June, 2010

Opportunity to improve draft EU Horizontal Agreements Guidelines, says The Cooperatition Incubator

June 25th, 2010

The Cooperatition Incubator has set out five recommendations for improvements to the draft EU Horizontal Agreements Guidelines 2010 in a response to the European Commission consultation.

We welcome the draft EU Horizontal Agreements Guidelines 2010, which is much clearer than the 2001 guidance.  Our response focuses on the “standardisation agreements” guidance (pgs 66-82) and concludes with five recommendations:

1)      The need to include a worked example around a supply chain social voluntary standard, perhaps labour-related, where additional employment costs are passed on to the consumer;

2)      The need to include additional, contrasting, worked environmental examples where increased production costs to deliver qualitative benefits may be passed on to the end consumer;

3)      The need to include best practice guidance and/or examples on what parties to discussions around a potential voluntary agreement should consider “general and aggregated” versus “specific or sensitive” information;

4)      The need to include information on where in EU nations’ competition authorities groups of companies seeking to form voluntary agreements can get advice, such as the unit responsible for ‘Short-form Opinions’ in the UK OFT;

5)      Consideration needs to be given to how the European Commission encourages national competition authorities (and departments for business) to issue guidance that compliments, rather than undermines EU guidance.

The International Chamber of Commerce (ICC) Commission on Competition have raised many similar points to The Cooperatition Incubator in their submission to the EU.

Our submission is also published on the European Commission website.

The Cooperatition Incubator welcomes new OFT Short-form opinions process

June 24th, 2010

The Cooperatition Incubator has today welcomed the UK Office of Fair Trading’s (OFT) announcement that it is establishing a ‘Short-form Opinions’ process.  The first Short-form opinion was issued (27 April 2010) on questions raised by Makro Self-Service Wholesalers Limited and Palmer & Harvey McLane Limited in relation to their proposed joint purchasing co-operation agreement.

In March 2010 Philip Collin, Chairman of the UK Office of Fair Trading announced that the OFT will offer ‘Short-form Opinions’ (SFO). Introducing the new process the OFT acknowledged:

“Concerns have been expressed that uncertainty about how competition law in particular might be applied has led to some forms of potentially beneficial collaborative work between businesses not going ahead. In some cases, it may not be clear how the competition rules may be applied to collaborative conduct, for example with regard to some government-led initiatives.

“As a result, we are proposing to trial a ‘short-form’ opinion procedure. This would allow us, in a limited number of cases, to provide prompt guidance where there is a novel or unresolved issue of wider interest arising in the context of a specific prospective collaborative initiative. We would like to hear from you and your members about issues that you or they think would benefit from clarification through means of such a ‘short-form’ opinion.”

In April 2010 – when they published their first SFO – the UK Office of Fair Trading added:

“Under the Short-form Opinion process the OFT aims to provide guidance, within a prompt timetable, to businesses seeking clarity on how the law applies to prospective collaboration agreements between competitors which raise novel or unresolved competition issues….

“During its analysis, the OFT identified a concern that certain exchanges of information between the firms could potentially lead to a reduction in competition. However following OFT advice, the parties have agreed to ensure the data they supply to each other is general and aggregated, preventing either company from extrapolating specific or sensitive information.

“The new process is being trialled in response to feedback from business that some potentially beneficial collaboration between companies is not proceeding due to concerns about infringing competition law, which carries civil and in some circumstances criminal sanctions.”

Andrew Dakers commented:

“The OFT’s Short-form Opinions process represents a significant step towards addressing the concerns that we have been raising over the past few years that companies are not engaging in collaborative agreements that would deliver public benefit, due to competition law risks.  This new process will help companies mitigate the risks and is a key milestone in our push for a co-regulating, responsible economy.”

“The OFT and Department for Business, Innovation and Skills (BIS) must now set out how the benefits of this change can be independently assessed; how the new process can be communicated across the business community; the extent to which it will enable voluntary horizontal agreements that pass price increases onto the consumer, whilst delivering social/ environmental benefits; and whether there is the necessary capacity in the OFT for resource constraints to not be a barrier to the issuing Short-form opinions.”

Details of the OFT’s new approach can be found here:

DEFRA to develop waste ‘responsibility deals’, says Spellman

June 15th, 2010

Announcing the Coalition Government’s commitment to establishing ‘Responsibility Deals’, Caroline Spelman said in speech at Futuresource, ‘Waste – new thinking for a new economy’ that a Waste Review would look at “new approaches to dealing with commercial waste and promoting ‘responsibility deals’, reducing the amount of waste generated by production and retail.”

Spellman went on to say:

“I want business and manufacturers to redouble their efforts to drive down the waste generated by production and the amount of packaging they use – some of which is, if we’re honest, actually marketing material. Because, as with so much else when it comes to waste, doing the right thing makes sound economic sense.

“Major retailers now report on their environmental performance to consumers and investors alike. Posters on the tube trumpet light-weight beer bottles. Utility companies use energy efficiency to sell their services.

“And, at a time when consumers are tightening their purse strings and investors are erring on the side of caution, what savvy business wouldn’t choose to save money while enhancing their corporate reputation?

“Businesses – inevitably – produce more waste than households.

“For too long, Government attention has been focussed on domestic waste, rather than giving businesses the encouragement they need. Not by tying you up in red tape or by stifling you with regulation. But by supporting you in ways that protects the environment and consumers while encouraging action.

“Using the idea of Responsibility Deals, for example, we will work together with retailers and the business community to continue to drive down food waste and unnecessary packaging.

“You have our support when it comes to both reducing the amount of waste you produce and in ensuring you have the facilities and opportunities to recycle what’s left.

“For decisions to work, they need to be taken as close as possible to the people and businesses involved.

“Some of our waste and resource policies of course, have to be decided at a national, European and even a global level.

“My Ministerial team and I, including the tireless Oliver Henley, who leads for us on waste and has been visiting exhibitors this morning – will be active at every level.”

This message was repeated as the Waste Review was launched on 29 July: “How voluntary ‘Responsibility Deals’ with businesses can play a role in waste reduction and more efficient use of resources”

‘The Cooperatition Incubator’ will be providing feedback to the review from a competition law perspective, and you can send in your own comments.