October 8, 2015

European Parliament Adopts Revised Directive On Payment Services (PSD2)

A View from Constantine Cannon’s London Office

By James Ashe-Taylor and Yulia Tosheva

The European Parliament formally adopted the revised Directive on Payment Services (PSD2) today.

The new law, proposed by the European Commission in July 2013, aims to enhance consumer protection, innovation and security of payment services.  Among the key changes introduced by the new rules are the following:

Introduction of strict security requirements for the initiation and processing of electronic payments and the protection of consumers’ financial data.

Opening the European Union payment market for companies offering innovative payment services based on access to payment accounts – the so-called “payment initiation services providers” and “account information services providers.”

Enhancing consumers’ rights in numerous areas, including reducing the liability for non-authorised payments and introducing an unconditional (“no questions asked”) refund right for direct debits in euros.

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Categories: Antitrust Legislation, International Competition Issues

    March 26, 2015

    UK Passes Consumer Rights Bill Introducing Opt-Out Antitrust Class Actions

    A View from Constantine Cannon’s London Office

    By Richard Pike

    The United Kingdom announced today that the Consumer Rights Bill has passed its final legislative hurdle and has been adopted as the Consumer Rights Act 2015 – heralding a major overhaul of consumer protection law in the UK.

    Schedule 8 of the Act contains radical new provisions designed to boost private antitrust enforcement in the UK.  Most noteworthy is the adoption of an opt-out class action remedy specifically, and uniquely, for claims alleging infringement of UK and European competition law.  Never before has there been any form of opt-out action in the UK for any purpose.

    The class action provisions are intended to strike a balance between enhancing access to justice and avoiding the creation of what has been termed an “American litigation culture.”  As such, there are a number of limits on what will be possible.  First, the opt-out class will be limited to persons domiciled in the UK.  All other persons would have to opt in to obtain the benefit of actions that are brought, or else bring their own claims.  Second, contingency fees will be prohibited, and it is likely that the arrangements for fees and funding will effectively be set by the Competition Appeal Tribunal at the outset.  Third, it will be for the Tribunal to decide in each case whether it is appropriate to allow the case to proceed on an opt-out basis, an opt-in basis or not as a collective action at all.  The Tribunal will also be tasked with deciding whether the lead plaintiff is an appropriate person to represent the class.

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    Categories: Antitrust Legislation, International Competition Issues

      January 7, 2015

      European Commission Announces Agreement To Cap Interchange Fees For Card-Based Payments

      A View from Constantine Cannon’s London Office

      By Yulia Tosheva and James Ashe-Taylor

      The European Commission has announced that the European Parliament and the European Council have reached a long-awaited political agreement on the Commission’s proposal for a Regulation on Interchange Fees for Card-based Payment Transactions.

      The Regulation will introduce maximum fees for four-party card schemes’ consumer debit and credit cards, prevent card schemes from forcing retailers to accept all types of cards regardless of their fees, and establish transparency rules for all transactions. The Commission has already ruled that interchange fees set by MasterCard are in violation of EU antitrust laws and, after a seven-year court battle, MasterCard lost its final appeal before the European Court of Justice in September 2014.

      Interchange fees represent about 70% of the approximately 13 billion euros a year retailers pay banks to handle payment card transactions. The Regulation is expected to have a profound impact on the card industry as a whole but its effect is likely to be particularly felt in markets such as Germany, where average credit card rates stand at 1.8%, and Poland, where average debit card charges are 1.6%.

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      Categories: Antitrust and Price Fixing, Antitrust Enforcement, Antitrust Legislation, Antitrust Litigation, International Competition Issues

        February 10, 2014

        Umbrella Liability For Price Fixing: Does The Forecast Call For More Damages In The EU And U.S.?

        A View from Constantine Cannon’s London Office

        By Irene Fraile and Ankur Kapoor

        The European Union may be on the verge of embracing “umbrella liability”—a theory of liability that would significantly increase the exposure of members of anticompetitive cartels.

