Business Decision Making: Analysis of UK Monopoly and Competition Laws

This report provides an overview of UK monopoly and anti-competitive practice legislation, focusing on the Competition Act 1998 and the Enterprise Act 2002. It outlines the role of the Competition Commission in regulating mergers and monopolies, and explains how dominant positions are defined within the EU common market, providing relevant examples. The report further considers instances where exemptions are made to potentially anti-competitive practices under EU law, such as collective bargaining, underwriting of insurance and securities, and activities related to exports. The content covers key aspects of competition law, market dominance, and regulatory frameworks, providing a comprehensive analysis of the legal landscape affecting business decision-making in the UK and the EU.

BUSINESS
DECISION
MAKING

Introduction
• This section begins with identifying the legal rules of monopoly. Apart
from this anti competitive practice legislation is discussed in detail. role of
competition commission within the context of monopolies and anti-
competitive practices is discussed in detail in the relevant section of PPT.

Content page
• Outline and explain the monopolies and anti-competitive practice legislation
in the UK- Slide 4.
• Explain the role of competition commission within the context of monopolies
and anti-competitive practices-Slide 6.
• Define dominant positions within the EU common market giving examples of
such businesses- Slide 8.
• Consider instances when under EU law, exemptions will be made to
potentially anti- competitive practices-Slide 10.

Outline and explain the monopolies and anti-competitive practice
legislation in the UK
• As we know that competition is very important for any firms to sustain in the market.
But apart from competition monopolies are the serious threat to the UK market. A
company enjoys its monopoly position when he acquires the 25% share in the market.
Mainly after merger, the position becomes stronger. In UK the main legislation
regulating the competitive laws are the Competition Act 1998 and Enterprise Act
2002. In the competition Act, is basically deals with the provisions of the anti-
competitive practices. Anti-competitive practices are those which aims at reducing the
competition in the market. This can include Dumping, Exclusive dealing, price fixing,
limiting the price etc. In the enterprise act 2002. Apart from this, the office of fair
trading comes under the Enterprise act 2002.

Continue
• It deals with not only the mergers but also the matters related to the
insolvency. If any individuals forms cartels or price rigging are considered
to be under the criminal prosecution and considered to be serious offences.
The penalties varies from six months and fine whatever is applicable. This
was formed to stop the harm the people which is caused to them. This was
aimed at increasing the productivity of the business and the enterprise which
will benefit the entire economy. On one hand competition is considered to
be very important but when the industries misuse their competitive spirit it
leads to the criminal liabilities.

Explain the role of competition commission within the context of
monopolies and anti-competitive practices
• The competition commission was set up in 1998. It was established to regulate mergers and
the monopoly power which replaced the Monopolies and Mergers Commission. It deals with
the issues pertaining to and by Office of Fair Trading (OFT). The work of giving
recommendations is that of competition commission and enforcement of rules of rules is done
by OFT and the government. Whether the mergers are in public interest to not following
points have to be looked upon which are the local monopolies, the market share of the new
firm, industry's economies of scale and research and development's importance. Competition
commission being an independent public body which conducts in-death inquiries in the
markets, mergers and the major regulation of industries in order to endure healthy competition
between UK companies in for the benefit of companies, economy and customers.

Continue
• Its main role is to avoid the anti-competitive arrangements in the country
and maintaining the healthy and competitive spirit among the various
competitors in the market. Competitive commission aims at maintaining
fair trading among the various players in the market. It gives decisions to
the parties with the matters related to mergers, market investigation etc.
The individuals which are not satisfied with the decisions given by the
regulatory bodies can further appeal and their grievances can be further
handled by the competition commission.

Define dominant positions within the EU common market
giving examples of such businesses
A firm who has the dominant position in the market can standstill in the
market. It does not require any support. Its huge market share is enough to stay
independent in the market. The firms having the dominant position makes it
differentiated form the competitors and can sell its individual products even at
higher prices than those of competitors. Under the competition law, it is never
illegal to hold a dominant position, infect its considered good as dominant
position is achieved when the company produces a better and innovative
product. It’s not necessary that only one firm can enjoy the dominant position
in the market. It can be enjoyed by two or more than to firms.

Continue
• The company which enjoys the dominant position helps in the economic
development as it results in the economies of scale. Some examples of companies
having a dominant position are Barclays, Citi group etc. The companies are such
that they do not have any competitors in the industry and thus enjoy the dominant
position in the market. Whenever there is a formation of a new company after
merger and the resultant company so formed created more than 25% of market
share the that matter is automatically referred to competition commission. Further
the OFT can see the matters, if any company is misusing its powers like if they are
forming collusion, predatory pricing, vertical restraints, collusive tendering etc.

Consider instances when under EU law, exemptions will be made to
potentially anti- competitive practices
• Apart from the competition, there are various anti-competitive practices which
are exempted from any legal actions. These are a task of negotiating wages by
the group of persons of the trade unions from the employer and many
conditions of employment is known as collective bargaining. This is allowed to
meet the needs of the people in the organization and providing better working
conditions in the workplace. Another way which is exempted under the anti-
competitive practices is the underwriting of the insurance and the securities. It
is the way of guarantying the issue from the person known as underwriter who
gives the guarantee that in the non-issue of the securities and the insurance.

Continue
Another is if the anti-competitive agreement is formed for the sole
purpose of the exports then that will be allowed. Like for example in the article 5
of the Farmers Association Act, if the activates which are related to the farmers
and the fisherman affairs may jointly engage in the operation of these activities.
So these activates has been effectively granted by the statutory bodies. Another
example, Architects act article 37 allowed that the architects assertion to form
the rules to govern the architects business and also the remuneration of the
architects. Hence this price collusion was previously considered illegal by the
law but now they are provided with the exception from the anti-trust liability.

REFERENCES
• Alemani, E. and et.al., 2016. New Indicators of Competition Law and Policy
in 2013 for OECD and non-OECD Countries. In Competition Law
Enforcement in the BRICS and in Developing Countries (pp. 59-102).
Springer International Publishing.
• Bosworth, D.L., 2014. Intellectual property rights. Elsevier.
• Haucap, J. and Heimeshoff, U., 2014. Google, Facebook, Amazon, eBay: Is
the Internet driving competition or market monopolization?. International
Economics and Economic Policy. 11(1-2). pp.49-61.
• Shelanski, H.A., 2013. Information, innovation, and competition policy for
the Internet. University of Pennsylvania Law Review. pp.1663-1705.