CMA success in private healthcare appeal

13 Mar 2015 | by Caroline Sweeney

The Competition Appeal Tribunal (CAT) handed down judgment today in the appeal brought by AXA PPP Healthcare Limited (AXA PPP) against parts of the report produced by the Competition and Markets Authority (CMA) on its investigation into the provision of private healthcare.  AXA PPP challenged the CMA’s finding that the formation and operation of anaesthetists groups did not give rise to an adverse effect on competition (AEC) for the purposes of s.134 of the Enterprise Act 2002.  AXA PPP argued that there was an evidential presumption of an AEC where anaesthetists groups with a high market share collectively set prices; that the CMA had acted irrationally in its assessment of pricing evidence; and that the CMA had acted unlawfully in reaching its decision without having undertake further investigation.

AXA PPP’s appeal was rejected on all grounds.  The CAT confirmed that the CMA had a wide discretion in carrying out such assessments and in making such decisions, particularly given the complexity of the markets concerned and the statutory time-limits within which the CMA had to operate.  The CAT rejected an analogy which AXA PPP had sought to draw between the concept of an AEC and Article 101 TFEU/ the Chapter 1 prohibition. 

The CAT noted the limits of its role in a challenge brought to a market investigation decision under s.179 of the 2002 Act.  On such a challenge, the CAT is to apply the same rules as would be applied by a court on an application for judicial review.  The CAT noted that it was “dealing with a challenge by way of a statutory form of judicial review, not with an appeal on the merits. A review court or tribunal will be slow to find that an evaluative judgment of the nature in issue here, made by an expert regulatory body after careful assessment of relevant evidence, as here, was irrational or unlawful. In our judgment, AXA PPP has failed to show that the assessment made by the CMA of the significance of its price analysis was irrational or unlawful.”  Moreover, the CMA was “lawfully entitled, in the exercise of its investigative discretion, to decide not to pursue this dimension of its market investigation any further. To have done so might have jeopardised its ability to comply with its legal duty to produce its report within the statutory timetable. The CMA was entitled to have regard, as it did, to the constraints on time and resources available for investigation overall.”

Please click to view the judgment in AXA PPP Healthcare Limited v CMA

Kassie Smith QC and Brendan McGurk appeared for the Competition and Markets Authority

Anneli Howard appeared for the interveners, the Association Anaesthetists of Great Britain and Ireland