Is Your Business Up to Date With the Latest UK Competition Laws? By Ian Robinson At Isnare.com Ezine Articles

On 24th April some leading supermarkets were raided by the Office of Fair Trading after a tip-off by Wal-Mart/Asda about practices which may breach UK competition law. Emails were seized in what the supermarkets claim is a "fishing expedition", crossing many products and sectors.

The raids follow a separate investigation into pricing arrangements for cigarettes sold in supermarkets and came the same week that the Competition Commission issued its report into the sector. However, the OFT in the same week also had to pay Morrisons £100,000 in a settlement of the company's libel action against the OFT arising from an OFT press release suggesting Morrisons was guilty of competition law breaches (before that is proven) in the on-going investigation into milk pricing.

The OFT appears to be getting tougher. It issued a statement of objections - the equivalent of a writ/claim - against 112 construction companies recently for alleged cover pricing and compensation payments. Many of these companies have already admitted guilt and applied for leniency. Although some parts like the ban on price fixing and cartels are very easy to understand, not all businesses understand what information they can exchange with a supplier or rival about forthcoming price increases, pricing, discounting on retail prices and the like.

The supermarkets have complex arrangements and relationships with their suppliers and it is wise to take legal advice on competition law in relation to many of these practices. Bigger companies often have written competition law compliance programmes and training for staff and issue regular warnings to ensure all employees know what the rules allow. Breach of the rules can lead to fines of 10% of worldwide group turnover, restrictions in agreements are rendered void and third parties can sue for damages. In addition, negative publicity will result. Where there is horizontal price fixing or bid rigging, jail sentences are possible as is extradition to the US if there is a US element, where prison sentences of 10 years for breach of anti-trust legislation are common.

Investigations by the EU are also possible for breach of EU competition law. Recently, formal charges were sent to a group of multi-national companies allegedly involved in a conspiracy to fix prices of marine equipment supplied to the oil industry. This follows raids on the companies 12 months previously in a case which has led to investigations in the US and UK and the first charges for individuals involved for the criminal cartel offence under the UK 2002 Enterprise Act.

So no matter what industry you are in, as a business owner, you must be aware of the guidelines and laws you are trading under. As new rulings are made, it is important to seek advice to keep yourself up to date and maintain the operational safety of your business. If the “big fish” in the market place are being monitored and enduring the Office of Fair Trading prosecutions chances are you will be too.

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