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Competition Act 1998 (c. 41)

(The document as of February, 2008)

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Competition Act 1998

1998 CHAPTER 41

ARRANGEMENT OF SECTIONS

Content
  1. Part I

    Competition

    1. Chapter I

      Agreements

      1. Introduction

        1. 1. Enactments replaced.

      2. The prohibition

        1. 2. Agreements etc. preventing, restricting or distorting competition.

      3. Excluded agreements

        1. 3. Excluded agreements.

      4. Exemptions

        1. 4. Individual exemptions.

        2. 5. Cancellation etc. of individual exemptions.

        3. 6. Block exemptions.

        4. 7. Block exemptions: opposition.

        5. 8. Block exemptions: procedure.

        6. 9. The criteria for individual and block exemptions.

        7. 10. Parallel exemptions.

        8. 11. Exemption for certain other agreements.

      5. Notification

        1. 12. Requests for Director to examine agreements.

        2. 13. Notification for guidance.

        3. 14. Notification for a decision.

        4. 15. Effect of guidance.

        5. 16. Effect of a decision that the Chapter I prohibition has not been infringed.

    2. Chapter II

      Abuse of Dominant Position

      1. Introduction

        1. 17. Enactments replaced.

      2. The prohibition

        1. 18. Abuse of dominant position.

      3. Excluded cases

        1. 19. Excluded cases.

      4. Notification

        1. 20. Requests for Director to consider conduct.

        2. 21. Notification for guidance.

        3. 22. Notification for a decision.

        4. 23. Effect of guidance.

        5. 24. Effect of a decision that the Chapter II prohibition has not been infringed.

    3. Chapter III

      Investigation and Enforcement

      1. Investigations

        1. 25. Director's power to investigate.

        2. 26. Powers when conducting investigations.

        3. 27. Power to enter premises without a warrant.

        4. 28. Power to enter premises under a warrant.

        5. 29. Entry of premises under warrant: supplementary.

        6. 30. Privileged communications.

        7. 31. Decisions following an investigation.

      2. Enforcement

        1. 32. Directions in relation to agreements.

        2. 33. Directions in relation to conduct.

        3. 34. Enforcement of directions.

        4. 35. Interim measures.

        5. 36. Penalty for infringing Chapter I or Chapter II prohibition.

        6. 37. Recovery of penalties.

        7. 38. The appropriate level of a penalty.

        8. 39. Limited immunity for small agreements.

        9. 40. Limited immunity in relation to the Chapter II prohibition.

        10. 41. Agreements notified to the Commission.

      3. Offences

        1. 42. Offences.

        2. 43. Destroying or falsifying documents.

        3. 44. False or misleading information.

    4. Chapter IV

      The Competition Commission and Appeals

      1. The Commission

        1. 45. The Competition Commission.

      2. Appeals

        1. 46. Appealable decisions.

        2. 47. Third party appeals.

        3. 48. Appeal tribunals.

        4. 49. Appeals on point of law etc.

    5. Chapter V

      Miscellaneous

      1. Vertical agreements and land agreements

        1. 50. Vertical agreements and land agreements.

      2. Director's rules, guidance and fees

        1. 51. Rules.

        2. 52. Advice and information.

        3. 53. Fees.

      3. Regulators

        1. 54. Regulators.

      4. Confidentiality and immunity from defamation

        1. 55. General restrictions on disclosure of information.

        2. 56. Director and Secretary of State to have regard to certain matters in relation to the disclosure of information.

        3. 57. Defamation.

      5. Findings of fact by Director

        1. 58. Findings of fact by Director.

      6. Interpretation and governing principles

        1. 59. Interpretation.

        2. 60. Principles to be applied in determining questions.

  2. Part II

    Investigations in relation to Articles 85 and 86

    1. 61. Introduction.

    2. 62. Power to enter premises: Commission investigations.

    3. 63. Power to enter premises: Director's special investigations.

    4. 64. Entry of premises under sections 62 and 63: supplementary.

    5. 65. Offences.

