This article is written by Shriya Sehgal, a first-year student pursuing BBA.LLB. from Symbiosis Law School, Noida. This is an exhaustive article dealing with the various aspects of the Competition Act, 1998.

Introduction

The Competition Act, 1998 is considered to be one of the major sources of competition law in the United Kingdom. It is also the most recent statute there pertaining to competition matters. This Act provides a contemporary skeleton for identifying as well as tackling the conditional business practices. Also, this Act provides a shield against the abusive nature of dominant markets. In other words, this Act protects the country against the damaging effect on the competition via any agreement or business practice.

The Act is divided into IV parts and 14 schedules, Chapter I (Agreements) and Chapter II (Abuse of Dominant Position) of Part I being the important ones for the scope of this article.

Competition Act, 1998: Overview

Outline of the Act

Part I: Chapter I and Chapter II prohibitions

Part I consists of six chapters, that is, from Section 1 to Section 60. Chapter I prohibits any agreement or concerted (collaborative) practice that is performed with the purpose of preventing, restricting or distorting competition, provided an exemption from the prohibition applies. Article 101 of the Treaty on the Functioning of the European Union (TFEU) also prohibits such agreement or concerted practice which affects the trade practices between European Union Member State.  

In case of breach of Chapter I prohibitions, companies and individuals are liable to certain fines. The individuals may also be disqualified from serving as a director for a period of up to 15 years.

On the other hand, Chapter II prohibits the use of a dominant market position in the United Kingdom. Article 102  of TFEU may also be breached by such abuse to the extent that it affects trade between the Member States. The penalties for breach of Chapter II prohibition are the same as those that apply to Chapter I prohibition. There are no criminal penalties for completely unilateral conduct which constitutes an abuse of market power.

Part II: European Investigations

Part II of the Act throws light on market investigations. The European Commission was given the power to investigate markets in 2004. The European Union market investigation power is inspired by the power under United Kingdom legislation to carry out competition investigations into markets. This Part provides various provisions such as the power to enter a business or non-business premises under a warrant with respect to related Articles; privileged communication; power to conduct an investigation; offences etc.

Part III: Amendments to the Fair Trading Act, 1973

Part III of the Act deals with ‘Monopolies’ and consists of four sections, that is, from Section 66 to 69. The Fair Trading Act, 1973 has extended as well as integrated the United Kingdom competition law by controlling monopolies, mergers, takeovers, resale prices, and restrictive trade agreements. This Act established a regulatory authority, namely the Office of Fair Trading (OFT) with powers to supervise all aspects of competition policy along with specific responsibilities to oversee matters affecting consumers’ interests. The Act’s provisions have now been superseded by the Competition Act, 1988 relating to monopolies, resale prices, and restrictive trade practices. However, OFT is still responsible for the regulation of mergers and takeovers. 

There are certain areas of competition law that the Competition Act 1998 does not cover. Moreover, there are situations that affect the competition in an unacceptable way which further helps them to escape from the scope of the prohibitions contained in Chapters I and II of the Act. Therefore, the Act did not repeal the Fair Trading Act, 1973 with the purpose of maintaining the competition scrutiny over mergers as well as monopolistic situations.

Part IV: Miscellaneous amendments

Part IV of the Act is a supplement to this Act and consists of seven sections, that is, Section 70 to 76. This Act has ceased the existence of various Acts such as Monopolies and Restrictive Practices Act, 1948; Monopolies and Mergers Act, 1965; Restrictive Practices Court Act, 1976; Resale Prices Act, 1976; and has the following views about the Schedules:

• Schedule 12: Minor and consequential amendments set out in this Schedule are to have an effect.
• Schedule 13: Transitional provisions and savings set out in this Schedule are to have an effect.
• Schedule 14: Enactments set out in this Schedule are repealed.

Competition and Markets Authority (CMA) guidance

Competition and Markets Authority (CMA) is an independent non-ministerial department which is established with the purpose of promoting competition for the benefit of consumers. This Authority works within as well as outside the United Kingdom. It is led by the Chief Executive and senior team, and their work is supervised by the Board. In certain investigations, the decisions are taken by the independent members of the CMA panel.

It is their responsibility to ensure that the consumers get a good deal while buying goods and services, and businesses operate within the law. They investigate mergers between organisations; investigate the market in case of consumer or competition issues; protect consumers from unfair trading practices; take action against the anti-competitive behaviour of businesses. They are majorly responsible for enforcement of the Chapter I prohibition as well as Chapter II prohibition. 

Delegated legislation under the Act

A significant amount of legislative changes can be noticed in the United Kingdom for the purpose of adapting competition law to the needs of the market as well as its development. Following are the important acts in chronological order: 

• Monopolies and Restrictive Practices Act, 1948 (repealed); 
• Monopolies and Mergers Act, 1965 (repealed);
• Fair Trading Act 1973;
• Restrictive Practices Court Act, 1976 (repealed);
• Resale Prices Act,, 1976 (repealed);
• Restrictive Trade Practices Act, 1976 (repealed);
• Restrictive Trade Practices Act, 1977 (repealed);
• Competition Act, 1980 (almost all the provisions are repealed); and
• Competition Act 1998. 

Nowadays, competition law in the United Kingdom is regulated primarily by: 

• Fair Trading Act 1973; 
• Competition Act 1998; and 
• European Community Legislation (it is either implemented or directly applicable).

Chapter I Prohibition

Section 2(1): The prohibition

Chapter I prohibition includes Section 2(1) of the Act which applies to anti-competitive agreements and practices between undertakings, which is based on Article 101 of TFEU. In order to infringe the prohibition the following four elements must be satisfied:

1. An agreement, decision or concerted practice;
2. Between undertakings;
3. May affect trade within the United Kingdom; and
4. Object or effect the prevention, restriction or distortion of competition within the United Kingdom.

Subject to section 3

Section 3 of the Act excludes certain agreements to fall under the ambit of Section 2. This Section provides for three broad categories for exclusion from the Chapter I prohibition, namely: 

• Schedule 1- mergers and concentrations;
• Schedule 2- competition scrutiny under other enactments;
• Schedule 3- planning obligations and other general exclusions.

Moreover, the exclusions can be added or removed by the Secretary of State.

Agreements between undertakings, decisions by associations of undertakings or concerted practices

This Section strictly applies only to agreements between undertakings, decisions by an association of undertakings or concerted practice. Thus, the scope of this Section has been limited to the mentioned agreements only.

