on EC law and does not decide these cases.

Note on ECJ Advocate General opinions

Competition Appeal Tribunal judgment (43 pages, PDF) dismissing Rapture TV's appeal against Ofcom's endorsement of Sky's EPG charges. The matter was argued under the Communications Act 2003 and predecessor "ex ante" regulatory arrangements for EPG services; Rapture does not appear to have alleged that Sky's charges amounted to any infringement of competition law.

Registers of Scotland consultation (11 pages, PDF) on options for changes to its charges for providing information from the Scottish Land Register, Sasine Register, and Chancery and Judicial Registers.

The document floats (without quantification) the idea of a volume discount for frequent users. There is no mention of the Registers' obligations under the Competition Act 1998 or Article 82.

Responses by Friday 18 July 2008.