Competing fairly - United Kingdom

Updated 03/2011

Legal requirements

Competitive markets provide the best means of ensuring that the economy's resources are put to their best use by encouraging enterprise and efficiency, and widening choice.

Where markets work well, they provide strong incentives for good performance - encouraging firms to improve productivity, to reduce prices and to innovate; whilst rewarding consumers with lower prices, higher quality, and wider choice.

The Competition Act 1998 aims to promote healthy competition. Together with the Enterprise Act 2002, it is the current major source of competition policy in the UK.

Competition Act 1998

The Enterprise Act covers a range of measures designed to enhance enterprise. It strengthens the UK’s competition framework, transforms the UK approach to bankruptcy and corporate rescue, and empowers consumers.

The Act builds on the progress made by the Competition Act 1998, recent insolvency reforms and measures already implemented in the 1999 White Paper ‘Modern Markets: Confident Consumers’ (URN 99/1184).

Enterprise Act 2002

To promote fair trading and protect consumers from unfair, misleading or aggressive commercial practices, the Consumer Protection from Unfair Trading Regulations 2008 were introduced.

Consumer Protection from Unfair Trading Regulations 2008 Anti-trust

Abuse of dominant position

A business with a dominant market position is prohibited from abusing that position (e.g. unfair prices for customers or suppliers) through Chapter II of the Competition Act 1998.

Penalties include fines of up to 10% of a company’s annual turnover (including worldwide turnover), and directors may be disqualified, fined or even imprisoned. Customers and competitors may also be able to sue companies that break the law.

Abuse of dominant position – Office of Fair Trading [149 KB]

State aid

The Department for Business, Innovation and Skills (BIS) State Aid Branch has lead responsibility within UK government for co-ordination and development of State Aid policy. The Department:

provides advice and guidance on State Aid rules to national, regional and local government and government agencies;
co-ordinates and advises on complaint cases, court cases and formal investigations;
is the channel through which notifications seeking EC approval for State Aid must be routed;
provides State Aid awareness-raising and training to those in government agencies; and
provides reports on UK State Aid to the Commission and the WTO.

Department for Business, Innovation and Skills - State Aid

Consumer protection

Regulations and laws are in place to protect consumers and businesses from unscrupulous vendors and rogue traders.

Customer Protection

Office of Fair Trading

The Office of Fair Trading (OFT) has extensive powers to investigate suspected breaches of competition law and take action.

Office of Fair Trading

Competition Commission

The UK Competition Commission is an independent public body which conducts in-depth inquiries into mergers, markets and the regulation of the major regulated industries.

Competition Commission

Strict provisions govern company mergers

Mergers — United Kingdom

Administrative procedures

Merger notification

All information on mergers and acquisitions and other administrative requirements can be found on the Business Link portal.

Business Link - Mergers and Acquisitions

Resources

Guidance leaflets for business on 'Fair trading' are available from the Trading Standards Institute site. It is a one-stop-shop for consumer protection information in the UK.

Check also the legislation on this topic in:

Competing fairly - United Kingdom