Abstract
The Competition Act 1998 is a statute exclusively concerned with competition law, which takes effect across the entirety of the United Kingdom. It is not the only statute that concerns competition law—the other major piece of primary legislation is the Enterprise Act 2002, which contains the UK’s merger control rules, rules on market studies and investigations and creates a criminal “cartel offence”, as well as rules on the investigation and enforcement of certain consumer law matters. The Consumer Rights Act 2015 reforms the UK’s regime for private actions in competition law and expands the jurisdiction of the Competition Appeal Tribunal to hear stand-alone actions for damages.
The author is grateful to the Competition Law Association’s working group on Question A on 3rd June 2015 for its valuable comments and input. Any errors remain the author’s own.
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Notes
- 1.
Since 1 April 2016, Monitor is now part of “NHS Improvement”. See: https://www.gov.uk/government/news/monitor-is-now-part-of-nhs-improvement and https://improvement.nhs.uk/. A recent example of a super-complaint concerned grocery pricing—pricing practices that had the potential to confuse or mislead consumers, and so possibly breach consumer law (but not necessarily Chapter II). See: https://www.gov.uk/cma-cases/groceries-pricing-super-complaint.
- 2.
These provisions of the Fair Trading Act 1973 were repealed by the Competition Act 1998.
- 3.
See for example the Competition Commission investigation into BAA Airports, which examined—amongst other things—whether the common ownership by BAA of seven UK airports created an adverse effect on competition. The Commission required the divestiture of Gatwick, Stansted and either Edinburgh or Glasgow airports as a remedy. See: http://webarchive.nationalarchives.gov.uk/20100111133411/http://www.competition-commission.org.uk/rep_pub/reports/2009/fulltext/545.pdf.
- 4.
The CMA describes itself as an independent non-ministerial department: https://www.gov.uk/government/organisations/competition-and-markets-authority/about.
- 5.
Section 26(1) and (2) of the Enterprise and Regulatory Reform Act 2013, with effect from 1 April 2014.
- 6.
Section 54 of the Competition Act 1998.
- 7.
Ofcom is the successor to five separate communications regulators including the Director General of Telecommunications, which is referred to below and which previously had concurrent competition powers.
- 8.
In this chapter, I refer to the CMA to represent the UK authorities generally, but in relation to specific cases I use the name of the actual regulator that took the decision.
- 9.
Health and Social Care Act 2012, section 72.
- 10.
CMA10 (March 2014).
- 11.
OFT 417 (February 2000).
- 12.
OFT 428 (January 2005).
- 13.
OFT 430 (October 2005).
- 14.
OFT 422 (March 2010).
- 15.
See, for example, those between the CMA and: the Northern Ireland Authority for Utility Regulation (May 2014); the Financial Conduct Authority (June 2014); the Civil Aviation Authority (June 2014), the Water Services Regulation Authority (June 2014) and with Ofcom (June 2014).
- 16.
For example, Ofgem, Enforcement guidelines on complaints and investigations (June 2012); Ofcom Enforcement Guidelines: Ofcom’s guidelines for the handling on competition complaints and complaints concerning regulatory rules (July 2012); and Monitor Enforcement Guidance (28 March 2013).
- 17.
For example, Ofwat, Prioritisation Principles: application to the Competition Act 1998 (September 2010).
- 18.
See the Competition Law Practice Direction, stated to be up to date to 10 September 2013 but not reflecting Treaty of Lisbon numbering changes or recent UK competition reform legislation: http://www.justice.gov.uk/courts/procedure-rules/civil/rules/competitionlaw_pd.
- 19.
See OFT 428 (Application in the energy sector) at §§2.7-2.8.
- 20.
Ibid, §2.9. Contrast, OFT 430 (Application to services relating to railways) at §§3.5-3.11, where ORR states that “[a]s a general principle, therefore, ‘the protection of competition in the market’ is not the predominant objective for the ORR under the Railways Act. Generally speaking, ORR’s duties under the Railways Act do not have the same objectives as Articles [101] and [102]. Consequently, ORR’s Railways Act powers fall outside Article 3 of the Modernisation Regulation.”
- 21.
- 22.
See Schedule 14 of the Enterprise and Regulatory Reform Act 2013; paragraph 4.1 of CMA10 Regulated Industries, Guidance on Concurrent Application of Competition Law to Regulated Industries, March 2014; and the relevant sectoral legislation e.g. section 94(10) Communications Act 2003; section 28(4A) Gas Act 1986 etc.
- 23.
