The Competition Commission Appeal Tribunals

NOTICE OF APPLICATION UNDER SECTION 47 OF THE COMPETITION ACT 1998

CASE NO. 1004/2/1/01

Pursuant to Rule 13 of the Competition Commission Appeal Tribunal Rules 2000 (“the Tribunal Rules”), the Registrar of Appeal Tribunals gives notice of the receipt of an application under section 47 of the Competition Act 1998 (“the Act”) by the Association of British Travel Agents Limited, of 68-71 Newman Street, London W1P 4AH, in respect of a decision of the Director General of Fair Trading (“the Director”) dated 11th May 2001 (“the Contested Decision”) relating to a finding by the Director that the applicant had not shown sufficient reason why he should vary or withdraw Decision No. CA 98/1/2001, dated 24th January 2001 (“the Relevant Decision”), which decided that the rules of the General Insurance Standards Council (“GISC”) do not infringe section 2 of the Act. GISC notified its rules dated June 2000 (and later amended on 15th June and 24th October 2000) (“the GISC Rules”) to the Director on 30th June 2000 for a decision under section 14 of the Act that the GISC Rules did not infringe the Act, or that, in the alternative, the Director grant the GISC Rules an individual exemption under section 4 of the Act. The applicant submitted its application to the Director to vary or withdraw the Relevant Decision within one month of its publication, in accordance with Rule 28(1)(a) of the Director’s Rules and section 47 of the Act. The Relevant Decision and the GISC Rules are available on the websites of the Office of Fair Trading (www.oft.gov.uk) and GISC (www.gisc.co.uk) respectively. By an application lodged on 15th June 2001 the applicant seeks the following relief: 1. That the Contested Decision and the Relevant Decision be set aside; and 2. That the Tribunal declare that the GISC Rules materially restrict or distort competition; and/or 3. That the Tribunal declare that rule F42 of the GISC Rules, when read in conjunction with the rest of the GISC Rules, constitutes a material restriction or distortion of competition; and/or 4. That the Tribunal declare that the fee structure, as enacted, is discriminatory and amounts to a restriction or distortion of competition; and 5. That the Tribunal award the applicant its costs. The principal grounds on which the applicant relies are that: 1. The Director’s conclusion that the GISC Rules did not have as their object or effect an appreciable prevention, restriction or distortion of competition and therefore do not breach section 2 of the Act was an error of law; 2. The effect of rule F42 of the GISC Rules, when read in combination with rule F24 of the GISC Rules, is to force into membership of GISC those who otherwise would choose not to become members, and the additional direct and indirect costs of membership will affect the competitiveness of such undertakings. Further, the GISC Rules severely limit the freedom of member insurers to deal with non-member agents, and significantly restrict competition between member insurers. They also limit the freedom of non-member agents to deal with member insurers. Member intermediaries are not so limited, and there is therefore a distortion of competition between non-member agents and member intermediaries; 3. The fee structure in the GISC Rules discriminates between transactions entered into directly between member insurers and consumers and those entered through the assistance of intermediaries; 4. The Director has failed properly to identify and analyse these restrictions and has failed to test these restrictions against the consumer benefit upon which he relies in the Contested and Relevant Decisions as resulting from the GISC Rules; 5. The Director’s failure to carry out any, or any proper, assessment of the impact of the GISC Rules before reaching his decision that they do not breach section 2 of the Act was an error of law. Alternatively, such an assessment should have been carried out by the Director in considering whether to grant the GISC Rules an exemption under section 4 of the Act; and 6. The Director failed to provide adequate reasoning in the Contested and Relevant Decisions. These proceedings are likely to be determined expeditiously and therefore any person who considers that he has sufficient interest in the outcome of these proceedings may make a request for permission to intervene in summary form within 7 days of the publication of this notice. (By an Order dated 20th June the President of the Competition Commission Appeal Tribunals has abridged the one month period mentioned in Rule 14(2) of the Tribunal Rules to a period of 7 days). A request for permission to intervene should be sent to the Registrar, The Competition Commission Appeal Tribunals, New Court, 48 Carey Street, London WC2A 2JT, so that it is received within 7 days of the publication of this notice. Further details concerning the procedures of the Competition Commission Appeal Tribunals can be found on its website at www.competition-commission.org.uk. Alternatively the Tribunal Registry can be contacted by post at the above address or by telephone (020-7271 0395) or fax (020-7271 0281). Please quote the case number mentioned above in all communications. C. Dhanowa, Registrar 20th June 2001.