Competition law fines in 2020 did not reach the billion-dollar heights of earlier years. But the penalties were still huge. We explain what went wrong.
If you're interested in last year's penalties, see Competition Law Fines 2021 or if you would like to view the latest fines, see Competition Law Fines 2022.
In January 2020, the French competition watchdog fined Google $150m for abusing its dominant position in the online search advertising market.
It criticised the tech giant for its "brutal and unjustified" suspension of accounts, "opaque and difficult to understand operating rules" relating to Google Ads and for applying them in "an unfair and random manner" after complaints by firms that had their accounts suspended without warning.
Google planned to appeal, insisting that "People expect to be protected from exploitative and abusive ads, and this is what our advertising policies are for".
But, while agreeing that customer protection is "perfectly legitimate", the watchdog cautioned, "Google cannot suspend the account of an advertiser on the grounds that it would offer services that it considers contrary to the interests of the consumer while agreeing to reference and accompany on its advertising platform sites that sell similar services".
Google previously received a €1.5bn EU competition fine in March 2019.
The European Commission fined Cephalon and Teva, two pharmaceutical giants, a total of €60.5 million for their agreement to delay for several years the market entry of a generic version of Modafinil, Cephalon's drug for sleep disorders, after Cephalon's original patents had expired.
Interestingly, this agreement had been concluded well before Cephalon became one of Teva's subsidiaries. Such an agreement is in direct violation of EU competition law and has caused substantial harm to EU patients and healthcare systems by keeping Modafinil prices artificially high.
Executive Vice-President Margrethe Vestager, head of competition policy, said that "It is illegal if pharmaceutical companies agree to buy-off competition and keep cheaper medicines out of the market. Even when their agreements are in the form of patent settlements or other seemingly normal commercial transactions. Teva's and Cephalon's pay-for-delay agreement harmed patients and national health systems, depriving them of more affordable medicines."
The Competition and Markets Authority (CMA) fined Compare the Market £17.9 million after discovering that certain clauses in company contracts with home insurers breached UK competition law. The CMA investigation concluded that Compare the Market was in breach of competition law over a period of two years by imposing wide 'most favoured nation' clauses on home insurance providers making sales through its platform.
These clauses effectively prohibited home insurers from lowering their prices on other platforms. Additionally, these restrictions made it more difficult for Compare the Market’s competitors to grow and challenge the company's dominant market position as other price comparison websites were effectively rendered unable to beat it on price.
Consequently, competition among price comparison websites and competition among home insurers selling such platforms was limited. The CMA ruled that this is likely to have resulted in increased insurance premiums.
Drug company Apotex has admitted price-fixing and agreed to pay $24.1 million following a Department of Justice (DoJ) investigation.
The US regulator said Apotex fixed the price of Pravastatin, a generic cholesterol medication, between May 2013 and December 2015 and worked with others to keep the drug's price artificially high.
As part of the agreement, it has also agreed to "cooperate fully" with the DoJ's ongoing antitrust investigations into some of the generics market leaders. The regulator has already reached agreements with Heritage Pharmaceuticals, Rising Pharmaceuticals and a former Novartis executive.
The European Commission has fined NBCUniversal and other Comcast companies €14.3 million for illegally restricting traders from selling licensed merchandise within the EEA beyond those customers and territories allocated to them.
The investigation found, for example, that a department store in Spain couldn't sell ET pyjamas from a Belgian manufacturer because that manufacturer was banned from selling into Spain.
The restrictions affected hundreds of merchandising products from Minion school bags to Shrek mugs, Jurassic Park toys and sweets, beginning in 2013 when NBCUniversal ramped up its licensing activities in Europe. It abruptly ended in September 2019 when, faced with the EC's investigation, it informed all its European licensees that the anti-competitive restrictions ceased to apply.
Since May 2017, firms including Guess, Nike and Sanrio have been fined €187 million for imposing similar cross-border trade barriers.