This scheme was repealed by the Competition Act 1998, although limited parts of the rest of the Act remain in force.
- 24.
An office created by the Fair Trading Act 1973, which continued until its functions were transferred—under the Enterprise Act 2002—to the Office of Fair Trading.
- 25.
The Monopolies and Mergers Commission carried out detailed investigations of matters referred to it. It was established as the Monopolies and Restrictive Practices Commission in 1949, and its powers evolved until its functions were transferred—by section 45 of the Competition Act 1998—to the Competition Commission.
- 26.
Competition Act 1998, section 60 (1).
- 27.
Ibid., Section 60 (2).
- 28.
-
(1)
Section 18 of the Competition Act 1998 reads as following: “Subject to section 19, any conduct on the part of one or more undertakings which amounts to the abuse of a dominant position in a market is prohibited if it may affect trade within the United Kingdom.
-
(2)
Conduct may, in particular, constitute such an abuse if it consists in –
-
a.
directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
-
b.
limiting production, markets or technical development to the prejudice of consumers;
-
c.
applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; press enter making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of the contract.
-
a.
-
(3)
In this section –
“dominant position” means a dominant position within the United Kingdom; and “the United Kingdom” means the United Kingdom or any part of it.
-
(4)
The prohibition imposed by subsection (1) is referred to in this Act as “the Chapter II prohibition.”
-
(1)
- 29.
Although some cases have involved small markets, the CMA’s need to prioritise the use of its resources and the difficulty of attracting funding for litigation may reduce the number of “smaller” cases. See for example paragraph 1.3 of CMA16 Prioritisation Principles for the CMA, April 2014: “We therefore focus our efforts and resources on deterring and influencing behaviour that poses the greatest threat to consumer welfare, and intervene in order to protect consumer welfare and, in the process, drive higher productivity growth.”
- 30.
Case No. CA98/01/2008 Cardiff Bus, OFT decision of 18 November 2008.
- 31.
Case No. CA98/05/2004 First Edinburgh/Lothian, OFT decision of 29 April 2004.
- 32.
Case No. 1044/2/1/04 M.E. Burgess, J. J. Burgess and S. J. Burgess (trading as J.J. Burgess & Sons) v The Office of Fair Trading [2005] CAT 25.
- 33.
Ibid, §§175 and 180.
- 34.
Section 40 of the Competition Act 1998.
- 35.
The Competition Act 1998 (Small Agreements and Conduct of Minor Significance) Regulations 2000 (SI 2000/262).
- 36.
Ibid. section 40 (4).
- 37.
Ibid. section 40 (7).
- 38.
Abuse of a Dominant Position, OFT 402, December 2004, adopted by the Board of the CMA.
- 39.
Schedule 1 to the Competition Act 1998, Part I, Mergers, para. 2.
- 40.
Council Regulation (EEC) No 139/2004 20 of January 2004 on the control of concentrations between undertakings.
- 41.
Schedule 1 to the Competition Act 1998, Part II, Concentrations subject to EC Controls, paragraph 6 (2).
- 42.
Schedule 3 to the Competition Act 1998, paragraph 4.
- 43.
Ibid. §5.
- 44.
A “legal requirement” is further defined as a requirement:
-
(a)
imposed by or under any enactment in force in the United Kingdom;
-
(b)
imposed by or under the Treaty or the EEA Agreement and having legal effect in the United Kingdom without further enactment; or
-
(c)
imposed by or under the law in force in another Member State and having legal effect in the United Kingdom.
-
(a)
- 45.
Schedule 3 to the Competition Act 1998, paragraph 6 (4).
- 46.
Ibid. §6 (6).
- 47.
Ibid. §7 (4).
- 48.
Ibid, §7 (5).
- 49.
SI 2007/1896.
- 50.
It also covered agreements between two members of the Team's CW or between a member of Team's CW and any other person.
- 51.
SI 2011/2886.
- 52.
ECJ, case 85/76, Hoffman-La Roche v Commission, ECR 1979 461.
- 53.
ECJ, case 62/86, AKZO Chemie BV v Commission [1993] 5 CMLR 215.
- 54.
OFT 402, §5.2.
- 55.
Ibid, §5.3.
- 56.
OFT414a, Assessment of Conduct, Draft competition law guideline for consultation. Available at: http://webarchive.nationalarchives.gov.uk/20140402142426/http://www.oft.gov.uk/shared_oft/business_leaflets/competition_law/oft414a.pdf.
- 57.
Para. 1.2.
- 58.
Para. 2.4.
- 59.
