Monopolies and Anti competitive legislation in UK

This presentation provides an overview of the main legislation that regulates monopolies and anti competitive practices in the UK. It covers the Competition Act 1998, the Enterprise Act 2002, the Fair Trading Act 1986, and the Enterprise and Regulatory Act 2013.

Business Law
TASK 3

3.1Monopolies and Anti competitive legislation in UK
Monopoly refers to an individual or group of entity who controls the specified
industry or market which provides high cost to the goods or services and
corruption. It comes into existence due to economic barriers, advancement
of technology and no close substitute is available.
The main legislation which regulates Monopolies and Anti competitive
legislation in UK.
The Competition Act 1998
• This act mainly emphasis on prohibiting Anti competitive agreements and
abuse of dominant market position.
• This law prohibits such agreements within the related organisations or
agreements which are not in existence but still prevent, distort or restrict
competition in UK or within the EU and other practices relating to limited
production or supply of goods.

Contd..
The Enterprise Act 2002
• this act mainly emphasised on mergers, cartels, uncompetitive practices by
the industries.
• It has made important changes in the merger so no political interference
can change the merger decision, to disqualification of director in case he is
involved in anti competitive practices.
The Fair Trading Act 1986
• this act protects consumers from unfair practices and misleading done by
the traders. It emphasis on claims of goods and services which are not
purchased by the consumer.
Enterprise and Regulatory Act 2013
• this act is a mixed combination of consumer protection and to prohibit anti
competitive practices in the market.

Contd..
• Competition Commission was responsible for mergers,abuse of dominant
position, fixing price or terms and creating cartels among the industries
and to regulate healthy competition among the industries.
• Competition and Market Authority is required to examine mergers and its
impact, consequences to acknowledge that it doesn't restrict competition. It
also examine anti competitive practices agreements and regulates criminal
proceedings towards the individuals and industries who are involved in
such practices
• It motivates cooperation among the industries who are into related business
for competition among themselves and regulates them with continuous
references and appeals for coordination.

Contd..
• Main goals of Competition and Market Authority is to enhance efficiency,
transparency, accountability in the companies and empowers consumers to
take a stand against the anti competitive practices and to acknowledge
them with understanding of law practices.
• It also focuses on creating a team with people having different professional
backgrounds so that it can provide a trusted competition team as an advisor
to the government.

3.3 Abuse of dominant position
• This circumstances occurs when an enterprise or industry holds the
maximum market share and uses this power to regulate conditions upon the
other industries which in comparison has lower market share.
• So use of power in particular is known as abuse of dominant position.
• The dominant position uses its discretion power on customers, competitors
and relevant market.
• The elements constitute dominate positions are market share and
size,barrier on entry of new enterprise in the market, size of competitors,
dependency of consumers on the goods and services.

Contd..
• There are several factors which determines whether company is in a
dominant position or not.
• One of the basic factor is market share if company is holding maximum
share of 40% or 50% in the market.
• Secondly factors should provide you are determining market forces and
competition including fixation of prices and forming cartels and finally if
the practices of the company can be considered in the abuse of dominant
position.
• But it is not always necessary that company enjoying dominant position is
violating the law it can be seen that it is necessary for them to upgrade their
technology so their products do not become obsolescent.

Contd..
• Under UK Law section II of the Competition Act 1998 governs in case UK
company is included in practice of abuse of dominant position in the UK
market whereas in case.
• UK company practices dominant position on the market which extends UK
territory but on other European Union members then the provisions of
Article 82 of the European Union Treaty governs the industry.

3.4 Exemptions to anti competitive practices under EU law
• Competition laws are enacted so that the customers, buyers and
competitors interest are protected.
• Competition provides a base to industries to provide good quality and
efficient goods at a lower prices with more options to the consumers
• Exemptions to anti competitive practices in European Union can be
possible if it provides benefits to the consumers and do not hamper
competition.
• Example advancement of technology it can be benefit to customers as well
as motivates other competitors to enhance their technology as per the
current scenario and other competitors. .

Contd..
• European Union can provides exemptions in case of small companies who
in total holds not more than 10% of the relevant markets.
• They are provided exemption on the basis that they do not fix prices of
products and do not have dominate position.
• So to increase their growth and market share this industries are provided
exemption.
• The European Union has provided a collection of block exemptions for
different types of exemptions so that they can enhance the productivity,
research and development in the industries
• This block exemptions are for specific contracts which relates to patents,
copyrights, know how licensing, technology collaboration

Contd..
• It also grants exemption in the research and development in the field of
technology, medicines, science, arts and commerce.
• In short exemptions are granted by the EU if they are beneficial in the
public interest.

References
Books and Journal
Armour, J. and Cumming, D., 2008. Bankruptcy law and entrepreneurship.
American Law and Economics Review. 10(2). pp.303-350.
Bently, L. and Sherman, B., 2014. Intellectual property law. Oxford
University Press, USA.
Bovaird, T., 2009. Public management and governance. Taylor & Francis.
Chaffey, D. and White, G., 2010. Business information management:
improving performance using information systems. Pearson Education.
Cheffins, B. R., 2008. Corporate ownership and control: British business
transformed.