  3. Part III

    Monopolies

    1. 66. Monopoly investigations: general.

    2. 67. Offences.

    3. 68. Services relating to use of land.

    4. 69. Reports: monopoly references.

  4. Part IV

    Supplemental and Transitional

    1. 70. Contracts as to patented products etc.

    2. 71. Regulations, orders and rules.

    3. 72. Offences by bodies corporate etc.

    4. 73. Crown application.

    5. 74. Amendments, transitional provisions, savings and repeals.

    6. 75. Consequential and supplementary provision.

    7. 76. Short title, commencement and extent.

  5. Schedules:

    1. Schedule 1

      Exclusions: Mergers and Concentrations.

      1. Part I

        Mergers.

      2. Part II

        Concentrations subject to EC controls.

    2. Schedule 2

      Exclusions: Other Competition Scrutiny.

      1. Part I

        Financial Services.

      2. Part II

        Companies.

      3. Part III

        Broadcasting.

      4. Part IV

        Environmental Protection.

    3. Schedule 3

      General Exclusions.

    4. Schedule 4

      Professional Rules.

      1. Part I

        Exclusion.

      2. Part II

        Professional Services.

    5. Schedule 5

      Notification under Chapter I: Procedure.

    6. Schedule 6

      Notification under Chapter II: Procedure.

    7. Schedule 7

      The Competition Commission.

      1. Part I

        General.

      2. Part II

        Performance of the Commission's General Functions.

      3. Part III

        Appeals.

      4. Part IV

        Miscellaneous.

      5. Part V

        Transitional provisions.

    8. Schedule 8

      Appeals.

      1. Part I

        General.

      2. Part II

        Rules.

    9. Schedule 9

      Director's Rules.

    10. Schedule 10

      Regulators.

      1. Part I

        Monopolies.

      2. Part II

        The Prohibitions.

      3. Part III

        The Prohibitions: Northern Ireland.

      4. Part IV

        Utilities: Minor and Consequential Amendments.

      5. Part V

        Minor and Consequential Amendments: Northern Ireland.

    11. Schedule 11

      Interpretation of Section 55.

    12. Schedule 12

      Minor and Consequential Amendments.

    13. Schedule 13

      Transitional Provisions and Savings.

      1. Part I

        General.

      2. Part II

        During the Interim Period.

      3. Part III

        On the Starting Date.

      4. Part IV

        On and After the Starting Date.

      5. Part V

        The Fair Trading Act 1973.

      6. Part VI

        The Competition Act 1980.

      7. Part VII

        Miscellaneous.

    14. Schedule 14

      Repeals and Revocations.

      1. Part I

        Repeals.

      2. Part II

        Revocations.

An Act to make provision about competition and the abuse of a dominant position in the market; to confer powers in relation to investigations conducted in connection with Article 85 or 86 of the treaty establishing the European Community; to amend the Fair Trading Act 1973 in relation to information which may be required in connection with investigations under that Act; to make provision with respect to the meaning of "supply of services" in the Fair Trading Act 1973; and for connected purposes.

[9th November 1998]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:--



Part I Competition

Chapter I Agreements

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Introduction

1 Enactments replaced

The following shall cease to have effect--

(a) the Restrictive Practices Court Act 1976 (c. 33),

(b) the Restrictive Trade Practices Act 1976 (c. 34),

(c) the Resale Prices Act 1976 (c. 53), and

(d) the Restrictive Trade Practices Act 1977 (c. 19).



The prohibition

2 Agreements etc. preventing, restricting or distorting competition

(1) Subject to section 3, agreements between undertakings, decisions by associations of undertakings or concerted practices which--

(a) may affect trade within the United Kingdom, and

(b) have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom,

are prohibited unless they are exempt in accordance with the provisions of this Part.

(2) Subsection (1) applies, in particular, to agreements, decisions or practices which--

(a) directly or indirectly fix purchase or selling prices or any other trading conditions;

(b) limit or control production, markets, technical development or investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(e) make 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 such contracts.