Undertakings

Basic definition

Under competition law, undertaking refers to any entity engaged in economic activity. Here, economic activity is an activity involving offering goods or services in a given market irrespective of its legal status and the way it is financed. Thus, public bodies are not excluded under this definition. Moreover, it is not essential to earn profits to be regarded as an undertaking.

Undertakings related by control

According to the governing rules of concentrations, “undertakings concerned” refers to the direct participants in a merger as well as the acquisition of control. In other words, it refers to an undertaking over which the public authorities directly or indirectly exercise dominant influence by virtue of their ownership, financial participation, or the rules which govern it. 

An authoritative influence or control of public authorities is presumed when they: 

• Hold the major part of the undertaking’s subscribed capital;
• Control the majority of the votes attached to shares issued by the undertaking; or 
• Are in a powerful position to appoint more than half of the members of the undertaking’s administrative, managerial or supervisory body.

Undertakings, not persons

The term ‘undertaking’ is wide enough to include any legal or natural person who is engaged in economic activity. This interpretation remains unaffected by the legal status and the way it is financed. Thus, public sector bodies engaged in economic activities can be undertaking for this purpose. It further includes businesses, firms, holdings, companies, sole traders and non-profit making organisations. 

For instance, a parent company and its subsidiary, or two companies having the same parent, will be regarded as a single undertaking. They are considered to be a single undertaking because they function as a whole. Moreover, the agreements between them are regarded as the mere allocation of functions within a single group.

Agreements

Chapter I prohibition primarily includes ‘gentlemen’s agreements’ along with formal written agreements between undertakings. Such formal and informal kind of agreements or undertakings is either oral or in writing. It need not be legally enforceable but necessarily involves the meeting of minds or ‘concurrence of wills’ between two undertakings.

Decisions by associations of undertakings

A decision is generally referred to as an initiative taken by an association which has ‘object’ or ‘effect’ of regulating the commercial behaviour of its members in the market, which includes:

• Guidelines;
• Recommendations;
• Resolutions;
• Oral exhortation;
• Disciplinary (ruling of the administrative body);
• Statutory rules, by-laws, articles of incorporation.

In case of an infringement of conduct, the association, as well as their constituent members, can be held liable. 

Under European Union law, this behaviour of bringing undertakings together under an associative form is not prohibited, provided it aims to damage the competition. 

Concerted practices

Basic definition

It generally refers to a form of coordination between undertakings without the conclusion of a so-called agreement where the concerned undertakings knowingly substitute practical cooperation for the competition risk between them. Such practice can amount to direct as well as indirect contact between firms whose intention is to do either of the following:

• To influence the conduct of the market; or
• To disclose intended future behaviour to competitors. 

The basic difference between agreements and concerted practice from a subjective point of view is that they are intended to catch forms of secret cooperation having the same nature and are only distinguishable from each other by their intensity and the forms in which they manifest themselves.

Direct and indirect contact between competitors

When suitable market conditions are established for concerted practice, coordination or cooperation must arise from a direct or indirect link between the competitors in order to prove this collusive practice. This link can be used as evidence, as well as parallel behaviour. To be clear, the aim of this link should be to remove the uncertainties in the market and the future behaviour of the competitors.

Object or effect the prevention, restriction or distortion of competition within the United Kingdom

Overview

Article 101(1) TFEU prohibits agreements and concerted practices which have their ‘object’ or ‘effect’ the prevention, restriction or distortion of competition. To this end, it has for some time been settled that when surveying possibly prohibitive and restrictive conduct, the attention on ‘object’ and ‘effect’ are elective as opposed to total contemplations.

Restriction of competition by object

In this case, an understanding is exhibited to have an anti-competitive ‘object’, there is no compelling reason to think about the impacts of the agreement. Anti-competitive impacts are assumed and the agreement falls inside the Article 101(1) TFEU prohibition, even without affirmation that it really creates negative impacts. Be that as it may, where no anti-competitive object is set up, an appraisal of the understanding’s belongings must be done by the investigating authority.

While the differentiation between the two classifications of infringement has been dependent upon some contention, on a fundamental level ‘object’ infringement emerges from conduct that is intrinsically hostile and henceforth at the more serious end, here ‘serious’ suggests an accepted probability of damage as well as an absence of pro-competitive features. Interestingly, agreements that are less clearly anti-competitive require investigation of their actual impacts before being denounced under Article 101(1) TFEU.

Where an agreement is arranged as restrictive ‘by object’, the onus falls on the collaborating parties to legitimise their agreement under Article 101(3) TFEU exception criteria. In this way, a ‘by object’ discovery makes it simpler for authorities of competition to set up an infringement while venture parties would be left safeguarding their game plans exclusively on ‘efficiency’ grounds under Article 101(3) TFEU which is a significant troublesome task.

Restriction of competition by effect

In the EU there is authoritatively no such ‘rule of reason’ while surveying whether an agreement produces real or potential anti-competitive impacts, not least in light of the fact that any agreement found apparently prohibitive under Article 101(1) TFEU is fit for being absolved under Article 101(3) TFEU. Notwithstanding, contentions have been progressively advanced in class proposing that thought of useful parts of the agreement ought to be figured into the Article 101(1) TFEU step, that is, not only at the Article 101(3) TFEU arrange. In this regard, it is presented that Article 101(1) TFEU adequately includes a ‘rule of reason’ under which it is important to decide if customers may be more terrible yet for the agreement.

Appreciability

Effect restrictions

An understanding, regardless of whether between competitors or non-competitors, won’t trigger Article 101(1) TFEU prohibition where its effect on competition isn’t ‘appreciable’. At the end of the day, the prohibition doesn’t matter when any recognised anti-competitive impacts are ‘insignificant’ as the inconvenient consequences for the competition must be of an adequate extent to justify the consideration of the Commission. The Commission’s De Minimis Notice on Agreements of Minor Importance (educated by, yet not to be mistaken for, the de minimis doctrine) is non-binding guidance setting out how the Commission will manage and evaluate the issue of appreciability.

Object restrictions

It is measured by the Notice with the assistance of market share thresholds that the Commission won’t think about an appreciable restriction of competition, that is,  ‘de minimis’ and hence not inside Article 101(1) TFEU. This gives a sheltered harbor inside which parties can profit instead of explaining every one of the conditions wherein appreciability will be found. Be that as it may, even where the applicable thresholds are not surpassed, the assumption of non-appreciability won’t be kept up where the understanding being referred to contains a ‘by object’ restriction.

Applicable law and territorial scope

The United Kingdom competition rules are interpreted and applied in accordance with the European Union competition law. The Competition Act prohibitions are modeled upon those contained in Article 101 and 102 of the TFEU. 

