Competition Act 1998

The Competition Act 1998 prohibits any agreement, business practice or conduct which has, or could have, a damaging effect on competition in the United Kingdom. This includes abuse by a company which uses its dominant position in a way that harms competition. Where conduct has an effect on trade between member states we will apply Articles 101 and 102 of the Treaty on the Functioning of the European Union.

We have extensive powers to investigate companies believed to be involved in anti-competitive activities.

The Act is also enforced by the CMA. In relation to the railway industry, we hold concurrent powers and will generally lead in the investigation of rail related matters. The exception to this is criminal 'cartels' which are investigated by the CMA and the Serious Fraud Office.

Prohibitions under the Competition Act 1998

The Competition Act 1998 prohibits:

  • agreements between undertakings (busineses) or decisions of associations of undertakings (e.g. trade associations), and concerted practices which have, as their object or effect, the prevention, restriction or distortion of competition within the United Kingdom (or any part of it) and which may affect trade in the United Kingdom. This is known as the Chapter I Prohibition; and
  • conduct by one or more undertakings amounting to the abuse of a dominant position in a market which may affect trade within the United Kingdom. This is known as the Chapter II Prohibition.

Some examples that may indicate anti-competitive behaviour include:

  • a major supplier has suddenly decided, for no apparent reason, to discontinue supplying you with a product;
  • quotes from various suppliers are surprisingly and unusually similar;
  • a major supplier will only sell you a product if you buy an unconnected product; or
  • on entering a market, you find that a major competitor has responded by dropping its prices to extremely low levels, which you suspect would not cover its costs.

The fact that a company is engaged in any of the behaviour shown in the examples above does not mean that it has necessarily broken the law. This will depend on the circumstances of the case.

Under the Competition Act 1998, the Chapter I prohibition is breached only where the agreement or arrangement in question has an appreciable effect on competition. The Chapter II prohibition is breached only where the undertaking engaged in the conduct in question is in a dominant position within the market in question and has abused that position. In some cases the behaviour in question may be a perfectly legitimate response to rigorous competition in the market.

Guidance

We have published guidance pdf icon PDF, 326 Kb on our approach to the enforcement of the Competition Act 1998 in relation to the supply of services relating to railways. We exercise our functions under the Act concurrently with the Competition and Markets Authority (CMA), which has also published guidance on competition law.

Reporting a breach of competition law

Please see our page on reporting a breach of competition law.