(3) Subsection (1) applies only if the agreement, decision or practice is, or is intended to be, implemented in the United Kingdom.

(4) Any agreement or decision which is prohibited by subsection (1) is void.

(5) A provision of this Part which is expressed to apply to, or in relation to, an agreement is to be read as applying equally to, or in relation to, a decision by an association of undertakings or a concerted practice (but with any necessary modifications).

(6) Subsection (5) does not apply where the context otherwise requires.

(7) In this section "the United Kingdom" means, in relation to an agreement which operates or is intended to operate only in a part of the United Kingdom, that part.

(8) The prohibition imposed by subsection (1) is referred to in this Act as "the Chapter I prohibition".



Excluded agreements

3 Excluded agreements

(1) The Chapter I prohibition does not apply in any of the cases in which it is excluded by or as a result of--

(a) Schedule 1 (mergers and concentrations);

(b) Schedule 2 (competition scrutiny under other enactments);

(c) Schedule 3 (planning obligations and other general exclusions); or

(d) Schedule 4 (professional rules).

(2) The Secretary of State may at any time by order amend Schedule 1, with respect to the Chapter I prohibition, by--

(a) providing for one or more additional exclusions; or

(b) amending or removing any provision (whether or not it has been added by an order under this subsection).

(3) The Secretary of State may at any time by order amend Schedule 3, with respect to the Chapter I prohibition, by--

(a) providing for one or more additional exclusions; or

(b) amending or removing any provision--

(i) added by an order under this subsection; or

(ii) included in paragraph 1, 2, 8 or 9 of Schedule 3.

(4) The power under subsection (3) to provide for an additional exclusion may be exercised only if it appears to the Secretary of State that agreements which fall within the additional exclusion--

(a) do not in general have an adverse effect on competition, or

(b) are, in general, best considered under Chapter II or the [1973 c. 41.] Fair Trading Act 1973.

(5) An order under subsection (2)(a) or (3)(a) may include provision (similar to that made with respect to any other exclusion provided by the relevant Schedule) for the exclusion concerned to cease to apply to a particular agreement.

(6) Schedule 3 also gives the Secretary of State power to exclude agreements from the Chapter I prohibition in certain circumstances.



Exemptions

4 Individual exemptions

(1) The Director may grant an exemption from the Chapter I prohibition with respect to a particular agreement if--

(a) a request for an exemption has been made to him under section 14 by a party to the agreement; and

(b) the agreement is one to which section 9 applies.

(2) An exemption granted under this section is referred to in this Part as an individual exemption.

(3) The exemption--

(a) may be granted subject to such conditions or obligations as the Director considers it appropriate to impose; and

(b) has effect for such period as the Director considers appropriate.

(4) That period must be specified in the grant of the exemption.

(5) An individual exemption may be granted so as to have effect from a date earlier than that on which it is granted.

(6) On an application made in such way as may be specified by rules under section 51, the Director may extend the period for which an exemption has effect; but, if the rules so provide, he may do so only in specified circumstances.

5 Cancellation etc. of individual exemptions

(1) If the Director has reasonable grounds for believing that there has been a material change of circumstance since he granted an individual exemption, he may by notice in writing--

(a) cancel the exemption;

(b) vary or remove any condition or obligation; or

(c) impose one or more additional conditions or obligations.

(2) If the Director has a reasonable suspicion that the information on which he based his decision to grant an individual exemption was incomplete, false or misleading in a material particular, he may by notice in writing take any of the steps mentioned in subsection (1).

(3) Breach of a condition has the effect of cancelling the exemption.

(4) Failure to comply with an obligation allows the Director, by notice in writing, to take any of the steps mentioned in subsection (1).

(5) Any step taken by the Director under subsection (1), (2) or (4) has effect from such time as may be specified in the notice.

(6) If an exemption is cancelled under subsection (2) or (4), the date specified in the notice cancelling it may be earlier than the date on which the notice is given.

(7) The Director may act under subsection (1), (2) or (4) on his own initiative or on a complaint made by any person.

