Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

Section 2 of the Act, (Chapter I prohibition), regulates collusive behavior between undertakings. Section 2(1) prohibits agreements, decisions by associations of undertakings, and concerted practices which may affect trade within the UK, and have as their object or effect the prevention, restriction, or distortion of competition in the UK. The Act fails to develop these concepts, preferring instea …

The prohibition

Section 2 of the Act, (Chapter I prohibition), regulates collusive behavior between undertakings. Section 2(1) prohibits agreements, decisions by associations of undertakings, and concerted practices which may affect trade within the UK, and have as their object or effect the prevention, restriction, or distortion of competition in the UK. The Act fails to develop these concepts, preferring instead to refer to the interpretation given to these notions under EU law (Section 60).

Taking its cue from Article 101 TFEU, Section 2(2) lists unacceptable behavior as including:

- directly or indirectly fixing purchase or selling prices or any other trading conditions;

- limiting or controlling production, markets, technical developments or investments;

- applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

- making the conclusion of contracts conditional on the other party's acceptance of supplementary conditions.

The prohibition in Section 2 is only applicable when the agreement results in an appreciable restriction on competition. Interestingly, this appreciability requirement is not expressly contained in the Act but applies pursuant to Section 60, which, as we have seen, will bring into play EU case-law on this issue. Following OFT's (Office of Fair Trading - whose competition functions have been taken over by the Competition and Markets Authority - CMA) Guidelines 401 (§ 2.18-2.22), an agreement has no appreciable effect on competition where the undertakings' share of the relevant market is lower than 25%. This threshold is much higher than the EU standard. However, the exception may not apply if the agreement is one of a large number of similar agreements that together have a cumulative anticompetitive effect. Even where the parties' combined share is higher than 25%, the CMA may find that the effect of the agreement on competition is not appreciable. This analysis is carried out on a case-by-case basis. As in EU law, price-fixing, market-sharing or bid-rigging agreements, agreements that impose discriminatory terms or conditions and tying clauses are considered especially noxious, and the CMA will apply a lower threshold for agreements of this kind. Moreover, small agreements (i.e. non price-fixing agreements made by parties where combined turnover does not exceed £20 million (EUR 21.9 million) are unlikely to be prohibited by Chapter I, the parties being in any event immune from penalties (Section 39).

Schedules 1 to 3 of the Act provide for certain exclusions from the prohibition, including, inter alia:

- merger agreements, including any ancillary restraints; this exception equally applies to mergers coming within the EU Merger Regulation;

- the transfer of a newspaper or of newspaper assets for the purposes of the FTA (Fair Trading Act) 1973;

- agreements which are subject to scrutiny in respect of anticompetitive behavior under other Acts, including, inter alia, the Financial Services and Markets Act 2000, the Companies Act 1989, the Broadcasting Act 1990 or the Environmental Act 1995;

- undertakings entrusted with operating services of general economic interest.

Furthermore, the Secretary of State for Trade and Industry (SoS) may exclude a particular agreement from the Chapter I prohibition for “exceptional compelling reasons of public policy”.

According to Section 2(4) of the 1998 Act, agreements prohibited pursuant to the Act are considered void. If only some provisions of an agreement infringe the Act, and if such provisions can be severed from the agreement, only those provisions will be void.

Prohibited agreements may be exempted where they provide countervailing benefits. The exemption criteria are close to those of Article 101(3) TFEU.

Under Section 4 of the Act, an individual exemption may be granted, after notification to the CMA, where the anticompetitive consequences of the agreement are outweighed by its beneficial effects. Individual exemptions may be granted where several conditions are met: the agreement must improve the production or distribution of goods or services or promote technical or economic progress, and it must allow consumers a fair share of the resulting economic benefit. Moreover, the agreement must not impose restrictions that are not essential to achieving the agreement's objective and must not enable the parties to eliminate competition affecting a substantial part of the products concerned (Section 9). Pursuant to Section 5(1), the CMA may cancel an individual exemption or alternatively vary its conditions and obligations if there are reasonable grounds to believe there has been a material change in circumstance since the exemption was granted.

Under Section 6 of the Act, provision is made for enabling the Secretary of State to adopt block exemptions applicable to categories of agreements that meet established exemption criteria. An agreement that falls within a category named in the block exemption will be automatically exempted without being notified to the CMA. A block exemption may have retrospective effect. To date, only one block exemption order, concerning transportation ticketing schemes, has been adopted (Order 2001, SI 2001/319 lastly amended by Order 2016, SI 2016/126 to extend its application until March 2026).

Pursuant to section 10 of the Competition Act 1998, an entirely new concept referred to as a parallel exemption was introduced into UK competition law. Under this procedure, an agreement is considered automatically exempt from Chapter I prohibition if it benefits from individual or block exemption under Article 101(3) TFEU. The CMA has the power to subject a parallel exemption to conditions or obligations.

There is no statutory requirement to notify agreements or conduct to the CMA. A particularity of UK law is that it made provision for two types of notification, namely:

- notification for a decision (Sections 12 through 16).

Regulation No 2004/1261, applicable from 1 May 2004, put UK legislation in line with the modernization of competition law brought about by EU Regulation No 1/2003, by promoting self-assessment of their agreements by undertakings and stating that Sections 12 to 16 shall cease to have effect.

After Brexit, a number of EU block exemption regulations relating to vertical agreements, horizontal agreements (research and development and specialization agreements), motor vehicles, liner consortia and technology transfers - among other areas - have been transposed into UK domestic law as preserved EU law. 

Global Competition Law

1386. The prohibition

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

1386. The prohibition

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise