The Uber judgment from the UK ET, which was released, this afternoon is the first stage in what will no doubt become and important litigation for the future of the ‘gig economy’ in the UK. Employment lawyers will be the first to feel its impact (if my colleagues schedule of hastily arranged press interviews is anything to go by) but if this interpretation of the arrangement between Uber and its drivers stands in the UK it will also have an impact on competition law.
The first impressions of the judgment. on twitter at least, suggest that when a driver has the app switched on and they are accepting rides they are ‘workers’ for the purposes of UK employment law. This is controversial as Uber have always argued that the drivers are self-employed independent contractors and do not have a ‘worker’ relationship with the firm. If they are workers it will caused issues for Uber as workers have certain rights, for instance in relation to minimum wage and holiday pay, which Uber must ensure.
The finding of worker status for Uber drivers has an interesting positive for Uber outside the employment context. It protects Uber from a raft of potentially difficult competition law issues. The biggest ‘win’ for Uber in this regard is that the difficult question of how it is lawful for the Uber app to fix prices for ‘independent contractors’ is avoided. As the Uber drivers are now workers any agreement/arrangement they have with Uber on pricing takes place within an undertaking and competition law scrutiny under ART 101 TFEU, or its domestic equivalent, is no longer relevant.If Uber drivers were independent Uber would have had to make a difficult Art 101(3) argument that the common pricing structure, essentially a hub-and-spoke cartel of sorts, was a necessary part of its business model, and even with such a hard-core competition restriction the agreement worked to the benefit of consumers. It is not impossible to contemplate such an argument, but it would not have been any easy task.
Given that this is only an ET judgment there is still plenty to play for, as it is bound to go to appeal. The only certainty is that if the employment lawyers don’t get Uber, the competition lawyers will …
Case C-345/14 Maxima Latvija (ECLI:EU:C:2015:784)
The Court of Justice of the EU has once again handed down a judgment which discusses ‘object’ agreements under Art 101(1) TFEU in Case C-345/14 Maxima Latvija. It adds a little clarity to some of the potential confusion that comes from different forms of wording in previous judgments such as Allianz Hungária and Cartes Bancaires. Read More…
There is currently an ongoing dispute between academic staff and employers in the UK pre-92 Universities regarding the running of the USS pension scheme. I don’t want to get into the debate surrounding the reasons for the dispute, but an interesting competition law question has arisen regarding several UK Universities’ near identical responses to the fact the trade union that represents academic staff, the UCU, have announced a collective marking boycott as part of industrial action protesting at proposed changes to the pension scheme.
Case C-67/13 P Groupement des Cartes Bancaires (CB) ECLI:EU:C:2014:2204
It’s not often that the Court of Justice gets to address one of the core concepts that underlie the antitrust prohibitions, but in Groupement des Cartes Bancaires the CJEU has taken its second opportunity to discuss the nature of Art 101 TFEU ‘object’ agreements in as many years. At the end of 2012, in Expedia, the Court discussed whether an ‘object’ agreement needed to have an ‘appreciable’ effect on competition. In Groupement des CB the CJEU gets to the heart of what it is that makes an agreement fall within the ‘object box’.
What is the impact of the ‘legal advice’ defence to the cartel offence in s 188B(3) of the 2002 Act? Could it make it easy to escape prosecution?
This week I delivered my UG competition law lecture on Cartels. It’s an occasion I always enjoy and gives me an opportunity to approach the topic afresh on an annual basis [the feedback I receive is always extremely helpful too]. This year it was the first time that I had the opportunity to talk through the new defences to the UK cartel offence since the controversial ‘dishonesty’ element was removed by the Enterprise and Regulatory Reform Act 2013. I have described one of the new defences inserted into the Enterprise Act 2002, the ‘legal advice’ defence in s 188B(3), as ‘bizarre’ in the new edition of our textbook, but in this post I want to set out what I perceive the problems to be. I want to develop these ideas into a longer piece, but for now I want to pose some of the questions I think need answering. My fear is that the ‘legal advice’ defence could become a get out of jail free card rendering the UK cartel a dead letter in all but the most extreme cases. Read More…
The announcement that Microsoft are to drop the controversial Xbox One DRM policies that would restrict the renting, sharing or selling-on of Xbox One games, which I blogged about a few days ago, has been met with joy by many gamers. For those gamers with an interest in the legal issues in videogames the announcement was tinged with a little disappointment. We now won’t have a chance to have lots of interesting interesting legal questions discussed in the terms of a popular mass market product.
It was reported on the 5th April that Northern Circuit barristers had voted to reject the planned QASA scheme of ‘Quality Assurance’ for advocates. That in itself is interesting but my ‘competition-dar’ was triggered by a second vote the Northern Circuit also took. Quoting from the Law Society Gazette:
‘all 460 barristers who took part voted to refuse to accept instructions on the Western and Midlands circuits if the barristers on those circuits refused to join the scheme’.
To them this must have seem like an act of solidarity and direct/industrial action to support their colleagues in other circuits and bolster support for their campaign against the imposition of QASA. However …
To a competition lawyer that action looks rather different. Is this a groups of independent economically active undertakings (practicing self-employed barristers) getting together and agreeing a market sharing or collective boycott scheme; by refusing to take work from a defined geographical area to support another group of undertakings? An agreement not to compete in a market and leave work to another in return for some benefit from them (or alternately the threat of taking work unless they act in a proscribed fashion) is mutually beneficial market sharing (or a collective boycott).
That looks to me as if it would be an agreement between undertakings, or a decision of an association of undertakings, fulfilling the terms of Art 101 TFEU or, as if may not effect trade between EU Member States, section 2 of the Competition Act 1998. That would make it unlawful and automatically void, and could, if investigated by the OFT, result in hefty fines being imposed.
A more extreme view could even see this as falling under s 188 of the Enterprise Act 2002. If the actions of the Northern Circuit were seen as being individuals ‘dishonestly agreeing’ to ‘make or implement’ and agreement to ‘divide between A and B customers for the supply in the United Kingdom of a product or service’, they may be committing a criminal offence under ss 188. If convicted sentences of imprisonment up to 5 years are available.
I’m not suggesting that arrests or OFT dawn raids can be expected across northern chambers. But perhaps the bar might want to think more careful about how they conduct their campaign. They might not benefit from the traditional limitations on the application of the competition rules to collective action taken by trade unions.
There might not be a lot of competition law work on the Northern Circuit but someone might want to dust off a competition law textbook before they take their next move. I can suggest a good one …
In October 2012 Christopher Brown posted an interesting blog on AG Kokott’s opinion in Case C-226/11 Expedia. The full judgment was delivered on 13 December 2012 and it seems appropriate to look at whether the Court followed the same line; or whether there was an ‘appreciable’ difference.
The Court of Justice, on 6 December 2012, delivered an interesting judgment examining the legal liability for a ‘bit player’ in a large cartel. The question whether a peripheral member of a cartel can be held liable for the whole infringement raises a number of questions of fairness, but there is no doubt that the Commission finds the ‘single continuing infringement’ concept important in making its investigations into on-going cartel activity much easier. It also reminds me of the well know aphorism, ‘you can’t be a little bit pregnant’.