6 Block exemptions

(1) If agreements which fall within a particular category of agreement are, in the opinion of the Director, likely to be agreements to which section 9 applies, the Director may recommend that the Secretary of State make an order specifying that category for the purposes of this section.

(2) The Secretary of State may make an order ("a block exemption order") giving effect to such a recommendation--

(a) in the form in which the recommendation is made; or

(b) subject to such modifications as he considers appropriate.

(3) An agreement which falls within a category specified in a block exemption order is exempt from the Chapter I prohibition.

(4) An exemption under this section is referred to in this Part as a block exemption.

(5) A block exemption order may impose conditions or obligations subject to which a block exemption is to have effect.

(6) A block exemption order may provide--

(a) that breach of a condition imposed by the order has the effect of cancelling the block exemption in respect of an agreement;

(b) that if there is a failure to comply with an obligation imposed by the order, the Director may, by notice in writing, cancel the block exemption in respect of the agreement;

(c) that if the Director considers that a particular agreement is not one to which section 9 applies, he may cancel the block exemption in respect of that agreement.

(7) A block exemption order may provide that the order is to cease to have effect at the end of a specified period.

(8) In this section and section 7 "specified" means specified in a block exemption order.

7 Block exemptions: opposition

(1) A block exemption order may provide that a party to an agreement which--

(a) does not qualify for the block exemption created by the order, but

(b) satisfies specified criteria,

may notify the Director of the agreement for the purposes of subsection (2).

(2) An agreement which is notified under any provision included in a block exemption order by virtue of subsection (1) is to be treated, as from the end of the notice period, as falling within a category specified in a block exemption order unless the Director--

(a) is opposed to its being so treated; and

(b) gives notice in writing to the party concerned of his opposition before the end of that period.

(3) If the Director gives notice of his opposition under subsection (2), the notification under subsection (1) is to be treated as both notification under section 14 and as a request for an individual exemption made under subsection (3) of that section.

(4) In this section "notice period" means such period as may be specified with a view to giving the Director sufficient time to consider whether to oppose under subsection (2).

8 Block exemptions: procedure

(1) Before making a recommendation under section 6(1), the Director must--

(a) publish details of his proposed recommendation in such a way as he thinks most suitable for bringing it to the attention of those likely to be affected; and

(b) consider any representations about it which are made to him.

(2) If the Secretary of State proposes to give effect to such a recommendation subject to modifications, he must inform the Director of the proposed modifications and take into account any comments made by the Director.

(3) If, in the opinion of the Director, it is appropriate to vary or revoke a block exemption order he may make a recommendation to that effect to the Secretary of State.

(4) Subsection (1) also applies to any proposed recommendation under subsection (3).

(5) Before exercising his power to vary or revoke a block exemption order (in a case where there has been no recommendation under subsection (3)), the Secretary of State must--

(a) inform the Director of the proposed variation or revocation; and

(b) take into account any comments made by the Director.

(6) A block exemption order may provide for a block exemption to have effect from a date earlier than that on which the order is made.

9 The criteria for individual and block exemptions

This section applies to any agreement which--

(a) contributes to--

(i) improving production or distribution, or

(ii) promoting technical or economic progress,

while allowing consumers a fair share of the resulting benefit; but

(b) does not--

(i) impose on the undertakings concerned restrictions which are not indispensable to the attainment of those objectives; or

(ii) afford the undertakings concerned the possibility of eliminating competition in respect of a substantial part of the products in question.

10 Parallel exemptions

(1) An agreement is exempt from the Chapter I prohibition if it is exempt from the Community prohibition--

(a) by virtue of a Regulation,

(b) because it has been given exemption by the Commission, or

(c) because it has been notified to the Commission under the appropriate opposition or objection procedure and--

(i) the time for opposing, or objecting to, the agreement has expired and the Commission has not opposed it; or

(ii) the Commission has opposed, or objected to, the agreement but has withdrawn its opposition or objection.

(2) An agreement is exempt from the Chapter I prohibition if it does not affect trade between Member States but otherwise falls within a category of agreement which is exempt from the Community prohibition by virtue of a Regulation.

