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 next CLaSF workshop on ‘Competition Law and Enforcement Priorities’ will be held in association with UCD Sutherland School of Law, Dublin on Friday 16 September 2016.
The full programme for the Workshop can be seen on the CLaSF website. One of the highlights will be a keynote speech from Professor William E. Kovacic, George Washington University Law School.
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:
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…
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.
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.
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.
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’.
I’m reading Daniel Sokol’s ‘Policing the Firm’ (2013) 89 Notre Dame LR 785, and I’m finding his discussion of the role of ‘stigma’ in cartel enforcement interesting.
It’s led me to think about compliance programmes. If firms want to be given credit for having an ‘effective’ compliance programme could the CMA/DG Comp insist that within that programme there are real sanctions in discipline, demotion, or dismissal for all officers or employees who were engaged in cartel activity?
Would that make a scheme a more effective part of creating the right corporate compliance culture?
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…