        The European Court of Justice is being urged by one of its advocates general to hold that, under EU law, victims of cartels can seek damages from cartel members for higher prices paid to non-cartel members that were able to raise their prices under the pricing “umbrella” created by the cartel. If the Court of Justice endorses such umbrella liability, antitrust liability in the EU could diverge from the approach evolving in U.S. courts which have been reluctant to embrace umbrella liability. click here for more »

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        Categories: Antitrust Enforcement, Antitrust Law and Monopolies, Antitrust Legislation, Antitrust Litigation, Antitrust Policy, International Competition Issues

          December 5, 2013

          Europeans Evolving Toward More Plaintiff-Friendly Private Damages Action Rules

           A View from Constantine Cannon’s London Office

          By James Ashe-Taylor and Julia Schaefer

          The governing institutions of the European Union are moving ahead with proposals that could enable consumers and businesses victimized by antitrust violations to have a better chance at recovering damages from cartel members.

          Earlier this week, ministers from all 28 member states of the EU agreed at a meeting of the Council of the European Union to push ahead with a legislative proposal which seeks to facilitate damages claims by victims of antitrust violations and to allow them to receive full compensation.  Competition Commissioner Joaquín Almunia has called this effort a “milestone in the evolution of competition law enforcement in the EU.”

          The European Commission (the EU’s executive arm) published the legislative proposal to revise rules governing antitrust damages actions under member states’ national law on June 11, 2013.  The Council (one of the EU’s two legislative bodies) has now authorized its Presidency to start negotiations with the European Parliament (the other legislative body) to agree to revisions in the legislative proposal.

          The legislative proposals are designed to remedy defects in private enforcement, an area which Mr. Almunia described as “ineffective” and “uneven.”  Currently, victims of antitrust violations face high procedural hurdles in seeking relief, particularly under national discovery rules.  These often require a detailed description of specific relevant documents before discovery is permitted, an evidentiary obstacle few victims are able to overcome.

          Similarly, the discoverability of leniency documents is often uncertain and determined only on a case-by-case basis.  The EU proposals aim to clarify this area of law, in order to give greater protection and certainty to whistleblowers, while at the same time upholding victims’ ability to access all relevant information.

          The divergent rules and procedures across the EU member states have encouraged forum shopping for the courts with the most plaintiff-friendly procedural rules.  This has meant that the vast majority of damages actions have been brought in the British, Dutch and German courts.  The Commission considers this to be contrary to the single market principle.  It has also pointed out that forum shopping is a luxury available only to large corporations.

          According to Mr. Almunia, the new proposals are about making recovery of compensation by ordinary European citizens and small businesses a reality.

          The proposals would also preserve the competition authorities’ power to punish and deter anticompetitive practices.

          The EU’s enforcement of its competition laws remains a priority.  As discussed on this blog yesterday, the EU has just imposed a new record level of fines against global banks in the Libor and Euribor benchmark manipulation investigations.

          While the legislative proposals would bring European private antitrust damages actions a few steps closer to the American model, they would not make the full leap.  Unlike in the U.S., where victims of antitrust violations are able to seek triple damages from cartelists as a deterrent, the EU’s proposals are aimed only at compensating for the harm suffered.  Punishment, according to the Commission, should remain the exclusive realm of the competition authorities.  Moreover, the EU currently does not have a class action regime, which would facilitate damages actions by consumers and small businesses.  But on June 11, 2013 the Commission adopted a set of common non-binding principles for collective redress mechanisms in member states, which recommend limited opt-in class action-style laws.

          The adoption of a “common approach” by the Council is a positive step toward finalizing the legislative proposal before May 2014, when new elections are held for the European Parliament.  Under the EU’s “ordinary legislative procedure,” the Council will have to reach agreement with the Parliament on the Commission’s proposed legislation.  However, disagreement remains on key aspects of the proposals, such as discovery rules and protection for whistleblowers.  In addition, political conflicts in the Parliament have led to a month-long postponement of the first reading of the proposal until January of next year.

          Despite these roadblocks, there is strong pressure within the Parliament and the Council to complete the legislative passage of this directive before April.  Once adopted, the member states would have two years in which to implement the directive into national law.

          Additional information about bringing private actions for antitrust damages in the EU can be obtained by contacting James Ashe-Taylor or Julia Schaefer in Constantine Cannon’s London office.  

          Edited by Gary J. Malone

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          Categories: Antitrust Legislation, International Competition Issues

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