(3) An exemption from the Chapter I prohibition under this section is referred to in this Part as a parallel exemption.

(4) A parallel exemption--

(a) takes effect on the date on which the relevant exemption from the Community prohibition takes effect or, in the case of a parallel exemption under subsection (2), would take effect if the agreement in question affected trade between Member States; and

(b) ceases to have effect--

(i) if the relevant exemption from the Community prohibition ceases to have effect; or

(ii) on being cancelled by virtue of subsection (5) or (7).

(5) In such circumstances and manner as may be specified in rules made under section 51, the Director may--

(a) impose conditions or obligations subject to which a parallel exemption is to have effect;

(b) vary or remove any such condition or obligation;

(c) impose one or more additional conditions or obligations;

(d) cancel the exemption.

(6) In such circumstances as may be specified in rules made under section 51, the date from which cancellation of an exemption is to take effect may be earlier than the date on which notice of cancellation is given.

(7) Breach of a condition imposed by the Director has the effect of cancelling the exemption.

(8) In exercising his powers under this section, the Director may require any person who is a party to the agreement in question to give him such information as he may require.

(9) For the purpose of this section references to an agreement being exempt from the Community prohibition are to be read as including references to the prohibition being inapplicable to the agreement by virtue of a Regulation or a decision by the Commission.

(10) In this section--

  • "the Community prohibition" means the prohibition contained in--

    (a)

    paragraph 1 of Article 85;

    (b)

    any corresponding provision replacing, or otherwise derived from, that provision;

    (c)

    such other Regulation as the Secretary of State may by order specify; and

  • "Regulation" means a Regulation adopted by the Commission or by the Council.

(11) This section has effect in relation to the prohibition contained in paragraph 1 of Article 53 of the EEA Agreement (and the EFTA Surveillance Authority) as it has effect in relation to the Community prohibition (and the Commission) subject to any modifications which the Secretary of State may by order prescribe.

11 Exemption for certain other agreements

(1) The fact that a ruling may be given by virtue of Article 88 of the Treaty on the question whether or not agreements of a particular kind are prohibited by Article 85 does not prevent such agreements from being subject to the Chapter I prohibition.

(2) But the Secretary of State may by regulations make such provision as he considers appropriate for the purpose of granting an exemption from the Chapter I prohibition, in prescribed circumstances, in respect of such agreements.

(3) An exemption from the Chapter I prohibition by virtue of regulations under this section is referred to in this Part as a section 11 exemption.



Notification

12 Requests for Director to examine agreements

(1) Sections 13 and 14 provide for an agreement to be examined by the Director on the application of a party to the agreement who thinks that it may infringe the Chapter I prohibition.

(2) Schedule 5 provides for the procedure to be followed--

(a) by any person making such an application; and

(b) by the Director, in considering such an application.

(3) The Secretary of State may by regulations make provision as to the application of sections 13 to 16 and Schedule 5, with such modifications (if any) as may be prescribed, in cases where the Director--

(a) has given a direction withdrawing an exclusion; or

(b) is considering whether to give such a direction.

13 Notification for guidance

(1) A party to an agreement who applies for the agreement to be examined under this section must--

(a) notify the Director of the agreement; and

(b) apply to him for guidance.

(2) On an application under this section, the Director may give the applicant guidance as to whether or not, in his view, the agreement is likely to infringe the Chapter I prohibition.

(3) If the Director considers that the agreement is likely to infringe the prohibition if it is not exempt, his guidance may indicate--

(a) whether the agreement is likely to be exempt from the prohibition under--

(i) a block exemption;

(ii) a parallel exemption; or

(iii) a section 11 exemption; or

(b) whether he would be likely to grant the agreement an individual exemption if asked to do so.

(4) If an agreement to which the prohibition applies has been notified to the Director under this section, no penalty is to be imposed under this Part in respect of any infringement of the prohibition by the agreement which occurs during the period--

(a) beginning with the date on which notification was given; and

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