Uk Competition Law Notes

UK COMPETITION LAW STEP 1: Which competition authority will investigate? STATE: As we are dealing with an agreement for which its impact is felt solely within the UK, the relevant body is the Competition and Markets Authority (CMA). STEP 2: What is the legal basis for its investigation and prosecution? STATE: The legal basis of the investigation and prosecution will be based on Competition Act 1998 and the s2(1) Chp.1 prohibition. STEP 3: Is there a breach of s2? STATE: s2(1) provides the general prohibition, prohibiting: agreements between undertakings, decisions by associations of undertakings and concerted practices which (a) may affect trade within the United Kingdom and which has as its object or effect the prevention, restriction or distortion of competition within the United Kingdom' STEP 4: Is there an agreement between undertakings? STATE: The licence is between two separate economic entities in the market and constitutes an agreement expressing the parties' joint intention to conduct themselves on the market in a specified way. STEP 5: Does the agreement affect trade within the UK? STATE: The effect on trade need only be 'actual or potential'. It is clearly present here because the proposed agreement will regulate trade between the parties in the UK. STEP 6: Does the agreement have as its object or effect the prevention, restriction or distortion of competition within the UK? STATE: As it stands, this agreement is anti-competitive. The following clauses/proposals are specifically anti-competitive...(address each anti-competitive clause in turn). Hardcore/object infringementRe-sale price maintenance - such price fixing restricts the licensee's behaviour and distorts trade. Given free rein, [.........] might well price below this level in order to respond to competitive pressures. [..........] is clearly trying to preserve its cachet and maximise earnings. Therefore, the object of this clause is clearly anti-competitiveExport Ban - restricts the commercial freedom of the licensee. Such clauses are automatically deemed to be anti-competitive as they reduce consumer choice and partition the market. Effect infringementExclusive licence - accompanied by territorial restrictions, this may have the effect of being anti-competitive. By promising not to licence to anyone else in the territory, this affects trade within the UK.Exclusive grant backs by the licensee on improvements - the obligation on [........] to assign improvement IP rights to [........] is anti-competitive in that it imposes an obligation on[.......] to assign something that, in law, is theirs to sell or licence freely. Clearly the effect of this is to distort competition. 

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