Competition Act 1998

Overview

Why competition is important

Open and vigorous competition is good for consumers because it results in lower prices, new products of a better quality and more choice. It is also good for fair-dealing businesses, which flourish when markets are competitive.

The laws on anti-competitive behaviour

In the UK anti-competitive behaviour is prohibited in two main ways:

Anti-competitive agreements (e.g. cartels ) between businesses are prohibited by Chapter I of the Competition Act 1998 (CA98) and Article 81 of the EC Treaty

Abuse of a dominant position in a market is prohibited by Chapter II of CA98 and Article 82 of the EC Treaty.

The laws contained in the CA98 and Articles 81 and 82 of the EC Treaty are similar but not the same: the CA98 prohibits anti-competitive behaviour that affects trade in the UK. Articles 81 and 82 prohibit anti-competitive behaviour that affects trade in the EU.

In enforcing the competition laws, the OFT cooperates with other competition authorities.

Enforcement by the OFT

The Office of Fair Trading has a wide range of powers to investigate businesses suspected of breaching these laws and we can take enforcement action, for example ordering that offending agreements or conduct be stopped.

Businesses that break the law can be fined up to 10% of their worldwide turnover and third parties (including injured competitors, customers and consumer groups) can bring damages claims against them. In addition, individuals found to be involved in cartels can be fined and imprisoned for up to five years and directors of companies that breach the prohibitions can be disqualified for up to 15 years.

Appeals against our decisions are heard by the Competition Appeal Tribunal (CAT). Third parties (such as a competitor or customer) can also take action in the courts to stop anti-competitive behaviour and/or seek damages.

What businesses can do

In addition to its own research and market intelligence, the OFT relies on complaints to help us in enforcing competition law.

The OFT runs a leniency programme for businesses that come forward with information about a cartel in which they are involved.

Businesses that comply with competition law will also avoid the serious consequences of non-compliance.

Concurrency

Competition law is enforced in the UK principally by the OFT. However, in certain regulated industries, the sector regulators have concurrent powers to apply and enforce CA98 and Articles 81 and 82.

Publications and further information

The OFT has published a range of material on the Competition Act to assist businesses and members of the public. 

Competition Pro Bono Scheme

The OFT cannot investigate all the complaints that it receives. Before submitting a complaint to the OFT, a complainant may wish to seek independent legal advice. The Competition Pro Bono Scheme is one such option, offering some free legal advice to individuals and businesses who believe that their rights under competition law have been infringed or who are concerned that they may be infringing.

Visit the Competition Pro Bono Scheme  website. Please note: by providing this link, the OFT should not be seen to be endorsing the Pro Bono Scheme, the member advisers or the advice provided.  

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