The Competition Act 1998 generally becomes law from 1 March 2000, though some provisions have already been brought into force.
The Act prohibits anti-competitive agreements between businesses, and an abuse of dominant position, which may be committed by one business acting alone. It ends the practice whereby many forms of innocent arrangement need registering. It also makes complaining easier, and allows for greater penalties. These now run from when the illicit arrangement started rather than when detected. It also makes it possible to bring an action for anti-competitive practice. Penalties can be as high as 10% of annual turnover. Details of the Act are given in Boardroom Briefing 122.
The Act allows a party to an agreement to apply to the Director General of Fair Trading for a ruling on whether an agreement may be regarded as an anti-competitive practice or is an abuse of dominant position. The Director’s Rules state the procedures for such rulings by the Director General of Fair Trading.
The basic procedure is for the applicant to complete two copies of form N from the Office of Fair Trading with any supporting documentation. This must be accompanied by a fee of £5,000 for an application for guidance; or £13,000 for an application for a decision.
All decisions by the Director General of Fair Trading are published, and may be inspected at the office between 10am and 4.30pm on any working day, or on the office’s website.
The regulations specify the procedures for decisions and guidance, and the implications of them. It also covers when such decisions and guidance may be withdrawn. They also cover time limits, confidential information and similar matters. Appendices give the forms and a list of information required by applicants.
The Competition Act 1998 (Director’s rules) Order SI 2000 No 293
Rules have also been issued about the Competition Commission Appeal Tribunal.
Some amendments have been made to the original Act about the exact scope of excluded agreements and appealable decisions.
Separate regulations exclude land and vertical arrangements from the prohibition on anti-competitive agreements.
Another set of regulations sets certain limits. The small agreements limit (section 39(1) of the Act) is where the combined applicable turnover does not exceed £20 million. The conduct of minor significance limit (section 40(1) of the Act) is where the annual turnover does not exceed £50 million.
For the purpose of these limits and in determining penalties, turnover is defined in regulations.
Regulations allow the Director General of Fair Trading to work with other regulators. This is known as concurrency.
The Competition Commission Appeal Tribunal Rules SI 2000 No 261
The Competition Act 1998 (Notification of Excluded Agreements and Appealable Decisions) Regulations SI 2000 No 263
The Competition Act 1998 (Land and Vertical Agreements Exclusion) Order SI 2000 No 310
The Competition Act 1998 (Small Agreements and Conduct of Minor Significance) Regulations SI 2000 No 262
The Competition Act 1998 (Determination of Turnover for Penalties) Order SI 2000 No 309
The Competition Act 1998 (Concurrency) Regulations SI 2000 No 260
[2000]