Going European: Britain's New Competition Law

• Published date: 01 June 2000
• DOI: 10.1177/0003603X0004500209
• Author: Michael Utton
• Date: 01 June 2000
• Subject Matter: Foreign Antitrust

The Antitrust Bulletin/Summer 2000

Going European: Britain's

new competition law

BY MICHAEL UTTON*

I. Introduction

531

Exactly 50 years after the passage

of

the first law

of

modern times

dealing explicitly with competition or antitrust policy in Britain, a

new law, fundamentally changing the basis

of

much

of

British

policy, was passed in 1998. The Competition Act, 1998 has as its

main purpose the alignment

of

British law with that of the Euro-

pean Union. European law applies to all cases involving inter-

member trade within the Union while the new British law applies

to trade within the U.K.

The need for major reform had long been recognized and the

previous Conservative government had introduced anumber

of

discussion papers and a draft bill. IWithin ayear

of

taking office

the

incoming

Labor

government

published

a

revised

bill

that

included some important revisions to the original proposals. The

*Professor

of

Economics, University

of

Reading, U.K.

For example.

ABUSE

OF

MARKET

POWER,

1992

CMND

2100;

TACK-

LING

CARTELS

AND

THE

ABUSE

OF

MARKET

POWER:

A

CONSULTATION

Docu-

MENT

(March

1996).

Draft

bill

with

the

same

title

was

published

in

August 1996.

©2000 by Federal Legal Publications. Inc.

532

The antitrust bulletin

new Act passed into law in November 1998 and the major provi-

sions become effective in March 2000. 2

The main purpose of this article is to discuss these important

changes to British law. In section II I discuss the new provisions

for dealing with restrictive agreements (collusion) and in section

III those dealing with abuse

of

market dominance. Those sections

of the previous legislation that are retained are considered in sec-

tion IV. Conclusions are given in section V.

II.

Restrictive

agreements:

Competition

Act,

chapter

1

The major changes are set out in chapters 1 and 2 of the Act

dealing respectively. with restrictive agreements and abuse

of

a

dominant position. Both closely follow the substance and termi-

nology

of

articles 85 and 86 of the Treaty of Rome. Thus in chap-

ter 1. agreements or concerted practices between undertakings that

may affect trade within the United Kingdom and have as their

object or effect the prevention, restriction or distortion

of

compe-

tition are prohibited, unless they are exempt (paragraph 2). A list

of

the types

of

agreements to which the Act

particularly

applies is

then given, although it is

clear

that other forms

of

agreement

might also be prohibited. Agreements are prohibited which

"(a) directly or indirectly fix purchase or selling prices or any other

trading conditions;

(b) limit or control production. markets. technical development or

investment;

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with other

trading parties. thereby placing them at a competitive disadvan-

tage;

(e) make the conclusion

of

contracts subject to acceptance by the

other parties of supplementary obligations which by their nature

or according to commercial usage. have no connection with the

subject

of

such contracts."

All prohibited agreements are automatically void.

Competition Act. 1998. ch. 41.