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 …
The last few days have been whirlwind of bad news and questionable choices. Both major UK political parties are in disarray, and the only forceful political voice with a clear way forward comes from the SNP.
It will be of no surprise to anyone that I supported Remain. My support was with a heavy heart; not because I have less than full support for EU Membership, but because the campaign itself was woeful. There was a failure to make a positive case for EU Membership – no doubt because the Tory leaders of the Remain campaign had taken every opportunity to blame the EU for all the UK’s ills in the decade before the referendum.
We can see now that what Leave dubbed as ‘Project Fear’ is becoming ‘Unfortunate Reality’. The consequences of a political decision to leave the EU will be dwarfed by the consequences should we ever actually do so.
The only chink of light going forwards is that the UK has not yet decided to Leave the EU, never mind the more consequential step of notifying the European Council of its formal intention to do so, thereby triggering the withdrawal process under Art 50 TFEU. As there appears to be no ‘Plan A’ for the UK’s post Brexit engagement with the EU 27 I cannot see how there can be any desire for the UK Govt, who exercise such Prerogative powers, to rush towards triggering Art 50, even if they can come to a decision whose hand should be on the tiller.
I that time I hope there is the opportunity for Parliament to exercise its sovereignty and exercise control on the Govt to avoid any rash steps, driven by the internal division within the Conservative Party, that would put the UK’s trading relationship with the rest of the EU in jeopardy. It is perhaps difficult after the tumult of the last few days to hope that wise heads might prevail, but I still hold that hope.
As to competition law I am more optimistic. In substantive terms I don’t think that there would be desire, even from the most ardent Europhobe, to address the EU’s influence on competition law as one of the 1st pieces of UK reform; there are far more obvious areas where de-regulation might be more appealing. Given the CMAs position in relation to competition policy I also see limited internal push for the UK reforms; although there is perhaps reason to think that the formalistic line taken by the CJEU in relation to Art 102 TFEU, might not be followed so slavishly by the CMA and the UK Court’s if they were freed up from s 60 of the 1998 Act. There are larger questions surrounding the UK’s continued participation in the EU Merger Regulation and within the ECN should the UK leave the EU. While the substantive rules in mergers or antitrust may be very similar in in the UK and EU the loss of effective cooperation between the CMA, DG Comp, and the 27 NCAs will reduce the effectiveness of competition law enforcement across the UK and the EU 27. The loss of the UKs voice in competition policy debates within DG Comp and the ECN could lead towards a more interventionist stance in EU policy; which would , rather ironically, potentially impact on the the activity of significant UK firms in vital EU markets.
I hope the UK will continue to have a good trading and competition law enforcement relationship with the rest of the EU for a long time coming. I’m not ready to file away my copy of the Treaty quite yet.
For a video that explains the impact of Brexit on Competition Law from Oke Odudu, see:
The judgment by the General Court, on 12 June 2104, in the Case T-286/09 Intel (ECLI:EU:T:2014:547) has been one of the most controversial in recent years. It it part of the ongoing debate in EU competition law between those who seek to introduce a ‘more economic’ approach to Art 102 TFEU and break away from the formalism they perceive in the Court’s jurisprudence, and those who see the Court’s existing case law as well grounded and effective, and see the more to a ‘more economic’ approach as being a move towards unnecessary uncertainty.
By Bev Williamson
Premiership Rugby Limited (the PRL) is the company that commercialises premiership rugby union in England. Its CEO, Mark McCafferty, has publicly rejected claims that Premiership operates as a cartel. He relies on the fact that English rugby union utilises a system of promotion and relegation for determining which teams compete amongst the professional elite. That being the case, the PRL, which is made up of representatives of each of the Premiership teams, together with the sport’s governing body, the Rugby Football Union (the RFU), may have found ways to create a cartel by stealth.
Two recent judgments handed down by the CJEU show how difficult it can be for a Member State to involve itself in fixing minimum prices for products. Given the ongoing challenge to minimum alcohol pricing in Scotland it is interesting that in both these cases the Court ruled against the fixing of prices, but for very different reasons. Neither case is directly analogous to the Scots alcohol MUP referred to the Court in Case C-333/14, but there are perhaps lessons that can be learnt.
The mainstream UK news media has today been gleefully reporting the large fines imposed by the Bundeskartellamt in the German Sausage cartel. What struck me as interesting is why that cartel, above so many others has broken out of the financial press and made the headlines?