The issue – digital markets require swift enforcement
The Government accepts that swift enforcement is critical in fast-moving digital markets. Without it smaller players are pushed out quickly, market concentration rises and innovation and entry are more difficult. Markets then don’t work well for consumers because prices rise and quality suffers.
The EU, USA, Australian and UK Governments all recognise something must be done. New laws have been passed or are being prepared. All of which contemplate “ex-ante” enforcement. However, how will law enforcement work “more swiftly” than at present?
Current administrative and court systems
Swift interlocutory injunctions can and are typically available in a matter of days from the High Court or other similar Courts elsewhere. There are three basic guidelines used by the courts when assessing whether an interim order will be issued:
- Is there a serious issue to be tried?
- Are damages likely to be an adequate remedy for the claimant or (via the cross-undertaking in damages) for the respondent?
- If so, what is the balance of convenience?
In both private actions and administrative competition cases, actionable harm has to be identified, causation proved, and evidence adduced showing dominance. In private actions this all has to be obtained by claimants who are required to prove their cases. There are two main issues here for private litigants:
- dominant tech companies have most if not all the necessary evidence: and
- dependence on tech platforms for future business. Few can afford to be invisible on Google Search or Amazon Market Place, or not be listed in Google or Apple’s App Stores.
This makes bringing private actions difficult. However, the public system overcomes the information deficit through investigatory powers and can be used instead. Claimants can be complainants to ensure anonymity.
The remaining problem is administrative law interim relief orders which take a lot longer than interlocutory injunctions available in the court system. This isn’t because authorities are slower than Courts.
The Administrative Law system: Orders for interim relief take months not days
When the current administrative law system is used, it takes time. For example, at the EU level, the flagship EU antitrust cases against Microsoft, Intel, and Google each took over 10 years to determine. The UK has taken very few such enforcement cases as they were in the exclave jurisdiction of the EU Commission until recently:
- The fastest that it has been deployed, in the EU, is slightly more than a year. That was in the Broadcom Case commenced in 2018 and decided in late 2019.
- In the UK the fastest the CMA has achieved a result is similarly just over a year, in the Google Privacy Sandbox case where the application for interim relief was filed on the November 2021 and the Decision with undertakings was made in January 2022.
UK Court process; Interim decisions: days not months
The Court process that is used in UK competition law is that available for all cases for breach of statutory duty (civil wrongs or torts). Interlocutory court orders are granted to preserve the status quo pending trial. They aren’t final decisions. They don’t need full evidence. They are granted on the basis of a prima facie case being shown.
The main reason why administrative decisions, even for interim orders, take time is that any decision made by a public authority needs to be properly based on relevant facts and matters and be sufficiently well founded to withstand a judicial review challenge. Authorities are required to proceed based on evidence and follow guidelines. They must take care to check the facts, obtain evidence from multiple sources and consult about their conclusions.
The court interlocutory order is a different animal in a different setting – it is issued as an “in-between” stages measure. It is designed merely to preserve the position pending an investigation into all the facts at trial and prevent one side or another achieving a fait accompli in the meantime. Where a court grants an order for interlocutory relief it isn’t final; it can be done based on the claimant’s evidence alone, and, if later on, when the defendant raises matters that have not been considered the court may change its mind and discharge the order.
Such applications to the courts are not difficult to put together and don’t involve a lot of time (or expense). An application notice needs to be created detailing the order the applicant is seeking, the reasons for the order, and the date and time of a requested hearing. The application is usually accompanied by witness evidence or a statement of truth from a solicitor, or both. They routinely take a matter of days to assemble. They often apply for only a temporary period by restraining the behaviour preserving the status quo.
They are truly forward looking in a way that is lacking in any administrative process where the administrator’s decision, even an interim one, can be challenged.
The Public Interest in changing the incentives toward compliance
The Courts can be used for public interest court actions. Those cases are brought in the name of the Attorney General are routinely used in most common law jurisdictions (except the UK). Importantly, interim relief changes the incentives on the defendant toward compliance. A strategy of “walking slowly backwards”, disclosing evidence slowly and moving slowly while making money as the case drags on can be seen in the many cases against Google, Apple and Facebook (among others) in the EU. Once an order has been issued to stop the defendant doing something it wants to do, the incentive changes to one of “discharging the injunction”, with a need to speedily resolve matters such as putting evidence forward that better explains the position.
In the US, specialist “Assistant Attorneys General for Antitrust” exist at Federal and State levels. The UK’s Digital Markets Unit will technically sit in the CMA – but as an enforcement agency it could be entitled to use the Attorney General’s powers to issue proceedings.
The common law recognition that certain public interest cases require public interest enforcement involves entrusting court action to a public (or in some cases licenced private) Attorney General to safeguard the public interest with the support of affected businesses. This should be considered further for the UK.
How can we implement it?
Implementing this would require something as simple as an amendment to the forthcoming Digital Markets, Competition and Consumer Bill, that the Digital Markets Unit would have the ability to take cases under the banner of the Attorney General, including applying for interlocutory injunctions.
Please contact Tim Cowen and Rachael Machado if you have any questions regarding the above.
The material in this article is only for general review of the topics covered and does not constitute legal advice. No legal or business decision should be based on its content.
This article is written in English language. Preiskel & Co LLP is not responsible for any translation of all or part of its content into any language.
 This paper revisits the argument made in ‘Closing the Enforcement Gap: Proposals for reform and increasing the speed of enforcement action in Big Tech competition cases’ by Tim Cowen (2022). The full report can be accessed here.
 See The Penrose Report, ‘Power to the people’ (February 2021); The Furman Review, ‘Unlocking digital competition, Report of the Digital Competition Expert Panel’ (March 2019).
 Case T-201/04.
 Case C-413/14.
 Case AT.39740.