Section 2(2): Illustrative list

This Section includes a list of examples of anti-competitive agreements that resembles Article 101 of TFEU. When compared to Article 101, this is a non-exhaustive, illustrative list and does not set a limit on the investigation and enforcement activities of the Office of Fair Trading. Article 81 is considered as a Guideline to the same, as the Chapter I Prohibition does not deal with various types of unlawfully coordinated conduct in detail. However, the EU guidelines on the horizontal and vertical agreements discussed in Chapter I will be applied in the United Kingdom. Here, horizontal agreements refer to undertakings at the same level of supply whereas, vertical agreements refer to the agreements between a supplier and an acquirer at a different level of production or distribution chain.

The following agreements restrict competition in the United Kingdom market:

• Directly or indirectly fixing prices;
• Fixing trading conditions;
• Sharing markets;
• Limiting or controlling production or investment;
• Collusive tendering (bid-rigging);
• Joint purchasing or selling;
• Sharing information;
• Exchanging price information;
• Exchanging non-price information;
• Restricting advertising;
• Setting technical or design standards.

Here, price-fixing, market sharing, bid rigging and limitation of the supply or production of goods and services are hard-core cartels.

Section 2(3): Extraterritorial territory

This Section states that Section 2(1) can be applied only when the following are implemented or intended to be implemented in the United Kingdom:

• Agreements;
• Decisions by associations of undertakings;
• Concerted practices.

Section 2(4): Voidness

This Section holds all the agreement or decision to be void if they are prohibited by subsection (1) of Section 2.

Severance

English contract law provides that severance is possible in certain circumstances, although the rules on this subject are complex. It is a matter of the applicable law of the contract, rather than the choice of law, rules of the court in which the action is brought to determine whether severance is to be affected and, if so, by what criteria the severance is to be affected. Severability is possible in English law where it would not fundamentally change the character, scope, purpose, substance or intention of the agreement.

Is the agreement Void or illegal?

An agreement that infringes Article 101(1) is not only void and unenforceable but is also illegal. This has serious consequences, for instance, a party who has paid money to another under an illegal agreement cannot recover that money unless it can be shown that the parties were not in equal fault. Also, it would be contrary to the effective application of Article 101 for national law to impose an absolute bar on an action by one party to an agreement that restricts competition against another party to it, however, EU law does not prevent national law from denying a party who has significant responsibility for the restriction of competition the right to obtain damages from the other contracting party. This principle would presumably be applied in a case concerning Section 2(4), pursuant to the governing principles clause in Section 60 of the Competition Act.

Transient voidness

An agreement may, in its lifetime, drift into and out of unlawfulness under Article 101(1), and therefore be void and unenforceable at some times but not at others. The same, presumably, is true of Section 2(4).

Section 2(5) and 2(6): Interpretation

These provisions explain that, except where the context otherwise requires, any reference in the Act to an agreement includes a reference to a concerted practice and a decision by an association of undertakings.

Section 2(7): the United Kingdom

Section 2(7) provides what “the United Kingdom” means, in relation to an agreement that operates or is intended to operate only in a part of the UK. The UK for this purpose includes the following:

• England;
• Wales;
• Scotland; and
• Subsidiary islands (excluding the Isle of Man and the Channel Islands) and Northern Ireland.

Section 2(8): The Chapter I prohibition

This Section provides that the prohibition imposed by Subsection (1) shall be referred to as ‘the Chapter I prohibition’ in this Act. This expression is, therefore, a legislative expression that is similar to Section 18(4) of the Act which recognises the ‘Chapter II prohibition’.

The Chapter I prohibition: excluded agreements

Section 3 provides for various exclusions from the Chapter I prohibition. Some of these exclusions are also applied to Chapter II prohibition. Section 59(2) provides that if the effect of one or more exclusions is that the Chapter I prohibition is not completely applicable to one or more provisions of an agreement, those provisions do not have to be overlooked while considering whether the agreement itself infringes the prohibition for other reasons or not. Thus, the effect of the agreement as a whole can be considered.

Section 3(1) provides that the Chapter I prohibition does not apply in cases where it is excluded by or as a result of the following:

• Schedule 1: mergers and concentrations;
• Schedule 2: competition scrutiny under other enactments;
• Schedule 3: planning obligations and other general exclusions.

Schedule 4 on regulatory rules of various professions has been repealed.

Schedule 1: Mergers and concentrations

This Schedule deals with the application of Chapter I as well as Chapter II prohibitions related to mergers and concentrations. This exclusion is automatic and does not require an application of the CMA. However, the prohibitions under this Schedule will not apply to mergers under the Enterprise Act nor the concentrations in respect of which the European Commission has exclusive jurisdiction.

Relationship of Chapter I and Chapter II prohibitions with United Kingdom merger control

The exclusion applies to any transaction where enterprises cease to be distinct, irrespective of whether there is a relevant merger situation that is capable of being investigated under the Enterprise Act. Moreover, ‘ancillary restrictions’ fall outside the Chapter I prohibition. To be ancillary the restriction must be directly related to the merger provisions and necessary to the implementation of the same. The CMA stated that it will generally follow the European Commission’s approach and will not explicitly state in a decision which restrictions are ancillary.

Newspaper mergers

The exclusion for certain newspaper mergers has been repealed from the Chapter I prohibition.

Clawback

The ‘clawback’ provisions apply only to Chapter I prohibition and not to Chapter II prohibition. This Schedule provides for the possibility of withdrawal of paragraph 1 exclusion by the CMA and the same can remove the benefit of the exclusion by a direction in writing if it considers the following:

1. An agreement would infringe the Chapter I prohibition, if not included; and
2. The agreement is not a protected agreement.

Protected agreements

The CMA cannot exercise the right of clawback in case of a protected agreement. The Act defines four categories of protected agreement:

1. An agreement in relation to which the CMA or Secretary of State has published its or his decision not to refer a merger for an in-depth investigation. The CMA cannot reverse the decision not to refer a merger under the Enterprise Act by seeking to apply the Competition Act 1998.
2. An agreement where the CMA has found there to be a relevant merger situation.
3. An agreement that would result in enterprises ceasing to be distinct in the sense of Section 26 of the Enterprise Act.
4. An agreement that the CMA has found gives rise to a merger under Section 32 of the Water Industry Act, 1991.

Relationship of Chapter I and Chapter II prohibitions with EU merger control

This Schedule also provides that the Chapter I prohibition does not apply to concentrations which have a European Union dimension. This provision is necessary as it provides that no Member state can apply its national legislation on competition to any concentration that has an EU dimension since the European Commission has exclusive jurisdiction in such cases.

