Competition law

 

What is competition law?

Competition law regulates the relationship between businesses. It promotes and maintains competition within a market by preventing and punishing anti-competitive behaviour.

Under UK competition law, there are two types of anti-competitive behaviour:

  • Anti-competitive agreements - For example price-fixing agreements, control or influence of production levels or development agreements, and agreements that apply different conditions to similar transactions in order to disadvantage certain parties
  • Abuse of market dominance – For example imposing unfair trading terms and conditions, predatory or discriminatory pricing practices, and tying (where a consumer must purchase an additional product in order to purchase the one they want). There is a presumption that a business with 50% market share is dominant

Cartels

Cartel behaviour is the most serious type of anti-competitive behaviour. A cartel is an agreement amongst members of the same industry to limit competition to the detriment of the consumers. For example, a cartel will usually engage in price-fixing, bid rigging, and market sharing.

The Enterprise Act 2002 created a ‘cartel offence’ with criminal sanctions. Companies can face unlimited fines and individuals can be sentenced to up to five years in prison.

Office of Fair Trading

The Office of Fair Trading (OFT) is responsible for enforcing competition law in the UK. It can also refer merger and market inquiries to the Competition Commission.

When anti-competitive behaviour crosses over into other EU member states, EU competition law applies. The EU Commission is responsible for regulating EU competition law.

How can a competition solicitor help?

If a company is being investigated by the OFT or the Competition Commission, they should contact an expert competition solicitor as soon as possible for legal advice. It may be possible for a competition solicitor to negotiate with the authority to find a mutually agreeable solution in order to avoid penalties.

However, a competition solicitor can be of great assistance at the beginning of a potential merger or acquisition. They can advise their client on complying with their obligations under UK and EU competition law.

Contact Law works with competition solicitors throughout the UK - call us on 0800 1777 162.

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