What is prohibited?

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Anti-competitive agreements

Chapter I of the CA98 and Article 81 prohibit agreements between businesses that prevent, restrict or distort competition or are intended to do so and which affect trade in the UK and/or EU.

Agreements likely to be prohibited include those which:

• fix the prices to be charged for goods or services
• limit production
• carve up markets
• discriminate, e.g. between customers (e.g. charge different prices or impose different terms where there is no difference in what is being supplied).

Decisions of associations of businesses are also covered, as are concerted practices (i.e. cooperation which falls short of an agreement or decision).

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Cartels

Cartels are the most serious form of anti-competitive agreement. They are agreements between businesses not to compete with each other. Cartel agreements can often be verbal and may be hard to uncover.

For further information, see Cartels.

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Abuse of a dominant market position

Chapter II of CA98 and Article 82 prohibit a business which holds a dominant position in a market from abusing that position.

A dominant position in a market essentially means that a business is generally able to behave independently of competitive pressures, such as other competitors, in that market.

Conduct which may be considered an abuse by a business in a dominant position includes:

• charging excessively high prices
• limiting production
• refusing to supply an existing long standing customer without good reason
• charging different prices to different customers where there is no difference in what is being supplied
• making a contract conditional on factors that have nothing to do with the subject of the contract.

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Exclusions and exemptions

CA98 and Articles 81 and 82 may not apply to some categories of agreement and conduct because they are instead subject to examination under other laws. Alternatively, agreements (but not conduct) may be exempt because they meet certain requirements set out in legislation and are considered not to be anti-competitive. These exclusions and exemptions are explained in detail in the guidelines Agreements and concerted practices and Abuse of a dominant position.

An agreement that does not fall within any of the excluded or exempt categories may still be lawful if it falls within the 'legal exception' regime. Further details can be found in the guideline Agreements and concerted practices.

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Self-assessment and guidance

It is for businesses themselves to determine whether or not their agreements and/or conduct comply with competition law. However, the OFT and the European Commission both publish guidance to assist businesses in this respect.

The OFT also offers confidential informal advice to businesses on the application of the law and, where a case raises a novel or unresolved issue about the law, we may decide to publish written guidance in the form of an Opinion for the benefit of a wider audience.

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Further information

Further information is available in our publication Cartels and the Competition Act 1998 and in our more detailed guidelines Modernisation, Agreements and concerted practices and Abuse of a dominant position.

Back to: Competition Act 1998