A little about competition law…

Competition law allows for fair competition to be maintained between companies and prevents companies taking part in anti-competitive behaviour.

The UK is governed by UK and EU competition laws, and if it’s found that a company has engaged in anti-competitive behaviour, there can be serious consequences. The two common ways in which competition law can be breached is: engaging in anti-competitive agreements; abuse of a dominant market position.

Both can lead to fines for offending companies.

Anti-competitive agreements

An agreement that is made by companies that restricts or manipulates competition within the EU and UK can be classed as anti-competitive agreements that are prohibited by law.

The types of agreements can include:

  • The fixing of purchase or selling prices
  • The limit or control of a market through its production or technical development
  • Agreeing to share market resources
  • Agreements that have different conditions depending who it is

Abuse of a dominant market position

If a company holds the dominant position within a particular market, it could act against the spirit of competition to the detriment of competitors and consumers. Just because a company does hold the dominant position does not mean it is breaching competition law, but behaviour that could breach competition law can include:

  • Refusing to supply a service or grant access to a service
  • Imposing unfair trading terms
  • Making a buyer purchase some or all of their products from a second purchase if they wish to purchase one thing
  • Imposing unfair trade terms of being exclusive as to who is being sold to

Consequences

The consequences for engaging in anti-competitive behaviour like this can include:

  • Fines of up to 10% of their global turnover
  • Actions by third parties against them such as claiming for damages if it can be shown a loss occurred due to the anti-competitive behaviour
  • Individuals being disqualified from being a company director
  • An injunction can be enforced
The content of this post/page was considered accurate at the time of the original posting and/or at the time of any posted revision. The content of this page may, therefore, be out of date. The information contained within this page does not constitute legal advice. Any reliance you place on the information contained within this page is done so at your own risk.
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