Section 60 of the Competition Act 1998 (as amended) reads:
-
(1)
The purpose of this section is to ensure that so far as is possible (having regard to any relevant differences between the provisions concerned), questions arising under this Part in relation to competition within the United Kingdom are dealt with in a manner which is consistent with the treatment of corresponding questions arising in Community law in relation to competition within the Community.
-
(2)
At any time when the court determines a question arising under this Part, it must act (so far as is compatible with the provisions of this Part and whether or not it would otherwise be required to do so) with a view to securing that there is no inconsistency between-
-
a.
the principles applied, and decision reached, by the court in determining that question; and
-
b.
the principles laid down by the Treaty and the European Court, and any relevant decision of that Court, as applicable at that time in determining any corresponding question arising in Community law.
-
a.
-
(3)
The court must, in addition, have regard to any relevant decision or statement of the Commission.
-
(4)
Subsections (2) and (3) also apply to-
-
a.
the CMA; and
-
b.
any person acting on behalf of the CMA, in connection with any matter arising under this Part.
-
a.
-
(5)
In subsections (2) and (3), “court” means any court or tribunal.
-
(6)
In subsections (2)(b) and (3), “decision” includes a decision as to-
-
a.
the interpretation of any provision of Community law;
-
b.
the civil liability of an undertaking for harm caused by its infringement of Community law.
-
a.
-
(1)
- 60.
OJ 2009 C 45.
- 61.
Purple Parking Limited (1), Meteor Parking Limited (2) v Heathrow Airport Limited [2011] EWHC 987 (Ch). Judgment of 15 April 2011at §95.
- 62.
ECJ, case 27/76, United Brands v Commission of the European Communities, ECR 1978 207.
- 63.
Albion Water Limited v Water Services Regulation Authority [2008] CAT 31.
- 64.
Attheraces Ltd and Anr v British Horse Racing Board and Anr [2007] EWCA Civ 38.
- 65.
Attheraces goes further on this point than EU case law at present.
- 66.
[2011] EWHC 352 (Ch), judgment of 24 February 2011.
- 67.
Case No. CA98/2/2001 Napp Pharmaceutical Holdings Limited and Subsidiaries, OFT decision of 30 March 2001.
- 68.
ECJ, AKZO v Commission; case 62/86 ECR I-3359 as reaffirmed in ECJ, case 333/94P Tetra Pak International SA v Commission of the European Communities, ECR I-5951.
- 69.
Aberdeen journals Ltd v The Office of Fair Trading [2003] CAT 11.
- 70.
Ibid., §§ 357–358.
- 71.
Op. cit. at footnote 27, §56.
- 72.
ECJ, case 202/07 France Telecom SA v Commission, ECR I-2369.
- 73.
Case No. 1001/1/1/01, Napp Pharmaceutical Holdings Limited and Subsidiaries v DGFT. Judgment of 15 January 2002.
- 74.
Op. Cit. at footnote 27.
- 75.
Article 3(1) of Regulation 1/2003.
- 76.
Note that the Court of Justice’s ruling on a preliminary reference in ECJ, case 375/09, Prezes Urzędu Ochrany Konkurencji I Konsumentor v. Tele2 Polska sp. Zoo, [2011] 5 CMLR2, confirmed that a national competition authority is not competent to declare that unilateral anti-competitive conduct does not infringe Article 102, but merely that it has “no grounds for action” where the conditions for prohibition are not met. See Article 5, second sentence, Regulation 1/2003. Cf. the ORR’s prior (August 2010) “non-infringement” decision in DB Schenker Rail (UK) Limited, covering both Chapter II and Article 102.
- 77.
English Wales and Scottish Railways, Decision of the Office of Rail Regulation, 17 November 2006.
- 78.
Op. Cit. at footnote 26.
- 79.
Case No. MPINF-PSWA001, Alleged abuse of a dominant position by Flybe Limited.
- 80.
DB Schenker Rail (UK) Limited, Decision of the Office of Rail Regulation, 2 August 2010, §8.
- 81.
Case No. CE/9322/10, IDEXX Laboratories Limited. OFT decision of November 2011.
- 82.
See in particular: BT UK—SPN (2003); BT Openworld (2003); Vodafone, O2, Orange, T-Mobile (2004); BT Together (2004), BT 0845 and 0870 (2004); BT Wholesale calls (2004); NCCN 500 (2008); BT’s Residential Broadband Pricing (2010); BT/Thus (2012) and BT TalkTalk (2013); also Electricity North West (2012—Ofgem). BT/Thus was an interesting case where Ofcom found a technical margin squeeze—a negative margin on its wholesale calls—but insufficient evidence of anti-competitive effect.
