The Competition Act 1998 prohibits any agreement, business practice or conduct which has, or could have, a damaging effect on competition in the United Kingdom.
This includes abuse by a company which uses its dominant position in a way that harms competition. Where conduct has an effect on trade between member states we will apply Articles 101 and 102 of the Treaty on the Functioning of the European Union.
We have extensive powers to investigate companies believed to be involved in anti-competitive activities.
The Act is also enforced by the CMA. In relation to the railway industry, we hold concurrent powers and will generally lead in the investigation of rail related matters. The exception to this is criminal 'cartels' which are investigated by the CMA and the Serious Fraud Office.
Examples of competition law infringements
The Competition and Markets Authority (CMA) has produced a range of materials to help companies understand competition law. This includes animated films like this one on what you can do to comply with competition law.
Prohibitions under the Competition Act 1998
The Competition Act 1998 prohibits:
- agreements between undertakings (busineses) or decisions of associations of undertakings (e.g. trade associations), and concerted practices which have, as their object or effect, the prevention, restriction or distortion of competition within the United Kingdom (or any part of it) and which may affect trade in the United Kingdom. This is known as the Chapter I Prohibition; and
- conduct by one or more undertakings amounting to the abuse of a dominant position in a market which may affect trade within the United Kingdom. This is known as the Chapter II Prohibition.
Some examples that may indicate anti-competitive behaviour include:
- a major supplier has suddenly decided, for no apparent reason, to discontinue supplying you with a product;
- quotes from various suppliers are surprisingly and unusually similar;
- a major supplier will only sell you a product if you buy an unconnected product; or
- on entering a market, you find that a major competitor has responded by dropping its prices to extremely low levels, which you suspect would not cover its costs.
The fact that a company is engaged in any of the behaviour shown in the examples above does not mean that it has necessarily broken the law. This will depend on the circumstances of the case.
Under the Competition Act 1998, the Chapter I prohibition is breached only where the agreement or arrangement in question has an appreciable effect on competition. The Chapter II prohibition is breached only where the undertaking engaged in the conduct in question is in a dominant position within the market in question and has abused that position. In some cases the behaviour in question may be a perfectly legitimate response to rigorous competition in the market.
We have temporarily changed our approach to competition enforcement in light of the COVID-19 crisis. A note of how we have changed our policy can be found on our COVID-19 page.
We have published guidance on our approach to the enforcement of the Competition Act 1998 in relation to the supply of services relating to railways. We exercise our functions under the Act concurrently with the Competition and Markets Authority (CMA), which has also published guidance on competition law.
Competition Act 1998 investigations
Details of the investigations carried out under the Act.
Freightliner commitments - continued monitoring until March 2019
EWS Limited infringement of the Chapter 2 prohibition
17 November 2006
These are decisions where, following an investigation under our Competition Act powers, we have decided that the conduct complained about does not infringe the Competition Act 1998.
- DB Schenker Rail (UK) Ltd
18 August 2010
- Investigation into Real Time Train Information
1 December 2009
- NTM Sales and Marketing Ltd against Portec Rail Products (UK) Ltd
- Safety Critical Personnel on the London Underground Network
23 June 2004
- Federation of Welders against Network Rail
3 June 2004
- English Welsh and Scottish Railway
3 December 2003
- Virgin fares
30 November 2001