UK: Competition Act 1998

Last Updated: 9 December 1998
The Competition Act 1998 received Royal Assent on 9 November 1998. It makes the most significant changes to competition law in the UK for many years.

Norton Rose is currently preparing a detailed briefing on the new Act. In the meantime, we bring you a summary of its key provisions, and key dates to bear in mind in order to ensure compliance.


  • A new Chapter I prohibition on agreements and arrangements between businesses which restrict competition in the UK (subject to the possibility of exemption)
  • A new Chapter II prohibition on abuse of a dominant position by businesses in the UK (even where the dominant position is in only part of the UK)
  • The new prohibitions are modelled on EC competition law (Articles 85 and 86 of EC Treaty respectively) and are to be interpreted in line with EC jurisprudence. However, they can apply to purely domestic UK arrangements (i.e. even if there is no effect on trade with other EU Member States).
  • The Director General of Fair Trading (DGFT) has strong new powers to investigate suspected infringements, including the right to make dawn raids on business premises and require the production and explanation of relevant documents.
  • Infringement of either prohibition renders contractual provisions void and unenforceable, and gives rise to third-party civil liability in the courts. It also can attract penalties (fines) of up to 10 per cent of turnover.
  • There are procedures for notifying agreements and conduct to the Office of Fair Trading (OFT). Notification is not compulsory, but can provide legal certainty, offers the prospect of exemption, and protects against fines.
  • When the new prohibitions come into force, they will replace the Restrictive Trade Practices Act 1976 (RTPA), the Resale Prices Act 1976 (RPA) and the anti-competitive practices provisions of the Competition Act 1980. The monopoly provisions of the Fair Trading Act 1973 will remain in place.
  • Merger control is not affected by the new law - except that, from 1 April 1999, the Monopolies and Mergers Commission (MMC) is renamed the Competition Commission. The Competition Commission will be the body for first level appeal of the DGFT's decisions under the Competition Act 1998.
  • The new prohibitions will apply to regulated utilities - the UK regulators will have powers in their respective sectors which are concurrent with those of the DGFT.


Enactment date: 9 November 1998

- The Competition Bill received Royal Assent and became the Competition Act 1998.

Interim period: 9 November 1998 - 29 February 2000

- Agreements made during the interim period need not be notified to the OFT under the RTPA, unless they (i) involve price-fixing; or (ii) are variations of agreements made before 9 November 1998.

- It will be possible to notify agreements or conduct to the OFT for "early guidance" as to whether they fall under the new prohibitions and/or merit exemption. The DGFT is expected to announce shortly details of the procedure for obtaining early guidance.

- Businesses should prepare for the new prohibitions coming into force by ensuring that their commercial agreements (new and pre-existing) and conduct comply. Norton Rose can assist you with the review process and advise you how best to prepare for the new legislation (e.g by means of due diligence or a compliance programme).

Starting date: 1 March 2000

- The Chapter I prohibition (the prohibition on anti-competitive agreements) comes into force.

  • The Chapter I prohibition applies to all agreements made on or after the starting date.
  • Agreements made before the starting date are subject to the Chapter I prohibition, but benefit from a transitional period generally of one year (unless they are void under the RTPA or unlawful under the RPA).
  • Agreements which have already been notified under the RTPA and have received "section 21(2) clearance" are permanently protected from the Chapter I prohibition.

- The Chapter II prohibition (prohibition on abuse of a dominant position) comes into force.

End of one-year transitional period: 1 March 2001

-The Chapter I prohibition starts to apply to agreements made before 1 March 2000 (other than agreements which have permanent validity by virtue of section 21(2) clearance under the RTPA).


Land agreements

- Both prohibitions will apply to land agreements. Many of these have never previously been caught by competition law.

- There is an exclusion from the Chapter I prohibition for agreements made pursuant to planning obligations imposed by a planning authority.

- The Government intends to adopt a statutory instrument under which many land agreements will be excluded (or otherwise protected) from the Chapter I prohibition, subject to the possibility of the OFT "clawing back" the exclusion for specific agreements.

Vertical agreements

The Chapter I prohibition will apply to vertical agreements (e.g. agreements between manufacturers and distributors).

- The Government intends to adopt a statutory instrument under which vertical agreements (other than price-fixing agreements) will be excluded (or otherwise protected) from the Chapter I prohibition, subject to the possibility of "clawback".

This note is intended to provide general information about some recent and anticipated developments which may be of interest. It is not intended to be comprehensive nor to provide any specific legal advice and should not be acted or relied upon as doing so. Professional advice appropriate to the specific situation should always be obtained.

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