Competition Law is used to ensure a competitive market free from restraints on trade, to encourage innovation, improve quality and to thereby protect and benefit both businesses and consumers. The EC Treaty is the European Union’s anti-competitive legislation which sets out the types of anti-competitive behaviour that are illegal within EU states. The Competition Act 1998 (CA98) is the UK legislation with the same effect on domestic markets.
Anti-competitive agreements between businesses (i.e. cartels) are prohibited by Chapter I of the Competition Act 1998 (CA98) and Article 101 of the EC Treaty
Abuse of a dominant position in a market is prohibited by Chapter II of CA98 and Article 102 of the EC Treaty.
Within the UK, the Office of Fair Trading (OFT) is responsible for policing the enforcement of the CA98 and the EU Treaty. If the OFT finds an entity to be engaged in anti-competitive activity the OFT can charge a penalty fine and decide whether to launch a criminal prosecution against the individuals or corporate bodies responsible. When imposing a penalty the OFT will take into account many factors, including:
The seriousness of the infringement and relevant turnover of the undertaking (within the geographical area and product market concerned)
The duration of the infringement
Any aggravating or mitigating factors
The OFT will reward a whistleblowing entity or individual with leniency. On this topic I refer you to ‘The Informant’ starring Matt Damon (you can always rely on a Hollywood actor to add some glamour to the law!)
The Competition Appeal Tribunal (CAT) hears actions for monetary claims arising from OFT and European Commission decisions. Also known as ‘follow on’ claims, the claimant only needs to prove it has suffered a loss. The CAT does not determine whether there has been a breach of competition law – these ‘stand-alone’ cases must be heard by the High Court.
The CAT is designed to be speedy and efficient, with cases only taking 6-12 months, unlike in the High Court where cases can often run for 2-3 years.
Claims in competition law can be extremely expensive to run as they will often depend on expert reports to prove that the claimant was negatively affected by the Chapter I or Chapter II prohibition and that they did not pass on the losses alleged by the competition infringements to their own customers. TheJudge is often engaged to source Litigation Funding and ATE Insurance to help clients to limit their risk and, in the case of funding, to provide cash flow.
The CAT has traditionally only ever awarded compensatory damage i.e. damages which put the successful claimant back into the financial position they would have been in had they not been affected by a competition infringement. However in the recent landmark decision of 2 Travel Group PLC (in liquidation) v Cardiff City Transport Services Limited, the CAT awarded exemplary damages of £60,000 to the successful claimants 2 Travel Group.