Business Law Task 3: Analysis of Competition and Market Authority

This business law report, Task 3, delves into the intricacies of UK competition law, examining monopolies, anti-competitive practices, and the role of the Competition and Markets Authority (CMA). The report provides an overview of relevant legislation, including the Competition Act 1998 and the Enterprise Act 2002, and their basis in EU law (Articles 81 and 82). It explains the functions of the Competition Commission and the merger with the UK Office of Fair Trading to form the CMA. The concept of a dominant position within the EU common market is explored, referencing the United Brands case. Additionally, the report covers EU exemptions to potentially anti-competitive practices, such as individual, block, and parallel exemptions. The analysis aims to provide a comprehensive understanding of the legal framework governing competition and market regulation in the UK.

BUSINESS LAW
TASK 3

INTRODUCTION
Laws are framed to protect the customers and investors from
the fraud committed by the company. It is required for the
company to follow the rules and regulations that are under the
act. Business law is also known as commercial law. Laws are
applied on the rights and relations, businesses, trade and sales.
It is formed to provide protection to the customers. Many laws
like sales of goods act, consumer credit agreement and agency,
intellectual property right provide protection to the consumer.

3.1 Monopolies and anti competitive practice legislation in UK
Competition is the essential part for the growth of the business. It is
required to have the effective competition among the business so
that better product and services can be provided to the customers. It
provides growth to the business of country. There are many
opportunities available through the competition. It provides many
benefits to the customers as lower price product.

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Competition law has following sources-
Article 81- It covers anticompetitive agreement. These
agreements are prohibited by the competition law. It is
prohibited because it reduces the competition among the
member state of EU.
Article 82- This article prohibits the abuse of dominant
position. It is totally prohibited because it affects the
competition. This article also restrict the unfair conditions
that may affect the trade in the country.

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Monopolies
It is the serious factor in the UK market that may affect the
businesses in the UK. Firm that has 25% share in the market
covered under the definition of Monopoly. Monopolies and
merger commission investigates when there is merger of two
companies that such merger is creating monopoly in the market
or not.

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Legislation in UK:
Competition Act 1998
This act consists of provisions of anti competitive practices.
The provisions of this act are based upon the Article 81 and 82
of treaty of ROME 1957.
The Enterprise Act 2002
This act provides that the enterprises make changes in the
competition law of UK. This act provides the various laws that
strengthen the competition laws.

3.2 Role of Competition commission and the merger of UK office of fair trading
in competition and market authority
Role of competition commission
Competition commission is the regulating body in UK that regulate the
competition. It is its duty to investigate that the laws are followed in the country
or nor. Competition commission has more power as comparison to Enterprise act
2002. If any person faces any problem then they can move to the regulatory and
if the issue still exists then they can pass the case to commission. It has power to
impose penalty if they find any issue. It has power to make investigation in case
of merger of two companies and they can make decisions in this regard. It
checks that the merger does not have negative impact over the market.

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UK Office of fair trading merged with competition and
market authority
The UK office of fair trading now merged with competition
and market authority. It is merged to regulate the
monopoly and anti competitive practices in UK. All the
powers and functions of director general in regard to
monopoly and anticompetitive practices are forwarded to
the competition and market authority.

3.3 Dominant position under EU common market
Dominant position is the power to control the market in
relation to the specified goods and services. It is completed
prohibited in the market and there are various laws that prohibit
such environment. It is required to abuse the dominant position
in the EU market so that businesses can last for long time. Firm
that does not abuse its position then it can not be called as in
dominant position.

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Dominant position covers:
The ability to control the market.
The power to eliminate the competitors from the market.
Ability to stand alone and create monopoly.
Example:
United Brands Company and United Brands Continental BV v. Commission of
the European Communities [1978]
There are many test made in this case. According to Article 82, dominant
position is the power to stand alone and eliminate competition. Such firm creates
monopoly and eliminate the competition from the market. This firm also abuses
the customer.

3.4 EU exemption to potentially anti competitive practices
Following are the exemptions that are available to potentially anti competitive
practices:-
Individual Exemption
This exemption is available to the individuals. The individual who makes their
effort for the economic growth liable for this exemption. This exemption
available only when they do not hinder the competition.
Block Exemption
This exemption is available to the group of individual. This exemption is
available only when they work for the economic growth and development. It is
provided when all the criteria of individual exemptions are fulfilled.

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Parallel Exemption
Parallel exemption means the exemption that is based on the
individual and block exemption. This exemption is available when
individual and group of individual are making their effort to
promote the competition among the member states.