No clawback

Since this schedule deals with matters that are within the exclusive jurisdiction of the European Commission, it follows that the CMA does not in this situation enjoy a right of clawback as it does in case of a merger that is subject to the Enterprise Act 2002. 

Schedule 2: Competition scrutiny under other enactments

Schedule 2 excludes agreements that are subject to competition scrutiny under other legislation. The Government explained that so far as specific agreements are subject to competition scrutiny under regimes established to deal with circumstances of particular sectors, it is inappropriate to subject them to the Chapter I prohibition, as it would create unjustified double jeopardy.

Communications Act, 2003

Section 293 of the Communications Act, 2003 provides that the Office of Communications should periodically review the networking arrangements between Independent Television Ltd. including an assessment of their effect on competition. They have also conducted annual reviews of these arrangements.

Financial Services and Markets Act, 2000

The Financial Services Act, 2012 amended the Financial Services and Markets Act, 2000 in order to enhance the competition scrutiny of regulating provisions or practices adopted by the Financial Conduct Authority (FCA). The Financial Services Act, 2012 established the FCA with the strategic objective of ensuring the following:

• Financial markets function well;
• Operational objectives of securing consumer protection;
• Protecting the integrity of the United Kingdom financial system;
• Promoting effective competition in the interest of consumers.

The FCA replaced the Financial Services Authority which no longer exists. Moreover, the CMA may give advi,ce to either regulator that one or more regulating provisions may cause the prevention, restriction or distortion of competition in the supply of goods and services in the United Kingdom. The CMA has agreed a Memorandum of Understanding with the FCA which records the basis on which they will cooperate on financial services matter.

Legal Service Act, 2007

Sections 57 to 61 of the Legal Service Act, 2007 make provisions for competition scrutiny of the regulatory rules of the legal profession by the CMA.

No power to amend Schedule 2

Section 3 of the Act provides the power to amend Schedule 1 and Schedule 3 only. Thus, there is no power to amend Schedule 2.

Schedule 3: Planning obligations and other general exclusions

Schedule 3 is generally referred to as ‘General Exclusions’ and includes various matters that are excluded despite being considered important.

Planning obligations

Agreements involving planning obligations are excluded by Schedule 3. For instance, when planning permission is given, provided the developer agrees to provide certain services or access to facilities.

Section 21(2) Restrictive Trade Practices Act, 1976

Agreements in the subject of directions under Section 21(2) of the Restrictive Trade Practices Act, 1976 are excluded from Chapter I prohibition under Schedule 3. However, this was repealed (w.e.f. 1 May 2007).

EEA regulated markets

This Schedule also excludes various matters concerning EEA regulated markets, that is, financial services, from Chapter I prohibition. According to the definition provided in paragraph 3(5) it refers to a market that is listed by another EEA State and doesn’t require a dealer physically on the market where trading facilities are provided including other trading floors of the market.

Services of general economic interest

In case of an undertaking, neither the Chapter I prohibition nor the Chapter II prohibition is applicable. This provision is based on Article 106(2) TFEU and the important guidelines on the same are mentioned in Guidelines on Services of general economic interest exclusion, and Public Bodies and competition law. The guidance notes that as soon as public-sector activities are exposed to economic regulation, it is possible that functions that were earlier considered to be social might be regarded as economic. Consequently, an entity engaged in those activities might be regarded as an undertaking.

The CMA will interpret the exclusion strictly and their guidance notes that in a number of EU cases Article 106(2) has been applied where an undertaking was subject to a universal service obligation and needed to be protected. Moreover, the combined effect of privatisation, liberalisation and EU initiatives has been that the number of exclusive rights held by the undertakings has been reduced. Generally, it is considered that effective competition will best serve the consumer’s interest over time.

The exclusion of services of general economic interest within the energy and railway sectors has been dealt with under specific guidance.

Compliance with legal requirements

In case of an agreement or conduct that is required to comply with a legal requirement, neither the Chapter I prohibition nor the Chapter II prohibition is applicable. Here, legal requirements refers to the one imposed by or under any enactment in force in the United Kingdom, by or under TFEU or the EEA Agreement and having legal effect in the United Kingdom without further enactment or under the law in force in another Member State having legal effect in the UK. as per the CMA’s guidance such exclusion applies in limited circumstances only. Moreover, this exclusion applies only where the regulated undertaking is required to act in a certain way and not to the discretionary behaviour of the undertaking.

Avoidance of conflict with international obligations

This Schedule provides power to the Secretary of State to order the exclusion of the application of Chapter I prohibition from an agreement or a certain type of agreement where it is appropriate in order to prevent a conflict between the provisions of the Competition Act and an international obligation of the United Kingdom. The order can provide conditions such as application in specified circumstances and retrospective effect. Similar provisions are contained in this Schedule for exclusion from the Chapter II prohibition. Moreover, the term ‘international obligation’ further includes intergovernmental arrangements relating to civil aviation because such arrangements that permit flights between the United Kingdom and other countries are not made as treaties and therefore, don’t give rise to the international obligation.

Public policy

This Schedule provides power to the Secretary of State to order the exclusion of the application of Chapter I prohibition from an agreement or a certain type of agreements where there is the existence of exceptional and compelling reasons of public policy for doing so. The order can provide conditions such as appliance in specified circumstances and retrospective effect. Similar provisions are contained in this Schedule for exclusion from Chapter II prohibition.

Coal and steel

This Schedule provides that Chapter I and Chapter II prohibitions do not apply to an agreement or conduct within the exclusive jurisdiction of the European Commission under the European Coal and Steel (ECSC) Treaty. However, this provision doesn’t serve any practical purpose now.

Agricultural products

This Schedule provides that the Chapter I and Chapter II prohibitions do not apply to agreements that fall outside Article 101 TFEU by virtue of Regulation 1184/2006. Moreover, provisions are made for clawback.

Professional rules

Schedule 4 provides that Chapter I prohibition is not applicable to designated professional rules. Originally, the exclusion was justified on the grounds that the professional rules contained disciplinary arrangements, were liable to judicial review and, most importantly, protected the public. As per Section 207 of the Enterprise Act, 2002, Schedule 4 was repealed with effect from 1 April 2007 after reviewing the level of competition in the professions. The CMA, then OFT plays an active role in reviewing the markets for professional services which led to lifting up of various restrictions imposed on the providers of professional services.

