CMA reaches amicable conclusion over anti-competitive behaviour in auction services industry
First published by Admin on September 29, 2017 in the following categories: Investigations and tagged with cma
The Competition and Markets Authority (CMA) have reached a resolution in their investigations over online auction services for alleged anti-competitive behaviour. ATG Media addressed the CMA’s concerns and will be committing to undertakings to prevent further behaviour that may be construed as anti-competitive in the future.
The CMA commenced investigations on the 22 November 2016 into the supply of live auction platform services available in the U.K. after two complaints were made. Both complaints alleged that ATG Media imposed certain practices that meant their bidders couldn’t use a cheaper competitor’s service.
The national competition watchdog were concerned over “suspected anti-competitive agreements or concerted practices and suspected abuse of dominance in the supply of auction services”, particularly by employing methods to restrict prices and competition. The suspects were Turner Topco Limited, ATG Media Holdings Limits, ATG Media Limited and Metropress Limited. Together, they are part of the ‘ATG Media’ corporation.
ATG Media is one of the country’s largest suppliers of live online bidding platforms. The services allow bidders to bid on houses without having to attend the auction themselves, therefore bidding by proxy. However, the CMA’s investigations found that ATG media abused a dominant position by:
| Offering ‘best price’ clauses, promising to always provide its best rates, and thus preventing auction houses from going elsewhere. |
| Entering into exclusive arrangements with auction houses. |
| Preventing auction houses from promoting other live auction platforms. |
In one case, the CMA found evidence that ATG media asked some of the auction houses to “remove the lower commission rate offered by a [competitor]”. The authority concluded that such behaviour would restrict anti-competition by:
- Foreclosing the market to competitors and new entrants and thereby restricting the degree of competition (actual of potential) on the market (including limiting the ability and incentive to grow)
- Softening price competition between competing platforms, reducing choice for consumers and deterring rival [competitors] from competing with ATG media on price
ATG Media’s control of the market by way of these methods has potentially distorted competition which can harm all consumers and players involved. Behaviour like this can be seen as a breach of both U.K. and E.U. competition laws.
The dominant company, hailed as a ‘global pioneer of auction portals and live and timed online auctions’, has taken a step back and agreed commitments to stop potentially breaching competition laws, including:
- Cease restricting auction houses from using competitors
- Cease preventing auction houses from charging their bidders for using a competitor
- Cease preventing auction houses from promoting use of competitor’s auction platforms
The CMA accepted these commitments as sufficient and will now look to conclude their investigations into ATG Media. The commitments presented by ATG media and accepted by the CMA do not mean any liability has been admitted or found. Sometimes, resolving matters this way means that the investigated companies can avoid a fine whilst the CMA sees results of anti-competitive behaviour resolved.
Whilst an amicable resolution has been reached, the CMA is not prevented from continuing their investigations and issuing sanctions should they feel that ATG Media are not adhering to the agreed commitments; perhaps if there is a material change of circumstances, or if the CMA has reasonable grounds to believe ATG media has been untruthful or hidden something substantial from them.