The new UK Competition Act received Royal Assent on 9th November 1998. The main provisions of the Act (the introduction of an Article 85 and Article 86 type regime in the UK) will not, however, come into force until 1st March 2000.
The Restrictive Trade Practices Act (the "RTPA") and the Resale Prices Act 1976 will not be repealed until the Act comes into force (namely 1st March 2000). However, the transitional provisions in the Act provide that during this interim period (namely between 9th November 1998 and 1st March 2000) the RTPA will operate in a modified form as regards agreements entered into during that interim period (but not in respect of agreements made prior to that period, where the time for registration extends into that interim period). All agreements except price-fixing agreements will be non-notifiable, with the result that they do not need to be registered with the Office of Fair Trading ("the OFT").
This means that if you are sure your agreement does not contain price-fixing restrictions, no RTPA "suspense" clause need be used. However, if one is used (and there is no harm in using one if you are unsure whether price-fixing provisions are included) it becomes even more important that a revised RTPA suspense clause (which deals with the concept of non-notifiable agreements) is used.
It is worth noting that agreements caught by the Act will remain "subject to registration" which effectively enables the OFT to call for agreements to be registered and to be scrutinised. The OFT has made it clear that there is not intended to be a one year moratorium on the pursuit of anti-competitive agreements. The Director General of Fair Trading intends to keep an active watch for anti-competitive agreements
during the interim period "and will not hesitate to call in agreements for competition scrutiny under his powers".
In essence, this means that agreements which do not contain any significantly anti-competitive provisions, but which previously may have been technically caught by the RTPA, need no longer be reviewed to see if registration under the RTPA is necessary. However, competition law advice should still be sought when the provisions being discussed are either price-fixing provisions (because these will still need to be registered under the RTPA), or are of the type that could be caught by the new legislation when it comes fully into force (because whilst these may escape scrutiny during the interim period, they may be rendered void and unenforceable under the new legislation after it comes fully into force).
Once the provisions of the Competition Act come fully into force, there will be a further transitional period of exemption of one year for most agreements entered into prior to 1st March 2000 (some agreements will benefit from a longer transitional period of exemption). After the transitional period, however, any anti-competitive provisions in an agreement which are caught by the new legislation (and which do not benefit from an automatic exemption afforded by the legislation) will be rendered void and unenforceable unless notified for an individual exemption. Agreements entered into on or after 1st March 2000 will be immediately subject to the new legislation.
This information is necessarily brief and it is essential that professional advice is sought before any decision is taken.
