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Competition Law & Regulation

Lupton Fawcett are experts at helping businesses of all sizes through the minefield of national, international and EU competition law, ensuring your company remains compliant and in a position to make the most of new opportunities.


In many countries and regions across the world, complex rules and regulations outlaw certain business practices, such as cartels, price fixing, sharing of territories, markets and customers. In the UK and the European Union (EU), these laws are stringently applied by the Office of Fair Trading (OFT) and the European Commission. These regulations also impose conditions on some business mergers, and sometimes outlaw them altogether.

We appreciate that incorporating this level of specialist knowledge into your organisation can seem like a pretty big undertaking - especially when you're busy running a business.

As a result, our competition law specialists provide tailored education and training programs, as well as expert advice exactly when you need it. We help to ensure that all businesses - large or small - have a risk management and compliance programme that is appropriate, and which continually evolves as your business develops.

This ensures that your interests are always protected and your team is in a position to make decisions that drive your business forward.

Talk to us

Speak to our solicitors today for thorough, expert advice on all aspects of competition law. We have three offices across Yorkshire, in Sheffield, Leeds and York – find the number you need here.

Frequently asked questions

What competition laws apply to UK businesses and who enforces them?

UK businesses are subject to both:

  • domestic law in the form of the Competition Act 1998 and the Enterprise Act 2002, and
  • European law in the form of Articles 101 and 102 of the TFEU.

The Competition Act 1998 and the Enterprise Act 2002 are enforced by the Office of Fair Trading (the OFT) and other regulators. Since 1 May 2004, Articles 101 and 102 of the TFEU can be enforced directly by national competition authorities (‘NCA’s') such as the OFT and courts, as well as by the European Commission. There is now a network of NCA's throughout Europe (the ‘European Competition Network’) applying Articles 101 and 102 in full alongside the European Commission.

What types of practice may trigger an investigation under UK law?

In the Competition Act 1998, the ‘Chapter I Prohibition’ outlaws certain agreements or practices which have an appreciable effect on trade in the relevant market (as defined) within the UK. An appreciable effect is usually only produced where the parties' combined market share on that market is significant. A market share of more than 25 percent would be sufficient for competition law compliance to become a risk to manage. There is a de minimis rule which exempts all agreements, except for such clearly anti-competitive arrangements such as price fixing agreements, between undertakings with a relatively low combined applicable turnover and/or low market shares. But nonetheless, the OFT or the EU may investigate such an agreement and make a decision withdrawing this 'small agreement' immunity. The de minimis exemption would not apply to a cartel, which is illegal regardless of how small the parties’ market share is.

Competition law can be relevant to formal and informal, binding and non-binding agreements, including verbal agreements. It also applies to co-operation, or concerted practices, and to decisions and recommendations of trade associations.

The types of agreement and practice which are outlawed as restricting competition include:

  • agreeing to fix prices or other trading conditions
  • agreeing to limit or control production, markets, technical development or investment;
  • agreeing to share markets or supply sources
  • agreeing to make contracts subject to unrelated conditions
  • Agreeing to apply different trading conditions to equivalent transactions thereby placing some parties at a competitive disadvantage.

Price fixing and market sharing are the worst types of agreements and they are usually outlawed regardless of market share, although there are some exemptions (see under what exemptions are there under UK competition law for infringing agreements?). The other types are generally allowed as long as the parties' market shares are below certain thresholds.

What exemptions are there under UK law for infringing agreements?

There are two types of exemption: parallel exemption and block exemption. Parallel exemption means that agreements falling within an EU block exemption (see under ‘What exemptions are there under EU law for infringing agreements?') are also protected from challenge under UK competition law. 

It should be noted that if the agreement or practice is a merger, it will be regulated either EU Merger Regulation or if the merger is based mainly in a Member State then national merger law and regulations may apply such as for the UK under the Enterprise Act 2002 and not the Competition Act 1998. 

What is abuse of a dominant position?

Conduct which amounts to abuse of a dominant position, and which may affect trade in the EU, is made illegal by Article 102 of the TFEU and Chapter II of the Competition Act 1998. Dominant undertakings must not, amongst other things:

  • impose unfair prices
  • refuse to supply
  • limit production or markets/technical development to the prejudice of consumers
  • apply different trading conditions to equivalent transactions, thereby placing certain parties at a competitive disadvantage, or
  • Attach unrelated supplementary conditions to a contract.

Dominance can be presumed where a business has a market share of above 50 per cent of the relevant market. The OFT has said that it is unlikely to consider a business as dominate which has a less than 40 per cent share of the relevant market but this is not a hard and fast rule. For those with les than 50 per cent, dominance will depend on factors such as whether or not the business is able to prevent effective competition being maintained in its market, and whether it has the power to behave independently of its competitors and customers.

What types of practice may trigger an investigation under EU competition law?

