Policy paper

2010 to 2015 government policy: competition law

Updated 8 May 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/preventing-and-reducing-anti-competitive-activities. Current policies can be found at the GOV.UK policies list.

Issue

Competitive markets are the best way of making sure a country’s resources are put to their best use. They encourage enterprise and widen choice for consumers.

Anti-competitive activities can develop in any economy. They can harm consumers and stifle innovation and growth.

An example of an anti-competitive activity would be when 2 companies agree to charge the same price for a similar product. This protects the companies’ profits but means consumers get less choice.

Anti-competitive activities can be very bad for consumers. That’s why they have to be identified and stopped as quickly as possible.

One of the government’s 3 growth objectives is that the UK should become the best place to start, finance and grow a business. Reforming and improving the laws on anti-competitive activities is a major part of this work.

Actions

Changing competition law

The government has reformed the laws that cover competition and anti-competitive activities in business, including those relating to mergers, markets and illegal activities such as price-fixing and cartels.

We’ve also reformed the institutions that police competition and anti-competitive activities, and strengthened their powers.

These laws, institutions and powers are collectively known as the competition regime.

We’ve produced a guide to the competition regime if you’d like to know more.

European Union merger regime

As well as mergers which take place in the UK (domestic mergers), larger mergers that affect several member states are investigated and regulated by the European Commission. The Commission is looking at how to reform its existing regime in a white paper. We will be responding to the white paper later in 2014.

Competition landscape

We’ve made changes to the organisations that deal with competition and anti-competitive activities in business. The new regime started in April 2014. This work is part of the Consumer and competition landscape reforms.

Setting up a new watchdog for the grocery industry

We’ve created a new watchdog for the grocery industry. The Groceries Code Adjudicator gives suppliers, including farmers supplying the bigger supermarket chains, more protection against anti-competitive activities.

Making legal challenges easier

We’re looking at ways to make it easier for consumers and small businesses to challenge anti-competitive behaviour by bringing a legal challenge (also known as a private action) against anti-competitive activities.

State aid

We’re modernising the rules on state aid.

State aid is when a public body (such as a local authority) or publicly funded body (such as the Big Lottery) provides a business, charity or other organisation with financial help that could give them an advantage over another business. This kind of financial help is generally outlawed by the European treaty, as it’s an anti-competitive practice. State aid regulations set legal ways to give this kind of help.

We’ve produced a detailed guide on state aid for public authorities.

Different rules - also covered in the detailed guide - apply to agriculture, aquaculture, fisheries, transport and maritime.

Background

UK competition law has to comply with EU law. Article 101 of the Treaty on the Functioning of the European Union (TFEU) bans any agreements between businesses ‘which have as their object… the prevention [or] restriction… of competition within the common market.’

Appendix 1: making legal challenges easier

This was a supporting detail page of the main policy document.

Anti-competitive activity can harm consumers and businesses. Taking legal action (also known as a private action) against anti-competitive behaviour can be costly for small firms and individual consumers. We published the government response to the consultation on ‘Private Actions in Competition Law’ in January 2013. The government is introducing a range of reforms as part of the Consumer Rights Bill.

Competition Appeal Tribunal (CAT)

We will expand the CAT’s role by giving it powers over a wider range of competition cases. These will include a fast track regime to make it easier for smaller businesses to challenge anti-competitive behaviour that is harming them.

Opt-out

We will introduce a limited opt-out collective actions regime for private actions. This will allow an action to be brought on behalf of consumers and businesses that are affected by the breach of competition law. The CAT will decide whether a case is suitable for the opt-out regime.

Alternative Dispute Resolution (ADR)

Though it’s essential that those who breach competition law can be taken to court if need be, ADR can offer an alternative route to redress. We want to encourage businesses and consumers to settle their differences without involving the legal system. We will promote ADR so that legal action becomes the option of last resort.

Appendix 2: Groceries Code Adjudicator

This was a supporting detail page of the main policy document.

The government has established the Groceries Code Adjudicator. The adjudicator - Christine Tacon - ensures that large retailers treat their direct suppliers lawfully and fairly, by enforcing the Groceries Supply Code of Practice.

The code came into force in 2010. It applies to large retailers, specifically supermarket chains with a groceries turnover of more than £1 billion. It says that they should:

• deal with their suppliers fairly
• not vary trade agreements retrospectively
• pay suppliers within a reasonable time

The Groceries Code Adjudicator can:

• arbitrate disputes between retailers and suppliers
• investigate complaints from suppliers
• name and shame retailers who break the rules
• impose fines in the worst cases

The Groceries Code Adjudicator Act received Royal Assent on 25 April 2013.