Section 50: Vertical agreements

Section 50 of this Act provides for the exemption of vertical agreements from the Chapter I prohibition only and not Chapter II prohibition. The same was affected by the Competition Act 1998 (Land and Vertical Agreements Exclusion) Order 2000, however, vertical price-fixing remained unaffected. The treatment of vertical agreements in domestic as well as EU law was brought into alignment with each other by Regulation 1/2003. Consequently, the exclusion of vertical agreements from Chapter I prohibition was repealed which left them with the benefit of the EU block exemption or UK parallel exemption for such agreements.

Section 50: Land agreements

Agreements relating to land were excluded from Chapter I prohibition only and not Chapter II prohibition from 1 March 2000 to 5 April 2011. However, the exclusion was revoked by the Competition Act 1998 (Land Agreements Exclusion Revocation) order, 2010. The rationale behind the exclusion was that commercial leases contained restrictive covenants and imposed conditions with the primary aim of estate management. The exclusion was uncertain with respect to such covenants and rendered conditions void and unenforceable. The application of Chapter I and II prohibitions have been published to them to provide assistance to undertakings and their professional advisers in following of the revocation of the exclusion for land agreements guidance. The guidance also states that a minority of land agreements will be caught by the Chapter I prohibition.

The Chapter I prohibitions: Exemptions

Introduction

Section 9 of the Competition Act provides a legal exemption to the Chapter I prohibition. Similar to the EU law, undertakings shall conduct a self assessment of whether an agreement that infringes the Chapter I prohibition satisfy the criteria of Section 9 of the Act which is similar to Article 101(3) TFEU. The important Sections can be briefly understood as follows:

• Section 6 and 8: Adoption of domestic block exemption;
• Section 10: Parallel exemption, where an agreement satisfies the EU block exemption or would do it if it were to affect trade between the Member States; and
• Section 11: Exemption for other agreements that were primarily concerned with certain agreements in the air transport sector but is now obsolete.

Exemption criteria

Section 9 of the Act is similar to Article 101(3) TFEU, the only difference being that the latter is limited to goods whereas the domestic provision can also be applied to the services.

Burden of proof

Section 9(2) provides that the burden of proof shall lie on those undertakings who claim the benefit of Section 9(1). There is no agreement that cannot be defended under Section 9(1) on a priori grounds. For instance, an agreement that restricts competition by the object may be legal provided the parties to the agreement can show that it satisfies the criteria of that provision.

Scope of section 9(1)

According to a reputable source, it was held in a debate that Section 9 shall be interpreted in the same manner as Article 101(3) TFEU. Moreover, Section 9(1) should be interpreted in a broad manner having regard to non-economic benefits or more narrowly according to an economic efficiency standard.

The application of section 9(1) in practice

According to the competition authorities and the courts in the United Kingdom, very few applications of Section 9(1) can be seen. The following are a few examples of the same:

• LINK Interchange Network Ltd. applied this Section to arrangements that provided for a centrally set multilateral interchange fee for the operation of the LINK network of automated teller machines in which the major banks and building societies of the United Kingdom participate.
• In MasterCard, the OFT concluded that the collective fixing of the interchange fee did not satisfy the requirements in this Section of indispensability since it extended to services that were not within the scope of the payment system.
• In Memorandum of Understanding on the Supply of oil fuels in an emergency, the OFT granted an individual exemption to an agreement that would improve distribution by enabling the Government to direct supplies of fuels to essential users such as providers of emergency services in the event of a fuel shortage.

Section 9(1) has been raised before the domestic courts but does not appear to have been the subject of many reported judgments.

Block exemptions

Section 6 of the Competition Act allows the Secretary of State, acting upon a recommendation from the OFT, to adopt block exemptions. A block exemption may contain conditions and obligations and may be of limited duration, by virtue of Section 6(5) and 6(7) respectively. The procedure for adopting block exemption is set out in Section 8. There are a number of EU block exemptions, and these are applicable to agreements caught by the Chapter I prohibition by virtue of the parallel exemption provisions in Section 10. One block exemption has been adopted under the Competition Act, for public transport ticketing schemes that allow passengers to purchase tickets that can be used on the service of the participating travel operators. The block exemption entered into force on 1 March 2001 and expired on 29 February 2016. The CMA has adopted the OFT’s guideline on the block exemption.

Parallel exemptions

Section 10 of the Competition Act provides for ‘parallel exemptions’. An EU block exemption has block exempted many agreements. However, there are others that would be exempted but for the fact that they do not produce an effect on trade between the Member States since such agreements would not infringe Article 101(1) they would not require or benefit from block exemption under Article 101(3). Further, Section 10 can be briefly understood as follows:

• Section 10(1) and (2) of the Act provides that any agreement that benefits from a block exemption under EU law or affects the trade between the Member States will also be exempted from the Chapter I prohibition. A consequence of the availability of the parallel exemption is that the parties to such agreements do not need a block exemption under domestic law. 
• Section 10(4) ensures that the duration of any parallel exemption is in line with the position in EU law.
• Section 10(5) provides for the CMA in accordance with rules made under Section 51 of the Act to impose, vary or remove conditions and obligations subject to which a parallel exemption is to have an effect, or even to cancel a parallel exemption.
• Section 10(6) enables the above mentioned cancellation to be retrospective from before the date of the CMA’s notice.

The Chapter II Prohibition

The prohibition

Chapter II of the Competition Act prohibits the abuse of a dominant market position in the United Kingdom. Such abuse may also breach Article 102 of the TFEU to the extent that it affects trade between the Member States. The civil sanctions for breach of the Chapter II prohibition are the same as those that apply to breach of Chapter I prohibition and it can be enforced by the CMA or private litigants in the same way. There are no criminal sanctions for purely unilateral conduct which is deemed to constitute an abuse of market power.

Section 18

Section 18 of the Act deals with ‘Abuse of a dominant position’ in the United Kingdom. Thus, the prohibition imposed by this Section is referred to as “the Chapter II prohibition”.

‘The Chapter II prohibition’

The Chapter II prohibition targets anti-competitive conduct by undertakings exercising significant market power. It is based on Article 102 and prohibits:

• Abusive conduct;
• By one or more undertakings which, either singly or collectively, hold a dominant position in a market; and
• Which may affect trade with the United Kingdom.

Article 102 of TFEU is like the Chapter II prohibition, yet applies in an EU setting. It bans maltreatment of a prevailing business sector position influencing exchange between the member states of the EU. Similar instances of direct thought to be oppressive for Chapter II apply to Article 102.

‘Undertakings’

As explained under Chapter I prohibition, undertakings can be broadly interpreted to include any natural or legal person engaged in economic activity, irrespective of its legal status and the way in which it is financed. Public sector bodies engaging in economic activities can be undertakings for this purpose.

