What's it all about?
How much is too much? A call for global principles to guide to the punishment of international cartels
25 June 2013
2 April 2014
7 May 2013
5 March 2014
12 December 2013
Competition law aims to ensure that consumers of goods and services have unfettered choice and that suppliers do not overcharge.
Competition (or ‘antitrust’) lawyers advise on a range of matters, including compliance with EU and UK/other national competition laws and state aid rules. Competition lawyers are commonly asked for advice as to whether an M&A transaction may require merger control approvals from any competition authorities.
Competition specialists may also advise on, for example, legal issues arising from participating in an illegal cartel (ie where suppliers/ manufacturers agree certain things so as to limit supplies or competition) and antitrust-related litigation (which can arise where customers suffering damage due to a cartel bring a claim against the cartel participants). As an example, in 2007 British Airways (BA) was fined £121.5m by the UK’s Office of Fair Trading (OFT) and $300m (£148m) by the US Department of Justice for participating in a cartel to fix fuel surcharges charged to long-haul airline passengers. Two years later, cut-flower importers brought a representative damages claim against BA, alleging that they had paid inflated airfreight charges because of the price-fixing cartel.
The working culture
Like any area of law with a transactional element, the pace of life in a competition department varies. While the tempo can often be slower than in, say, a corporate or banking group, colleagues may ask for advice at a moment’s notice on the likelihood of competition authorities blocking a potential merger. Clients also often request urgent advice on cartel-related issues, especially if they have been or are the subject of a dawn raid (an unannounced visit from representatives of a competition authority). The timelines involved with regulatory investigations, which can last for months (or even years), may be somewhat more predictable.
Trainees often undertake research tasks, typically into a particular legal topic, a market that is potentially relevant to a matter or a particular jurisdiction’s merger control rules. Trainees commonly gain drafting experience by, for example, summarising recent developments in a sector relevant to a particular client. A junior competition lawyer should get a reasonable amount of responsibility. A typical day might be spent drafting a form to notify a potential transaction to the European Commission. You could find yourself attending a dawn raid, tracking competition authority representatives as they investigate a client’s records. Like trainees, junior competition lawyers spend a lot of time researching aspects such as the market share(s) a company may have in a particular segment or territory.
The workload can be varied. Competition is a dynamic area of law with fairly high media interest, which has grown with the number and scope of regulatory investigations. Working in competition law often entails understanding clients’ businesses very closely. For example, lawyers advising on Game Group’s acquisition of Gamestation (cleared by the Competition Commission in 2008) needed to understand PC and video games and how they are sold in the UK. A typical competition lawyer can therefore expect to gain quickly an overview of how various sectors operate.
Another attractive aspect of competition law is its perceived international transferability, especially within Europe, where many national competition regimes closely mirror the rules and concepts contained in EU competition law. Broadly speaking, competition regimes across the world are beginning to converge; learning one country’s substantive competition law can thus provide a good base for working in another.
Competition authorities are launching more investigations into specific markets and sectors where competition does not appear to function as well as it could do. During a couple of months of unprecedented activity in 2008 alone, the OFT launched investigations into alleged unlawful practices concerning the UK retail prices for tobacco products and, reportedly, a wide range of groceries, health and beauty and detergents products.
A competition lawyer will need to maintain an up-to-date knowledge of the competition regimes in at least the UK and the EU. Commercial awareness and/or industry-specific knowledge will help you to understand how competition works within given sectors.
Project management skills may prove handy, especially, for example, in the context of obtaining merger clearances or regulatory investigations, where statutory timetables may apply. Competition lawyers may also need to coordinate local counsel where an international transaction - such as the acquisition by InBev of Anheuser-Busch - requires approvals from authorities in several different jurisdictions.
You should have also some interest in economics. Competition lawyers are often required to evaluate the impact of a merger or takeover on a company’s market share; an understanding of economic theory helps you to analyse any given sector’s competitive dynamics.
Foreign languages are by no means a prerequisite, but can make the job easier by facilitating, for example, research into precedents across Europe and communication with counsel in other jurisdictions.
Simon Deeble, associate, Clifford Chance