- 83.
Op. Cit. at footnote 57.
- 84.
Case No. C3/03/98, Genzyme. OFT Decision of 27 March 2003.
- 85.
Case No: CA98/20/2002, BskyB, OFT Decision of 17 December 2002.
- 86.
Op Cit. at footnote 74.
- 87.
Op. Cit. at footnote 74.
- 88.
Case No: CE/1604-02, Walkers Snacks. OFT case closure Decision of 3 May 2007.
- 89.
Op. Cit. at footnote 69.
- 90.
Case No: CA98/STG/06, National Grid. OFGEM Decision of 21 February 2008.
- 91.
Certas Energy UK Ltd, CMA Decision of 24 June 2014.
- 92.
Case No: CA98/09/2003, BetterCare Group Ltd/North & West Belfast Health & Social Services Trust. OFT Decision of 18 December 2003.
- 93.
Ibid. at § 58.
- 94.
Op. Cit. at footnote 28.
- 95.
Op. Cit. at footnote 28, §311.
- 96.
Case No. CA98/07/2003, E.I.DuPont de Numours & Company and Op. Graphics (Holography) Limited. OFT Decision of 9 September 2003.
- 97.
Ibid. §29.
- 98.
Association of Train Operating Companies (ATOC), ORR Decision of 17 November 2009.
- 99.
Op. Cit. at footnote 61.
- 100.
[2013] EWHC 264 (Ch).
- 101.
Op. Cit. at footnote 78. On appeal: Genzyme Limited v Office of Fair Trading, CAT judgment of 11 March 2004 [2004] CAT 4.
- 102.
Investigation by the Director General of Telecommunications (‘the Director’) into alleged anti-competitive practices by British Telecommunications plc (‘BT’) in relation to its BT Broadband product, Oftel decision, 11 July 2003.
- 103.
Case CW/604/03/03, Oftel decision 23 December 2003, BT publishing its 118500 directory enquiries number on the front of the BT phonebook.
- 104.
Ofgem decision, 17 December 2004.
- 105.
Ofwat decision, 17 January 2013 http://www.ofwat.gov.uk/competition/ca98/pap_pos20130117alcontrol.pdf. Accessed 27 October 2015.
- 106.
Ofwat decision OFW 0006160 of 23 March 2015: Formal investigation under the Competition Act 1998 concerning the price and non-price terms Bristol Water applies when providing services to self-lay organisations.
- 107.
Case No CA98/4/2001, 15 June 2001, Consignia plc and Postal Preference Service Limited, non-confidential version (Case CP/0155-01).
- 108.
See also Claritas (UK) v Post Office, [2001] U.K.C.L.R. 2 in which the High Court refused an application for interim injunctive relief: there was no evidence to suggest that the licensing of the “Royal Mail” brand name and logo in connection with the collection and exploitation of direct mail amounted to an abuse of a dominant position by the Post Office. Also, the link between the market for delivery of mail and the direct mail market was not sufficient to render the direct mail market a relevant market for the purposes of the Chapter II prohibition.
- 109.
Case CE 8931/08, OFT Decision 13 April 2011.
- 110.
OFT Press release 36/13 of 19 April 2013; CMA Press release dated 21 October 2014.
- 111.
[2011] EWHC 352 (Ch), judgment of 24 February 2011. On appeal [2012] EWCA Civ 36, judgment of 27 January 2012.
- 112.
[2013] EWHC 264 (Ch), judgment of 11 February 2013. Judgment on application for interim injunction. [2013] EWCA Civ 1338, judgment of 7 November 2013 Court of Appeal judgment on appeal against previous judgment.
- 113.
[2013] EWHC 2295 (Ch), judgment of 26 July 2013 (application for stay of proceedings and disclosure).
- 114.
[2015] EWHC 647 (Ch), judgment of 12 March 2015.
- 115.
[2013] EWHC 3379 (Ch), judgment of 5 November 2013. Judgment on application for interim injunction.
- 116.
[2014] EWHC 64 (Ch), judgment of 28 January 2014.
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Robinson, J.D.M. (2017). United Kingdom. In: Këllezi, P., Kilpatrick, B., Kobel, P. (eds) Abuse of Dominant Position and Globalization & Protection and Disclosure of Trade Secrets and Know-How. LIDC Contributions on Antitrust Law, Intellectual Property and Unfair Competition. Springer, Cham. https://doi.org/10.1007/978-3-319-46891-4_16
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