The Competition Act 1998

The Competition Act came into force on 1st March 2000. The act addresses two key areas of anti-competitive behaviour:

Anti-competitive agreements
Abuse of dominant market position

The Act was partly introduced as a result of continued allegations of "rip-off" Britain in areas such as retail sales, particularly by the leading supermarkets and car manufacturers.

The Act will be enforced by the Director General of Fair Trading, however the utility regulators will also have the same enforcement powers in their respective industries.

Anti-Competitive Agreements
The Act prohibits agreements which are intended to or have the effect of, "preventing, restricting or distorting competition in the UK". The Act also covers situations where there is no actual agreement, but where the actions of trade associations or companies acting together has the same effect.

Abuse of Dominant Position
The Act also prohibits the abuse of a dominant position in the UK or part of the UK. Such actions include, "limiting production, markets or technical development to the detriment of the consumer".

Penalties
The Act is intended to address behaviour or practices that have an "appreciable effect on competition".

Fines of up to 10% of UK turnover can be imposed under the Act.

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