Competition Law Analysis: Business Law Report - Unit 26

This report delves into the realm of business law, specifically focusing on competition and anti-competitive legislation in the UK and EU. It outlines key statutes such as the Competition Act 1998, the Enterprise Act 2002, the Restrictive Trade Practices Act 1976, and the Fair Trading Act 1973, highlighting their roles in prohibiting cartels, abuse of dominance, and restrictive trade practices. The report examines the role of the Competition and Markets Authority (CMA) in investigating mergers, studying markets, and enforcing consumer protection laws. It defines market dominance and its implications, noting that while dominance itself isn't anti-competitive, exploiting it to hinder competition is. The report also touches upon the EU's stance on abuse of dominance, exemplified by the case against Google, and discusses exemptions to anti-competitive practices under the Block Exemption Regulation. This report provides a comprehensive overview of the legal framework governing competition, offering valuable insights for students of business law.

BUSINESS LAW

Monopolies and Anti-competitive legislation
Some of the specific legislation which currently operate to in
the nation to govern anti-competitive and monopolistic
practices are:
 The Competition Act 1998
The statute was enacted to prohibit formation of cartel, abuse
of dominance and other concerted practices in the form of
price fixing, term fixing and carving up (Hang and Nairn,
2014).
 The Enterprise Act, 2002
The act purported to amend the Competition Act and further
strengthen the position as well as powers to regulate the
operations of the market. The Act also specifically provides
for assessment of mergers, criminalization of cartels.

 Restrictive Trade Practices Act 1976
This statute has been enacted for dealing with agreements which
have the effect of restricting individuals or entities to freely compete
with each other.
 Fair Trading Act 1973
This act specifically regulates the mergers and the activities in the
nature of abusing the monopoly power being exercised by an
organization in the market.
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Role of Competition and Market Authority
The Competition and Markets Authority (CMA) was launched
in April 2014 and is currently acting as one of the key
regulators for watching anti-competitive practices in the
market. CMA has been formed as a result of merger of
Office of Fair Trading (OFT) and Competition Commission.
The primary role of this regulator is
 to investigate the cases of mergers which have the potential
to restrict competition.
 It is also involved in undertaking studies as well as
investigation of markets with a suspicion on consumer
problems.

 Ascertain cases which have acted in breach of competition laws
under UK or EU or entered into agreements with similar intention.
 In the event it is determined that certain organizations have
indulged in the offence of formation of cartel, CMA can commence
criminal proceedings against them.
 Further, the body is responsible for enforcing consumer
protections laws and co-operate with regulators of individuals
sectors of market.
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Defining Dominant Position
Dominance is the position which is enjoyed by organizations having
majority or the entire market share, along with the power determine its
own prices and policies. Market dominance is a measure which
indicates the power or strength of a particular brand, product or
organization in comparison to other offerings available in market.
 Dominant position may also be enjoyed jointly by more than one entity,
though operating independently may have economic links.
 It is important to note that occupying a dominant position in not anti-
competitive, however the act of exploiting this position to hamper
competition in the market is abusive.
 In the year 2015, European Union has accused Google to be engaged
in abuse of dominance on the basis of allegation that it gives
preference to its products in the search results, thereby stifling the
competition. The case is till under consideration and a final decision
has not been declared on the issue..

Exemptions to Anti-competitive practices
European Union provides for a specific Block Exemption
Regulation in pursuance to which the following requirements shall
be satisfied to exempt the agreement:
 The concerned agreement shall make a contribution for improving
the distribution channel or production of goods. It is an effort for
promoting technical or economic status.
 In result of the agreement, consumers are given a significant share
of the profits or benefits.
 The contracting parties involved are not imposed with
disproportionate restrictions

Any agreement which falls under Block Exemption Regulation shall
be deemed to be in compliance with these requirements. Thus, in
pursuance to the same vertical agreements formed by entities
operating at varied levels shall specifically make efforts to be in
compliance with these requirements and fall under the exemption
block.
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