Business practices that restrict competition in the UK or elsewhere in the EU may be illegal. If you suspect a business is acting in an anti-competitive way, you can report them to the Office of Fair Trading (OFT).
This includes anti-competitive agreements, and businesses that abuse a dominant market position.
Examples of agreements which can be anti-competitive include:
- price-fixing (agreeing with any other business on a minimum price to sell goods or services at)
- limiting production to drive up prices
- if 2 contracts are put out to tender, agreeing with your competitor to only bid on 1 each
- agreeing not to sell to a competitor’s customers or compete against them in a certain area
If 2 or more competitors make agreements like these, it might constitute a ‘cartel’.
Read more information about fair competition and cartels on the OFT website.
An anti-competitive agreement doesn’t have to be formal, written down or even discussed to be illegal.
‘Shared understandings’, ‘gentleman’s agreements’ and ‘concerted practices’ that restrict competition can also be illegal. Concerted practices are where businesses cooperate without actually reaching an agreement or decision.
Abusing a dominant market position
This includes anti-competitive practices, eg a business with a large market share imposing unfair prices on customers or suppliers.
Your business could be sued or fined if it enters into an anti-competitive agreement or abuses a dominant market position. If you enter into a cartel agreement you could receive an unlimited fine or a prison sentence of up to 5 years.
Your business could be fined up to 10% of its turnover and company directors could be disqualified.
Report anti-competitive behaviour
The OFT investigates claims of anti-competitive behaviour. Contact them if you suspect a business is involved in anti-competitive practices.