Affecting trade within the United Kingdom

There is no requirement that the abuse occurs in a United Kingdom Market. It is sufficient that the undertaking committing the abuse is dominant in relation to a United Kingdom market, and that the conduct complained of may produce effects on trade in the United Kingdom or part of the United Kingdom.

Voidness

The Chapter II prohibition does not expressly render void contractual provisions that constitute an abuse of a dominant position. Consequently,  this flows automatically from the illegality of the conduct constituting the abuse.

Market size

The size of the market plays a crucial role in the assessment of market power. The following cases consider the market size as an imperative factor:

• Economies of scale exist where average costs fall as yield rises. Within the sight of enormous economies of scale, a potential contestant may need to enter the market on a huge scale, in connection to the size of the market to compete adequately. The enormous scale section may require generally huge sunk expenses and may be bound to pull in a forceful reaction from occupants. These variables may in certain conditions comprise hindrances to passage. 
• System impacts are much the same as economies of scale which may make a new section harder where the base practical scale is enormous in connection to the size of the market. For example, regarding clients of the system.
• The quality of purchasers and the structure of the purchasers’ side of the market may compel the market intensity of a seller. Size isn’t adequate for purchaser control. Purchaser control requires the purchaser to have a decision. 
• In general, purchasers’ power is beneficial in two circumstances. Firstly, when there are large efficiency gains that result from the factors like a size that give the purchaser its power and these are passed on to the final consumer through downstream competition. Secondly,  when it exerts downward pressure on a supplier’s prices and the lower prices are passed on to the final consumer.

The relevant market

A determination that an undertaking enjoys such a position of economic strength that it can be considered dominant may depend crucially on how the relevant market is defined. This must be carefully considered through an assessment of:

• The goods or services which form part of the market, that is, the relevant product market; and
• The geographic extent of the market, that is, the relevant geographic market.

Assessing dominance

Dominance within a market will depend on a close examination of the conditions of competition within the relevant market, including various factors such as market shares, the position of competitors, barriers to entry and the bargaining strength of customers.

Market shares

Market conditions are affected by market shares. A company may generally be considered dominant if it is able to behave to an appreciable extent independently of its competitors, customers and ultimately consumers, thereby preventing effective competition on the relevant market. As a rule of thumb, dominance will not be generally considered to exist below a market share of 40%. Above 50%, however, a rebuttable presumption of dominance exists.

Entry barriers

The barrier to entry of new enterprises into the relevant market is a major restraint on the dynamics of competition. When a dominant enterprise in the relevant market controls an infrastructure or a facility that is necessary for accessing the market and which is neither easily reproducible at a reasonable cost in the short term nor interchangeable with other products/services, the enterprise may not without sound justification refuse to share it with its competitors at reasonable cost.

Other factors in the assessment of market power

The power of the market can be assessed on the basis of various factors, such as:

• Market share;
• The size and resources of the enterprise; 
• Size and importance of competitors; 
• The economic power of the enterprise; 
• Vertical integration;
• Dependence of consumers on the enterprise; 
• The extent of entry and exit barriers in the market; 
• Countervailing buying power; 
• Market structure and size of the market;
• Source of dominant position viz. whether obtained due to statute etc.; 
• Social costs and obligations and contribution of enterprise enjoying dominant position to economic development.

Super-dominance

Sometimes a firm or a company might be referred to as being ‘super-dominant’. Unlike dominance, there is no formal legal definition of this term. However, super-dominance is generally taken to refer to a situation where a firm’s position is so large in a given market that any residual competition is, at best, marginal. It is on this basis that some have suggested that such a company (one with a very high market share and evident economic strength) has an even greater ‘responsibility’ to the market.

Abuse

The concept of abuse is broad: any conduct by a dominant company that allows it to enhance or exploit its market position to the detriment of competitors or consumers may be considered abusive. Most of the cases considered by the OFT or CMA to date have related to conducting alleged to have excluded competitors from a market. The forms of conduct that have been reviewed by the United Kingdom competition authorities for their potential exclusionary effects include:

• Refusal to supply so as to prevent effective competition;
• The conclusion of exclusive purchasing, supply or distribution agreements so as to create a barrier to entry;
• Trying or leveraging so as to extend a position of dominance from one market to another;
• Pricing with exclusionary effects; and
• Applying discriminatory standards to independent parties compared to those applied to affiliate companies.

Cases in which conduct has been alleged to exploit customers have been fewer in number and most have related to excessive pricing. However, concerns have also been raised by the United Kingdom competition authorities in relation to conduct that discriminated between customers.

Examples of abuse

Following are the various examples or types of abuse:

Exclusionary abuse

Abuse portrayed as ‘exclusionary’ is a conduct by the dominant undertaking which is equipped for avoiding contenders, in entire or partially, from productively entering or staying active in a given market and which, as an indirect outcome, will at last detrimentally affect customers. Exclusionary practices are normally observed as the most unsafe kind of abuse. This is on the grounds that they can undermine the competitive procedure over the longer term by anticipating small or new contenders turning out to be reasonable challengers to a dominant company and in this way denying clients the chance to profit by better choice and competition. Some of the instances of exclusionary abuse are as follows:

Predatory pricing: Conduct explicitly planned for dispensing with a contender’s situation as a rival either by constraining it out of the market or by preventing market entry. This is accomplished by a dominant organisation by renouncing benefits in the present moment so as to drive out or demoralise contenders. When the dominant organisation has effectively avoided existing contenders or potential contestants, it will have fortified its position and be free.

Refusal to deal: A dominant undertaking’s opportunity to pick with whom it conducts business might be constrained where, as a vertically incorporated undertaking.

Loyalty rebates: A refund given to a customer once a threshold quantity has been purchased over a particular period can encourage customers to place all of their orders with one firm rather than split their orders amongst competing firms. This effectively amounts to an exclusivity obligation in its effect.

Tying and bundling: Techniques used by firms to link the sale of two distinct products together may make it more difficult for rivals of the stand-alone products to compete. See further, Tying and bundling the challenge of new markets to Article 102 TFEU.

Exploitative abuses

Such type of abuse is not at all like exclusionary abuse that target contenders and, in this manner, hurt consumers in an indirect way because of avoidance of competitors and a resulting decrease in competitive offerings. Instead, ‘exploitative abuses’ don’t adversely influence rivals. They involve consumers being hurt legitimately by the dominant firm which utilises its market capacity to obtain rents from its clients which might not be ordinarily reachable. 

