2. Competition law and its application in the UK Nicholas French Partner, Freshfields Bruckhaus Deringer LLP Beijing,16 September 2009 To insert other ready-formatted pages: go to the insert menu/slides from files/ select ‘on-screen inserts.ppt’ Click the display button, then click the button on the right (marked with red below). Click on the slide(s) to insert then insert and close.

3. Scope of today’s brief presentation  Overview of UK competition law framework  Key features of “follow-on” damages in England

4. UK competition law - legal framework

5. The UK legal framework mirrors Articles 81 and 82 of the EC Treaty Competition Act 1998, Chapter I Competition Act 1998, Chapter II Focus Basic structure Non- exhaustive list of examples Bi/multilateral action Generally unilateral action Prohibits anticompetitive agreements Exception where benefits of the agreement outweigh anti- competitive consequences Prohibits the abuse of a dominant position No exemption (subject to objective justification) Price fixing Market sharing Customer allocation Exclusive purchasing/supply Exchanges of sensitive information between competitors Exclusionary conduct Predatory pricing Refusal to supply Exploitative conduct Excessive pricing Discriminatory pricing

6. Possible sanctions for breaching UK competition law Corporate Fines EU & UKUp to 10% of group worldwide sales Damages EU & UKPossible “follow-on” damages actions by parties suffering loss as a result of breach of UK/EU competition laws Personal Sanctions UK (and other national laws) Unlimited fines possible; up to 5 years in prison (cartel); disqualification as director Void UK (and other national laws) Infringing clauses of agreements (and possibly the whole contract) void and unenforceable Directions EU & UKBehavioural restrictions limiting future conduct of business

7. UK competition law enforcement  Mostly public enforcement  But private enforcement in the UK courts is becoming more common  “Follow-on” damages actions  “Stand-alone” damages actions  Other actions

8. Competition litigation in the UK Courts “Follow-on” (Cartel) “Follow-on” (Non-cartel) Stand-alone  Vitamins (4 separate sets of proceedings)  Methionine  BR and ESBR  Paraffin wax  Graphite and carbon products  Football shirts  Liner conferences  Rail freight  Impulse ice cream  Healthcare at home  Impulse ice cream  Tied pubs  LSE/Plus  Air freight

9. UK competition law - key features of the “follow-on” damages regime in England

10. “Follow-on” actions  Claim follows an OFT or EC Commission decision  No need for claimant to establish infringement – must only establish, on a balance of probabilities, that:  the infringement caused the loss; and  the loss was not too remote, speculative or inconsequential to be recovered  Any party suffering damage – including direct purchasers, indirect purchasers and competitors – may commence an action  UK regarded as a relatively claimant-friendly European jurisdiction for competition litigation

11. The UK is a claimant-friendly jurisdiction  Expansive approach to jurisdiction - Provimi  Contribution cases can be brought to share liability amongst cartelists  Extensive disclosure  Pre-trial access to many documents  Evidence  Pre-trial exchange of witness statements and expert reports  Costs  “Loser pays” rule applies

12. A choice of forum is available  Competition Appeal Tribunal (CAT)  Specialist competition law tribunal  For “follow-on” claims, which require a prior infringement decision by either the OFT (or sector regulators), EC Commission or CAT  For damages only  High Court  Non-specialist tribunal  For “follow-on” and other claims  No limitation on remedies

13. Remedies - damages  Limited to compensatory damages  Counterfactual analysis – compares claimant’s actual position to the situation the claimant would have been in “but for” the illegal conduct  Actual price minus “but for” price = overcharge = damages  No exemplary or restitutionary damages available - Devenish  Interim awards of damages available - Genzyme  Interest – discretionary, although generally awarded  No damages awards to date in the UK  Many cases have settled

14. Potential for collective actions?  Competition Act 1998 allows representative actions to be brought on behalf of consumers  Only one representative action in the CAT so far (opt-in) – JJB Sports – case settled  Studies and recommendations made by OFT and Civil Justice Council  Lobbying for opt-out representative actions

15. © Freshfields Bruckhaus Deringer LLP 2009 This material is for general information only and is not intended to provide legal advice.