Car part suppliers Kiekert and Brose have been fined a total of €18m by the European Commission for their involvement in two cartels concerning the supply of closure systems for vehicles in the European Economic Area. A third firm, Magna, was also involved but was spared a fine as they were the ones who revealed the cartels to the EC.
Magna, based in Canada, and Kiekert, based in Germany, took part in a bilateral cartel concerning the supply of strikers and latches to the Daimler group and BMW group. At the same time, Magna was part of a separate cartel with the German firm Brose, which concerned the supply of window regulators and door modules for a car model owned by the Daimler group. All three firms owned up to being part of the respective cartels and agreed to settle the case.
The EC's executive vice-president, Margrethe Vestager, said, "Components such as door modules, window regulators and latching systems are essential for the proper functioning of cars. They provide protection against injury and ensure safety and comfort. The three suppliers colluded to increase their profits from the sale of these components. These cartels ultimately hurt European consumers and adversely impacted the competitiveness of the European automotive sector."
The latest musical instrument firms to get into trouble with the Competition and Markets Authority (CMA) are the industry giants Roland and Korg, who have just been fined a combined total of £5.5 million for online price-fixing.
A CMA investigation found that both firms had breached competition law by restricting online discounts, in a practice known as 'resale price maintenance'. As a result, Korg was fined £1.5 million, while Roland was given a £4 million penalty.
CMA research revealed that more than 40% of musical instrument sales take place online, "so it’s important that manufacturers and retailers do not illegally work together to keep prices high."
From Jimi Hendrix and Eric Clapton. To Taylor Swift, Nile Rodgers and Oasis' Noel Gallagher. Fender is the guitar of choice for some of the world's most famous musicians, with limited edition models costing around £45,000.
But, the firm found itself in a "jam" of a different kind. The UK arm of the legendary guitar manufacturer Fender Europe was fined £4.5m by the UK's Competition and Markets Authority for illegal price-fixing.
Between 2013 and 2018, Fender prevented online discounting of its guitars - meaning customers who shopped around online to find the best deal struggled as prices were roughly the same.
In addition:
Andrea Coscelli, the CMA's chief executive, said, "Quite simply, this behaviour is against the law. The fact the CMA has imposed large fines on major musical instrument firms Casio and Fender in a matter of months should be a lesson to this industry and any other company considering illegal behaviour."
It was one of the largest fines ever imposed for resale price maintenance (RPM) and would have been £14.2 million had the firm not admitted the offence under the CMA's leniency rules.
Four drugs companies were fined over £3.4m for breaching competition law.
King and Auden Mckenzie agreed that one of them would only supply 10mg tablets of the anti-depressant nortriptyline, while the other would only supply it in 25mg tablets. They also fixed quantities and prices. Accord-UK Ltd took control of Auden Mckenzie's Nortriptyline business, so they were held responsible for its illegal conduct. The CMA fined Accord-UK Ltd £1.9m and King £76k for market sharing.
King, Alissa and Lexon also exchanged competitively sensitive information on prices, volumes and entry plans to keep the drug's price artificially high. The three firms were fined £76k, £175k and £1.2m, respectively.
Geoff Steadman of the CMA said, "If pharmaceutical companies get together to restrict competition for the supply of a drug, this can lead to the NHS - and ultimately the UK taxpayer - paying over the odds for what are often essential medical treatments".
King and Auden Mckenzie also agreed to pay £1m to the NHS in connection with the case. It was the second time the CMA has secured such a payout.
Check out the latest CMA guidance - some of the rules on coordinated action were relaxed during the pandemic, but others most definitely have not.
If you have anti-competitive concerns, report them to the UK's CMA cartel hotlines.
For confidential guidance, if you have been directly involved in anti-competitive behaviour, you can call +44 (0)20 3738 6833.
If you've seen price-fixing take place, you can report it on +44 (0)20 3738 6888.
Remember, if you speak up first, you may avoid sanctions.
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