The fundamental case of exploitative conduct is where a dominant firm charges unnecessary prices to its clients. While the worry with respect to excessive pricing is natural, practically it is implemented once in a while by the authorities as it includes a stipulation of the ‘right’ competitive price and accordingly entails price regulation.

Exploitative abuses likewise may include the dominant firm discriminating between consumers or tying items to the extent that it urges consumers of a primary item (for instance, a razor) to purchase secondary (optional) items (for instance, razor blades) at exorbitant prices and under out of line terms.

Reprisal abuses

The idea of a ‘reprisal’ abuse includes a dominant organisation ‘going overboard’ to dangers it sees to its business advantages. The dominant organisation endeavors to caution, discipline or punish the trading partner or contender by, in addition to other things, expanding costs charged, ending supply or buying connections or affecting lawful procedures. These abuses are exclusionary in their goal and impact.

Dividing the Single Market

A dominant organisation that obstructs the activities of the Single Market, for instance, by confining the progression of products over national outskirts, may comprise an abuse. This might be where conduct limits rival present in one Member State from contending with a prevailing occupant dominant in another Member State.

Objective justification

Generally, harsh conduct won’t interfere with Article 102 TFEU where the prevailing organisation can build up an ‘objective justification’ for its activities. To accomplish this, the predominant organisation should show that the conduct accomplishes an authentic objective, that is, securing or improving public interest, safeguarding the dominant company’s business advantages including commercial interest and producing efficiencies that would somehow not be acknowledged for the conduct being referred to.

It ought to be noticed that the ‘objective justification’ consideration isn’t an exclusion procedure much similar to the treatment of restrictive agreements under Article 101(3) TFEU. In other words, the issue of ‘objective justification’ goes to the subject of whether investigated one-sided conduct is, actually, a ‘misuse’, that is, the absence of objective justification is required before conduct can be lawfully portrayed as a ‘misuse’.

Besides, and not at all like the Article 101(3) TFEU process, the onus is additionally on the Commission to affirm to the imperative lawful standard that there is no objective justification for the conduct being referred to. Be that as it may, the dominant company is relied upon to feature the reasons why it accepts the conduct as justifiable.

Conduct of minor significance

In order to avoid the prohibition regime being unduly burdensome on small businesses, the Act provides limited immunity from financial penalties for small agreements in relation to infringements of Chapter I prohibition and for the conduct of minor significance in relation to Chapter II prohibition. The category of conduct prescribed for the purposes of section 40(1) of the Act is conducted by an undertaking. The applicable turnover of such an undertaking should not exceed £50 million for the previous one business year in the calendar year during which the infringement occurred.

Article 3(2) Regulation 1/2003

The exemption to the combination rule as characterized in Article 3 (2) of Regulation 1/2003 tends to endeavors that don’t include a predominant situation inside the significance of Article 102 TFEU. Some new Member States like the Czech Republic utilise this special case in an odd manner along these lines restoring national limits to the hindrance of the internal market, that is, a level playing field and eventually European consumers. This was not the expectation of Guideline 1/2003.

Exclusions

Exclusions for mergers subject to the United Kingdom or EU merger control

Chapter II prohibition does not apply to conduct resulting in a relevant merger situation or in a concentration having European Union dimension. This exclusion is generally linked to the exclusion of mergers from the Chapter I prohibition, which has been discussed earlier.

Financial Services and Markets Act, 2000

The exclusion from the Chapter II prohibition for conduct pursuant to the regulatory provisions of the Financial Services and Markets Act, 2000 has been repealed. The Financial Services Act 2012 amended the Financial Services and Markets Act 2000 in order to enhance the competition scrutiny of regulating provisions or practices adopted by the Financial Conduct Authority (FCA) and/or the Prudential Regulation Authority. Agreements, practices or conduct that were encouraged by any of the former Financial Services Authority’s regulating provisions were excluded from Chapter I and Chapter II prohibitions from 1 March 2000 to 1 April 2013. This exclusion was repealed by the Financial Services Act 2012.

Other exclusions

Section 19(1) provides that Chapter II prohibition does not apply to cases excluded by Schedule 3. Some of the exclusions in Schedule 3 apply only to Chapter I prohibition, however, the following paragraphs under Schedule 3 are also excluded from the application of the Chapter II prohibition:

• Paragraph 4: Services of general economic interest;
• Paragraph 5: Compliance with legal requirements;
• Paragraph 6: Avoidance of conflict with an international obligation;
• Paragraph 7: Exceptional and compelling reasons of public policy.

Governing Principles Clause: Section 60 of the Competition Act, 1998

The Competition Act prohibitions are modeled upon those contained in Articles 101 and 102 TFEU. To minimise divergence between the application of the respective prohibitions, Section 60 of the Competition Act incorporates into United Kingdom law:

• A governing principle that United Kingdom law should not diverge in its substantive applications from EU law;
• An obligation on national courts and tribunals to ensure consistency of interpretation between the Competition Act, TFEU and established and future jurisprudence of the European courts; and
• A general duty to have regard in determining any matter to any ‘relevant decision or statement’ of the European Commission.

This ‘governing principle’ provision is completely new to English law and is likely to cause difficulties in interpretation as its meaning is not entirely clear.

Section 60(1)

This Section requires United Kingdom authorities and courts to apply United Kingdom competition law on competition questions in a manner consistent with the interpretation and application of the same question in EU law. Moreover, such questions do not include procedural questions. This provision was inserted into the Act in order to ensure that United Kingdom businesses did not have to face the compliance costs of being subject to two similar but differing competition regimes. Much of the interpretation of EU competition law is carried out by the General Court of the Court of Justice of the European Union (CJEU) and the CJEU itself.

This Section provides that whether or not the relevant agreement or conduct affects trade between the Member States. In cases where there is an effect on inter-state trade, the obligation to observe consistency with EU law is reinforced by the Modernisation Regulation. The Modernisation Regulation was a necessary move to re-orientate enforcement of EU competition rules away from the commission towards the Member States and to minimise conflicts between national and EU competition rules. Since the introduction of the Modernisation Regulation, the CMA and the United Kingdom have been vested with a number of powers and responsibilities.

‘So far as is possible’

The phrase ‘so far as is possible’ deals with the scope of this Section. This Section applies to United Kingdom competition law on competition questions, excluding procedural questions. Such questions must be consistent with the interpretation and application of the same question in EU law.

‘Having regard to any relevant differences’

The Office of Fair Trading consultation draft on the Major Provisions of the Act states that the obligation to have regard to ‘relevant differences’ means that there will be certain areas where European Commission legal principles will not be relevant, for example, the objective of establishing a European single market. Thus, relevant differences can be taken into consideration.

