CAT gives judgment in Tesco competition planning challenge
On 4 March 2009, the Competition Appeal Tribunal (CAT) gave its judgment on Tesco’s challenge to the decision of the Competition Commission (CC) that a “competition test” should be implemented within the planning system. This stems from the CC’s market investigation into the UK grocery market.
The CAT decided that the CC had failed properly to consider certain matters which are relevant to its recommendation that the competition test be imposed, which the CC characterised as “certain considerations about how the test would work and its costs and benefits”.
The CAT stressed that it has not concluded that a competition test would be ineffective as a remedy for the competition problems identified in the CC’s grocery sector market investigation, nor that such a test would be unreasonable, disproportionate or otherwise inappropriate or unlawful.
The CAT added that its conclusions do not preclude the possibility that the test would ultimately be lawfully recommended by the CC and implemented. It also stated that the deficiencies in the CC’s analysis are “within a narrow compass, and leave the vast majority of the [grocery market report] and its findings unimpugned”.
Tesco had requested the CAT to quash all the parts of the CC report relating to the competition planning test. The CAT judgment has not said what happens next, rather it says that it will invite the parties to address it on the question of specific relief once they have had an opportunity to consider this judgment.
The CC’s own view was that the CAT had questioned neither its findings in the grocery market report nor its proposed measures. It pointed out that “specifically [the CAT] has not challenged the rationale for a competition test to tackle local supermarkets monopolies or its design”. The CC continues to press forward with the measures and recommendations resulting from the report. It is in the process of consulting on those actions designed to address problems in the supply chain.