Agreements and concerted practices which may have an appreciable effect on trade between EU member states are made illegal by Article 101 of the TFEU. The word 'may' catches agreements which only have a potential effect on trade between member states. The agreement may be between, for example, two undertakings in the UK and still have this potential effect on trade between EU member states. Even agreements with undertakings outside the EU, can effect trade between member states.

The prohibition applies to formal and informal, binding and non-binding agreements, including verbal agreements. It also applies to co-operation, or concerted practices, and to decisions and recommendations of trade associations.

The types of agreement and practice which are outlawed include:

  • agreeing to fix prices or other trading conditions
  • agreeing to limit or control production, markets, technical development or investment
  • agreeing to share markets or supply sources
  • agreeing to make contracts subject to unrelated conditions
  • Agreeing to apply different trading conditions to equivalent transactions thereby placing some parties at a competitive disadvantage.

Price fixing and market sharing are the worst types of agreement and they are usually outlawed regardless of market share. The other types are generally allowed as long as the parties' market shares are below certain thresholds. For the exemptions and thresholds, see under ‘What exemptions are there under EU law for infringing agreements?’

There is a de minimis provision for agreements and practices, not being price fixing agreements, of small undertakings. It is contained in the Commission’s Notice on Agreements of Minor Importance (OJ C368, 22.12.01, p.13).

What exemptions are there under EU law for infringing agreements?

There are many ways that an agreement which may be illegal under competition law can be exempt. For example, there is system of EU block exemptions such as for vertical agreements and technology agreements.

It is possible for an agreement to be exempt under the general exemption under Article 101(3)

This exemption applies to agreements which:

  • contribute to improving production or distribution or to promoting technical or economic progress
  • allow consumers a fair share of the resulting benefits
  • are indispensable to achieving those objectives, and
  • Do not eliminate competition in a substantial part of the products concerned.

Other block exemptions

There is a block exemption on specialisation agreements and another on research and development agreements. 

Most block exemptions have market share thresholds. Typically these are below 30% market share of the relevant market.

How do I calculate market share?

Cartels and agreements which fix prices or partition markets will be prohibited regardless of market share. Other agreements, however, may escape the affects of both domestic and EU competition law by virtue of their being between undertakings with relatively low market shares (for the relevant market share levels, see under ‘ What exemptions are there under EU law for infringing agreements?')

A market is a combination of product and geographic markets, and in some case the technology market.

The product market

This is determined by the substitutability of other products, both on the demand side and the supply side. Ask yourself whether a small (say 10 per cent) but permanent increase in the price of your product would make customers switch to an alternative product. If it would, then your product market should include any such other products.

The geographic market

Ask yourself whether a small (say 10 per cent) but permanent increase in the price of your product would make customers switch to suppliers in an alternative area. If it would, then your geographic market should include any such other areas.

Is it possible to notify the authorities of an agreement to obtain guidance?

No. It is no longer possible to notify the OFT or European Commission of an agreement or practice to obtain guidance or a decision, the emphasis is now on self-assessment. Nevertheless, a complaint may still be made to the OFT, which will, eventually, give its view on whether the agreement complained of infringes the law.

What should I do if I want to stop another person's infringing behaviour?

If you have discovered a cartel, you should ring the OFT’s cartel hotline number which is available from its website at www.oft.gov.uk. If you wish to challenge a restrictive agreement or practice, you can sue in the courts for damages and/or an injunction, and/or you can complain to the European Commission and/or the OFT. A complaint will be the preferred way to challenge a suspected competition law breach as the cost of carrying out a market assessment to support a court case will be prohibitive. 

What powers have the authorities investigating infringements?

The European Commission and the OFT investigate infringements of UK and EU competition law. The European Commission investigates the most serious infringements of EU competition law. The Commission’s powers of investigation are slightly wider than the OFT’s as it is able to search even private homes, if it suspects that a company’s documents are being kept there. The two authorities’ powers are, however, broadly the same and can be briefly summarised as the power to

  • ask businesses in a market to provide information in writing
  • request to enter premises without a warrant
  • enter premises with a warrant
  • request to see and take copies of any document which they consider relates to any matter relevant to the investigation
  • Require any person on the premises to say to the best of his knowledge where any such document may be found and to provide an explanation of it.

Cartels

In respect of criminal cartel activity, the OFT’s powers are much wider. The OFT may gather evidence of cartel activity at any time by informal methods such as enquiries by correspondence. Once the OFT has reasonable grounds for suspecting that a criminal cartel offence has been committed, it may conduct a formal investigation under the Enterprise Act 2002. In a formal investigation, it has, in addition to the power to require persons to answer questions or provide documents, the power to tap telephones and use hidden cameras and informants, amongst other things.

Read more about cartels here.

Who regulates mergers/acquisitions, and what size or kind is regulated?

The European Commission investigates and clears (or not) mergers with a European dimension. The OFT under the Enterprise Act 2002 regulates mergers and acquisitions of the requisite size or nature in the UK.

If the OFT investigates mergers initially, it may be referred to the European Commission. 

Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.

Further reading

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