Corresponding questions

In cases where there is a close similarity or connection with the competition questions within the European Union, then such questions must be dealt with in a manner that is consistent with the treatment of the European Union.

Questions arising in relation to competition

The goal of consistent interpretation applies ‘in relation to competition’. This begs the question whether the governing principle clause should apply, for example, to procedural matters, or to the general principles of law recognised by the European courts. It is now accepted that Section 60 imports the ‘high-level principle’ as basic procedural safeguards, as well as the specific case law on Articles 101 and 102. Examples of ‘high-level principles’ are:

• Equality;
• Legal certainty;
• Legitimate expectations;
• Proportionality;
• Privilege against self-incrimination.

Section 60(2) and (3)

These subsections discuss the duty of consistency, decisions or statements of the Commission and the Court of Justice.

The duty of consistency

The Competition Act imposes a positive obligation on national courts and tribunals, including the Competition and Markets Authority, when determining a question under the Competition Act to ensure that there is no inconsistency between the following:

• Their decisions;
• The relevant principles;
• Decisions of the European courts.

Having regard to decisions or statements of the Commission

The United Kingdom courts are not only guided by the European courts but are also required to have regard to any relevant decision or statement of the commission. The following points can be noted in relation to this:

• Unlike the obligation in relation to the court decisions, there is no absolute obligation on United Kingdom courts and tribunals to ensure consistency between national decisions and decisions or statements of the commission. rather these will be of persuasive authority only.
• The Competition Act is silent in relation to statements by European institutions other than the Commission. A national court could, nonetheless, clearly have regard to minutes of Council meetings or report of Parliamentary debates if it considered theses of relevance to the case at hand.
• The reference to the ‘statements’ of the Commission encompasses, for example:

1. Notices on Interpretation;
2. Competition Policy Reports;
3. Guidance (including that on enforcement policies);
4. Bulletins;
5. Press Releases.

References to the Court of Justice

Under subsection (2) and (3), ‘court’ refers to any court or tribunal. However, the Court of Justice has the following relevance under this Section:

• Consistency of interpretation: Article 267 of TFEU allows national courts to request preliminary rulings from the Court of Justice of the European Union on matters of EU law. In relation to particularly difficult cases involving the interpretation of the Competition Act prohibitions on which there is no existing authority at the EU level, the United Kingdom government is of the view that a reference to the CJEU under Article 267 TFEU is open to the CMA. CJEU has itself confirmed that it has jurisdiction to rule on the interpretation of national law in appropriate cases in so far as the national law directly incorporates or mirrors the provisions of EU law.
• European Commission proceedings: The Commission initiate formal proceedings in relation to an agreement or conduct that affects interstate trade, this automatically relieves the competence of the CMA and United Kingdom courts to apply Article 101 or 102 in that case. The Modernisation Regulation imposes a specific duty on courts to refrain from making a decision which may conflict with a decision contemplated by the Commission. This may require the court to stay proceedings or to refer questions for a preliminary ruling to the European Court of Justice (ECJ) under article 267 of TFEU.

The Competition Act in Practice

Appeals against infringement decisions

Several infringement decisions have been appealed to CAT. Most of them were upheld on substance. This can be better understood with the help of an example, that is, JJB Sports PLC v Office of Fair Trading. In this case, some of the findings of infringements were set aside for want of evidence in Football shirts and in the Construction bid-rigging appeals. The only infringement decision to have been overturned in its entirety was Attheraces. The OFT had concluded that the collective selling by the Racecourse Association of the non-licensed betting office (‘non-LBO’) media rights to horse racing at 59 racecourses in Great Britain infringed the Chapter 1 prohibition and that it did not satisfy the criteria of section 9(1) of the Competition Act, which provided a defence for restrictive agreements that produce economic efficiencies. The Racecourse Association (and the British Horseracing Board) appealed to the CAT, which disagreed with the OFT’s analysis. The CAT held that the OFT had failed to define the relevant market correctly. The OFT had defined a market for non-LBO media rights, but the CAT considered that this was too narrow. Thus, the CAT concluded that this was a sufficient reason in itself to set the decision aside. However, the CAT went on to consider whether assuming that the OFT had correctly defined the relevant market where collective selling amounted to an infringement of  Chapter I prohibition. It was then concluded by the CAT that collective selling was necessary since there was no other economic way of selling the media rights in question.

Appeals against non-infringement and case-closure decisions

On several occasions third party complaints have challenged decisions by one of the United Kingdom competition authorities to close the file before the CAT. The CAT has sometimes held that the authority has decided that the prohibitions in the Act had not been infringed and made an implicit non-infringement decision. However, in several cases the CAT found that the authority had closed the files on administrative grounds, without expressing a view on the substance and therefore its decision could not be appealed to the CAT.

Sectoral regulators

There have been the following two findings of an infringement by a sectoral regulator:

1. English Welsh & Scottish Railway; and 
2. Fine imposed on National Grid by OFGEM.

There have been three cases in which a regulator closed its file on the basis of legally-binding commitments given by the parties. In 2012 the Government announced its intention to retain the concurrency provisions but to improve the way in which they operate in practice. These changes were introduced by the Enterprise and Regulatory Reform Act, 2013.

The CMA has entered into a ‘Concurrency Memorandum of Understanding’ with each of the sectoral regulators. The CMA is required to prepare an annual report on how the concurrency arrangements have operated, if concurrency operates in an unsatisfactory manner, however, the Secretary of State may make an order removing the competition powers from a sectoral regulator.

Conclusion

It can be concluded that the Competition Act 1998 is an exhaustive Act dealing with the nuances of competition in the United Kingdom. It can also be seen that the past experience of the market has an effect on consumers, businesses, and competitors. Thus, the Government takes into consideration various factors for the welfare of all the parties.

References

• https://financial-dictionary.thefreedictionary.com/Fair+Trading+Act+1973
• https://books.google.co.in/books?id=3HMsCgAAQBAJ&pg=PA343&lpg=PA343&dq=provisions+for+voidness+under+competition+act+1998&source
• https://turkishlawblog.com/read/article/122/concerted-practices-in-the-context-of-eu-competition-law
• https://gowlingwlg.com/en/insights-resources/articles/2016/impact-of-brexit-on-eu-competition-law/?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original
• http://www.mondaq.com/uk/x/532874/Trade+Regulation+Practices/Brexit+the+impact+on+EU+competition+law
• https://uk.practicallaw.thomsonreuters.com/8-100-9454?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1

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